The Effect and Application of China’s Guiding Cases

By Han-Mei Tso

In 2017, Osha Liang Newsletter published three articles discussing patent-related guiding cases issued by the Supreme People’s Court of China (hereinafter “SPC”), i.e., Guiding Case No. 83[1], Guiding Case No. 84[2], and Guiding Case No. 85[3].  This article will further discuss the nature and effect of guiding cases within China’s legal system and explain how to implement IP-related guiding cases into Chinese legal practice.

In addition to providing judicial interpretations to specific legal issues, the SPC also identifies and publishes guiding cases that have a directing role to judgments and enforcement by Chinese courts.  For example, these guiding cases are chosen from cases adjudicated by the SPC or local courts at all levels.  To be designated as a guiding case, the SPC normally selects cases that it believes have special significance, e.g., where future cases may have similar issues as the guiding case.  Specifically, according to Article 2 of the Provisions of the Supreme People’s Court Concerning Work on Case Guidance, a guiding case refers to a case of which the judgment has taken effect and meets at least one of the following criteria:

(1) Society is widely concerned about the facts of the case.

(2) The relevant law in the case is of the principle.

(3) The case is typical.

(4) The case is difficult, complicated, or of a new type of case.

(5) The case includes a guiding effect.

From December 2011 to July 2018, the SPC has issued 18 batches of the guiding cases that include 96 guiding cases total.  Among the 96 guiding cases, 20 relate to intellectual property (hereinafter “IP”), of which 10 IP guiding cases were issued in the 16th batch of guiding cases in 2017.  This increase shows that IP cases are given more importance in recent years.  Due to the rising number of complicated cases in the IP field, it is important that the SPC analyzes new situations and new issues.  Likewise, it is also paramount that the SPC timely publishes such guiding cases to be of reference in trials throughout all court levels across the country.  This timely publication is particularly important when the legislation and judicial interpretations are not available to promptly respond to the new situations and new issues for the courts reviewing the cases.

In addition to the guiding cases, the SPC offers a case guidance system for IP cases that includes: an annual top 10 IP cases, an annual 50 typical IP cases, and an annual report of IP cases issued by the SPC every year.  The annual report of the IP cases issued by the SPC is included in the book “Case Guidance of the Supreme People’s Court on Intellectual Property Cases” (hereinafter “Case Guidance”) published annually.  For example, Case Guidance summarizes the overall characteristics and trends of IP cases heard by the SPC during the year.  It also organizes and summarizes typical legal issues of the relevant cases and has full texts of final judgments appended.  Thus, Case Guidance has a similar guiding effect for courts at all levels as the IP-related guiding cases issued by the SPC every year.

While guiding cases in China and case law of common law systems (such as the U.S. legal system) provide underlying logic and legal principles to lower courts, the nature and effect of the two approaches are very different.  In the common law system, case law is part of the law, and thus courts are bound by case law.  In contrast, since China is a civil law country, decisions of the courts in China should be based on national laws, administrative regulations, or judicial interpretations.  Accordingly, guiding cases are only advisory opinions, and not binding in the same manner as case law in the common law system.

However, Article 7 of the Provisions of the Supreme People’s Court Concerning Work on Case Guidance provides that courts at all levels should refer to the Guiding Cases issued by the SPC when adjudicating similar cases.  Rule 10 of the Implementing Regulations of Work on Case Guidance provides:

Where a court hears a similar case and refers to a guiding case, the guiding case shall be cited as a reason for the judgment, but it shall not be cited as a basis for the judgment. Accordingly, in China the courts should first apply the statutory law, followed by administrative regulations, and finally judicial interpretations.

As such, guiding cases issued by the SPC can be regarded as a supplement to the statutory law and judicial interpretations.  If there are any matters not stipulated in the statutory law, administrative regulations or judicial interpretations, the courts generally would refer to the judgments of similar guiding cases to resolve the case at hand, and the lawyers in the trial would submit relevant guiding cases to the court for reference.  In brief, guiding cases provide the courts and legal practitioners with important and timely direction, especially for highly complicated IP cases involving new issues.