Investigation Orders in IP Cases

December 4, 2008

We’ve come a very long way with civil procedure here in China:

Recently, Wuhan Intermediate People’s Court plans to try new measures in its IP tribunal, according to which, the court can issue investigation orders to lawyers to authorize them the right to investigate to some extent.

Investigation order is a kind of document issued by the court to a lawyer at application when the people involved in a civil case cannot obtain related evidences. The lawyer can use the investigation order to collect evidences from related units and individuals. With the investigation order, a lawyer is authorized to investigate related evidences such as the forms of decision for administrative penalty, investigation records, records of inquest, samples charged of infringing rights and other evidences that the people involved cannot collect independently because of objective reasons in units like banks, administrations for industry and commerce and securities companies.

Investigation order should be applied and used under rigid conditions. To apply an investigation order, a lawyer should write down the application reasons. In order to avoid lawyer abusing the system, every investigation order should include the investigation contents, the name of the lawyer using the order, the name of the law firm the lawyer belongs to, and the expiration date. As the investigation order represents the court and judicial authority, no individual or unit can decline with malfeasance excuses. The courts have the right to punish the heads of those units that maliciously refuse to provide evidences.

The measure is being carried out in some cities such as Shanghai and Shenzhen. Wuhan has completed its pre-stage researches and is communicating with related administrative law-enforcement departments to issue implementation rules at proper time. 

I know what you’re thinking. Do these investigations/judicial orders really amount to much? Many times, the answer is no, I will admit. The best way to do this sort of thing is to know exactly what you want from the infringer, ensure that the docs/materials are available, and only then ask the judge to go and get it.

However, these kinds of things are steps in the right direction. In addition to getting docs from infringers, a big roadblock has always been obtaining information from the government or private third parties. To the extent that such information (banks would be #1 on my list) is discoverable in certain cases, this is all for the good.

We need to celebrate incremental progress. Wholesale legal reform doesn’t happen all that often, at least not anymore.

More good news:

Chinese courts will impose greater penalties on intellectual property rights (IPR) violations, to allow the judiciary to play a leading role in the country’s overall IPR protection strategy, a senior court official said on Friday.

Courts will use improved ways for parties who have had their IPR violated to receive compensation through civil trials, said Xi Xiaoming, vice-president of the Supreme People’s Court.

"We should make sure that we can enable IPR holders to get enough compensation, which should deprive the infringer of any benefit and make the consequences for their actions dire," Xi told a national work conference on intellectual property-related trials.

Compensations should also include the costs that IPR holders have incurred to maintain their rights, the amount of which could be calculated separately from the compensation given by court rulings, he said.

Again, I know what you’re thinking. Ramping up a verdict from ten bucks to 30 bucks isn’t that significant. (Those numbers are exaggerated downward for blog effect.)

Awards have been getting larger in recent years, even if one discounts the crazy ones like the Schneider patent case. This is crucial — if you believe as I do that only tough enforcement will stop IP infringement, then penalties need to be tough enough to discourage such activities. If awards are too small, then the cost will be absorbed by infringers as a business expense, which is the case now. However, if awards are high and infringers are put out of business as a result, then we may discourage some would-be infringers.