Changes to the Civil Procedure Law of the People’s Republic of China: What is the impact on IP litigation involving foreign parties?

Changes to the Civil Procedure Law of the People’s Republic of China: What is the impact on IP litigation involving foreign parties?

Approved by amendment on September 1, 2023, the changes to the Civil Procedure Law of the People’s Republic of China represent a significant milestone for civil litigation involving foreign parties in the country.

The newly introduced provisions, which will apply from 2024, have a substantial impact on the jurisdiction of civil legal proceedings, which include intellectual property (IP) actions, promoting a series of important changes.

One of the highlights of the new legislation is the expansion of jurisdiction in civil litigation with foreign defendants. Under the new rule, Chinese courts may have jurisdiction in cases involving a defendant who does not reside in China, in the following situations: if a contract indicates China as the place of signature; if a contract is executed in China; if the object of the lawsuit is located in China; if the property available for seizure is located on Chinese soil; if the violation of the right occurs in China; or if the legal representative’s office is located in China.

Another important change was the determination of the exclusive jurisdiction of the People’s Court of China to settle disputes over the validity of IP rights that have been examined and granted in that country. With this new provision, even if the parties involved in a dispute regarding the validity of an IP right have signed an “Exclusive Jurisdiction Agreement” excluding Chinese jurisdiction, such an agreement is not valid in China, and the parties can file suit in the Chinese court.

The new law also gives greater autonomy to the parties, allowing them to determine Chinese courts as the competent jurisdiction in other cross-border civil disputes through written agreements.

With the increase in global IP-related disputes, competition for jurisdiction over cross-border disputes is intensifying. These and other changes have considerable effects on the Chinese legal system in relation to IP disputes involving foreign parties. Companies should therefore be aware of these changes in order to take advantage of the new rights, while also avoiding risks arising from unfamiliarity with the legislation.

The changes to the Chinese Civil Procedure Law can be consulted via the link: 全国人民代表大会常务委员会关于修改《中华人民共和国民事诉讼法》的决定__中国政府网

Note1 : News written from the article by SHI Teng and QIU Jun. Impact of 2023 Civil Procedure Law on IP litigation involving foreign parties in China. Published in: Liu Shen & Associates Newsletter, Sept. 2023.

Note 2: For quick release and cost control, this English version is provided by automated translation without human review.