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Implications of a dedicated IP court in Shenzhen, China

Veteran U.S. business operatives in China know there can be unique challenges in trying to grow and thrive in that market. Previous posts here have highlighted difficulties presented by the innate cultural and legal system differences between the two countries. At the same time, there is growing evidence that change is not only possible, but also actually underway on some fronts.

One example of this seems apparent in recent news announcing that the city of Shenzhen has opened two special courts. One is dedicated to addressing financial matters. The other is to focus on cases stemming from intellectual property disputes.

The southern city is a center of manufacturing in China and is the base of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. According to the Xinhua news agency, economic stimulus that has resulted since the zone's creation a few years ago has sparked an influx in financial and intellectual property disputes.

As evidence, officials point to the fact that local courts handled nearly 15,000 IP cases in 2016. That amounts to a tenth of all IP cases in China for that year. Meanwhile, the number of financial cases handled locally more than doubled to more than 23,000 from 2016 to 2017.

The Xinhua announcement says that the move means that all IP and many financial cases will be handled at the Shenzhen Intermediate People's Court level, rather than at the lower Basic People's Court. At least one observer writing on behalf of World Trademark Review offers the opinion that the IP court "could become a handy location for brand owners tackling IP issues" in the Qianhai region.

Whether that prediction will bear out and facilitate resolution of disputes is hard to say. What is clear is that the new courts reflect apparent commitment on China's part to address concerns that foreign trademark and IP holders have about protecting their interests.

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