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Cablegate: Shanghai Leads Out On Judicial Ip Protection

VZCZCXRO5919
RR RUEHCN RUEHVC
DE RUEHGH #0546/01 3500526
ZNR UUUUU ZZH
R 150526Z DEC 08
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 7424
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEHOO/CHINA POSTS COLLECTIVE
RUEHGH/AMCONSUL SHANGHAI 8030

UNCLAS SECTION 01 OF 03 SHANGHAI 000546

SENSITIVE
SIPDIS

USTR FOR CHINA OFFICE - TSTRATFORD, AWINTER, TWINELAND, DKATZ;
IPR OFFICE - RBAE; AND OCG - TPOSNER
DOC FOR NATIONAL COORDINATOR FOR IPR ENFORCEMENT - WPAUGH
DOC FOR ITA/MAC: SZYMANSKI, YOUNG
LOC/ COPYRIGHT OFFICE - STEPP
USPTO FOR INT'L AFFAIRS - LBOLAND
DOJ FOR CCIPS - TNEWBY
FBI FOR LBRYANT, KSHIRLEY
DHS/ICE FOR IPR CENTER - DFAULCONER
DHS/CBP FOR IPR RIGHTS BRANCH - GMACRAY
TREASURY FOR OASIA - DOHNER/CUSHMAN
NSC FOR LOI, SHRIER

E.O. 12958: N/A
TAGS: ETRD KIPR ECON EINV PGOV CH
SUBJECT: SHANGHAI LEADS OUT ON JUDICIAL IP PROTECTION

SHANGHAI 00000546 001.2 OF 003


SUBJECT: Shanghai Leads Out On Judicial IP Protection

1. (SBU) Summary: Building on its reputation as high caliber
center for judicial intellectual property (IP) protection,
Shanghai has taken a number of measures since October to
highlight and strengthen its judicial capabilities. On October
29, Shanghai held a ceremony for the establishment of the
Shanghai Intellectual Property Arbitration Court with the
support of the Shanghai IP Administration and the Shanghai
Arbitration Commission (SAC). Shanghai also proclaimed November
to be the "IPR Judicial Protection Action Month," highlighting
its judicial IP work with several separate events: a press
conference to outline the initiative and summarize Shanghai
courts' accomplishments in IPR protection, public IP trials, the
announcement of judgments on several high profile IP cases, and
a meeting to highlight judicial efforts on enforcing China's
National IP Strategy. Besides focusing on judicial IP
protection, Shanghai also held its sixth annual International IP
Forum in November, focusing on IP "transactions and services."
Shanghai courts receive high marks from the U.S. business
community for their professionalism and fairness, and as a
result, continue attracting large numbers of both foreign and
domestic rights holders seeking litigation. By establishing a
special IP Arbitration Court, Shanghai hopes to gain a similar
reputation for its arbitration abilities. End summary.

Shanghai Promotes Arbitration as an Alternative
--------------------------------------------- --

2. (SBU) In October, Shanghai officially announced the
establishment of the Shanghai Intellectual Property Arbitration
Court. The Shanghai IP Administration and the Shanghai
Arbitration Commission (SAC) backed its establishment as a way
to provide an alternative to civil litigation. Vice Secretary
General of SAC Huo Zhengmei told Econoff that Shanghai is
grappling with a large load of IP cases and is looking to
emulate practices in the West promoting increased use of
arbitration centers to resolve IP cases. This is the second
specialized arbitration court under the SAC after the
establishment of the Shanghai Financial Arbitration Court in
2007.

3. (SBU) The Shanghai IP Arbitration Court has 61 arbitrators,
including IP administrative officials, lawyers, judges,
professors and legal advisers from various companies. The group
includes two foreigners (an academic and a lawyer). Decisions
from the IP Arbitration Court will be enforced by the Shanghai
No. 1 and No. 2 Intermediate Courts. During a speech at the
opening ceremony, Shanghai IP Arbitration Court Director Wang
Kangwu, who is also the SAC Vice Director, said Shanghai is
currently drafting a special IP arbitration rule that would go
into effect in the near future. Zhejiang and Jiangsu IP
Administrative officials also made remarks, welcoming the
establishment of the Court and saying they hoped the Shanghai IP
Arbitration Court would be another cooperation platform for IPR
protection.

Shanghai Highlights IP Judicial Protection
------------------------------------------

4. (SBU) As part of its efforts to showcase its judicial IP
enforcement, Shanghai proclaimed November to be the "IPR
Judicial Protection Action Month" and held several separate
events to highlight its efforts. During a press conference to
kick off the month, Shanghai High Court Deputy Director Ying
Xinlong summarized the courts' accomplishments and experiences
in IP adjudication and outlined a list of notable events in the
history of IP judicial protection in Shanghai. He also
highlighted judicial enforcement elements in China's National IP
Strategy.

A Public Glimpse Into IP Trials
-------------------------------

5. (SBU) To showcase its judicial proceedings, Shanghai opened
several IPR tribunals in district courts, intermediate courts,

SHANGHAI 00000546 002.2 OF 003


and the High Court for public viewing November 10-13. One of
the cases involved copyright infringement via the Internet.
Beside allowing members of the public to attend the hearings,
the Yangpu District Court and the No. 2 Intermediate Court
broadcast case hearings over the Internet. In addition,
roundtables to solicit opinions on IPR judicial protection were
held in the Shanghai High Court, as well as district courts in
Pudong, Huangpu and Yangpu. The Shanghai High Court also
published proceedings of 30 "typical" IPR cases. From November
25-26, several lower IPR tribunals followed suit, publishing the
judgments of a long list of IPR cases.

Wrapping it Up
--------------

6. (SBU) To wrap up its Judicial Protection Action Month,
Shanghai High Court publicly announced the judgments of three
high profile IP case and held a meeting on November 26,
introducing Shanghai judicial efforts to implement the National
IP Strategy. The three cases included a trademark infringement
case, a copyright infringement case, and an Internet domain name
dispute. In all 3 cases, the defendants were all ordered to
cease infringement and pay damages. Although statutory damages
were applied in all three cases, the amount varied depending on
the circumstances of each case.

7. (SBU) In a speech, Shanghai High Court Deputy Director Ying
noted the Shanghai High Court has published its opinions
regarding the implementation of the National IP Strategy. The
opinions listed several measures that Shanghai courts would take
to protect IPR: fairly hear civil IPR disputes; supervise and
support IPR administrative enforcement; severely punish
IPR-related crimes; encourage case settlement through mediation;
deepen judicial capacity through a specialized adjudication
system; improve investigative techniques on technical facts;
decrease costs for safeguarding rights while increase the costs
of infringement; and strengthen cooperation with administrative
departments and courts in other provinces.

8. (SBU) Regarding building judicial capacity in Shanghai
courts, Ying stressed that Shanghai is focused on creating a
"specialized adjudication system" and extending the model of
combining civil, administrative, and criminal cases into one
tribunal. The Shanghai High Court has published guidelines for
district level courts on procedures for hearing IPR-related
civil, administrative and criminal cases. Ying also announced
that the Luwan District Court will be the 4th district level
court in Shanghai that has received national Supreme People's
Court approval for an IPR tribunal. The three other Shanghai
districts previously approved for IPR tribunals are Pudong,
Huangpu, and Yangpu.

Shanghai's International IP Forum
---------------------------------

9. (SBU) Besides spotlighting judicial IP efforts, Shanghai
also sponsored its 6th International IP Forum on November 6.
This year's forum focused on "IPR transaction and service."
State IP Office Commissioner Tian Lipu, Shanghai Mayor Han
Zheng, Shanghai Vice Mayor Zhao Wen, World Intellectual Property
Organization Senior Counselor Carlos Mazal and Canadian IP
Office Director Mary Carman were among the notable participants
in the forum. Together with other speakers from China and a
host of other countries, they addressed over 200 attendees,
including experts, scholars, government officials and business
representatives. They discussed the role of government in IPR
transactions, development of laws related to licensing and
transfer, the concept of IPR public service, and IPR management
within businesses, inter alia.

Comment
-------

10. (SBU) Shanghai courts, widely recognized among both the
Chinese and foreign business community for their professionalism
and fairness, attract a large number of litigants. Shanghai is

SHANGHAI 00000546 003.2 OF 003


also on the forefront of judicial transparency in China,
regularly publishing rulings on the Internet and opening a wide
spectrum of tribunals for public scrutiny. Shanghai's
showcasing of its judicial efforts on IP protection only
bolsters its reputation. Although IP arbitration is not new in
Shanghai (the SAC has long arbitrated IP cases), the
establishment of a special IP Arbitration Center shows the city
is substantially beefing up its resources in the area and hoping
to become a respected center for IP arbitration. Chinese
companies hope this move will entice their foreign counterparts
to arbitrate locally, saving Chinese companies the heavy costs
of arbitrating overseas.
CAMP

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