(1) Burden Of Proof And Evaluation

(1) Burden Of Proof And Evaluation

Five different classical means of presenting evidence are admitted, each regulated by specific provisions of the Civil Procedural Act:

- inspection by the court;

- witnesses;

- expert witnesses;

- documents;

- interrogation of a party.

In addition, the court may ex officio ask administrative bodies for information.

The parties accordingly have to offer at least one of the above listed evidences for each of the fact which either support the claims of the plaintiff or may form an appropriate defense for the defendant.

(3) Administration Of Evidence

Usually, the court decides on whether to take evidence or not after a (preliminary) oral hearing, where the court should discuss with the parties to make sure that the facts need to be proved, which is only necessary if the facts in dispute are really decisive for the claim or defense. Thus, the court issues an order to take evidence. This order has to contain the facts to be proved, the evidence and party bearing the burden of proof.

The taking of evidence is done directly in front of the whole court, so that only exceptionally a member of a panel can be authorized to take the evidence as a commissioned judge.

A witness, being properly summoned, is obliged to appear at the hearing, to make a deposition and even to make an affidavit. The taking of evidence is done ex officio so that it is only the judge who poses the questions to the witnesses and only after that the parties are allowed to ask additional questions. However, German law does not provide for the option of a cross-examination.

In the case of documentary evidence the parties of the proceeding are obliged to produce the documents in actual possession that are necessary as evidence for the party bearing the burden of proof.

The deposition of the parties themselves is rather unusual, since it is rather risky to apply for the deposition of the other party being the procedural opponent, who has an essential interest in the outcome of the proceedings and therefore is not really inclined to tell the truth.

Under special circumstances, the court is also entitled to take evidence ex officio, i.e. without any offer of one of the parties. This, however, is limited to depositions of the parties, expert witnesses, documentary evidence and inspection by the court. The deposition of a witness is only admissible upon a respective offer of one of the parties.

g. Oral Hearing

At the main oral hearing, which can directly be continued after the taking of evidence, the court summarizes the factual and legal issues and the arguments of the parties by referring to their respective written submissions. Subsequently, it has to discuss all details of the case, which are decisive for the final judgment, even if the parties did not raise some issues in their written submission. If evidence has been taken by the court, it should also discuss the outcome of the evidence with the parties.

Within the oral hearing the judge is also under the obligation to attempt a settlement between the parties. This usually happens in a preliminary hearing. However, it is not uncommon that the court will quite frankly discuss the outcome of the case even after taking evidence and sometimes strongly recommend a settlement also at the main oral hearing.

If the parties do not agree to settle the case, the court may immediately deliver a judgment that terminates the lawsuit. But in practice it is more likely that the court sets a date, usually within about two weeks for the reading of the judgment.

The form of a judgment is in detail described by the Civil Procedural Act:

(1) All judgments begin with “Im Namen des Volkes!” (“In the Name of the People”).

(2) Then the so-called “Rubrum” lists the parties and their procedural representatives (attorneys at law) usually with their profession, domicile and procedural status as parties. Furthermore, it refers to the names of the participating judges and the date of the last oral hearing.

(3) It follows the operative part of the judgment, being the decision on the claim, the costs of the proceedings and the provisional enforceability of the judgment.

(4) The facts of the case (Tatbestand) have to contain all factual details and motions forming the basis of the court decision. Thus, the court may not base its decision on facts not being mentioned in the facts written down in the judgment.

(5) Finally, the reasons for the decision give a summary of the deliberations in respect of the legal points and evidence that lead to the judgment.

(6) Finally, the participating judges have to sign the document. Only with the signature of all judges of the panel the preliminary status of the written judgment as a draft is ended giving it full power and authority.

Besides the ordinary proceeding, German civil procedural law provides for interlocutory injunctions and provisional proceedings in special cases:

(1) Trademark infringement

Preliminary injunctions are particularly sought in cases of trademark infringement, intending to defer the defendant from continuous infringements of the plaintiff’s rights by an appropriate court order for injunctive relief. In cases of sufficient evidence the court’s order may also include the defendant’s obligation to provide information as to the source of origin of the infringing items, the volume of sales and the like. It is up to the discretion of the court to decide the extent of the preliminary ruling.

The same principle can apply in cases of unfair competition and infringement of other IP-rights, including copyrights.

(2) Procedure

Upon filing the application for a preliminary injunction it is up to the discretion of the court (in most cases of trademark infringements of the presiding judge only) whether to invite the parties for a short term oral hearing or whether to grant the injunction by way of an ex-parte-order without providing the option to the defendant to provide its evidence. It is not necessary for the plaintiff to provide full evidence of the relevant facts according to the rules of evidence outlined in the chapter for ordinary proceedings. It is sufficient if the facts are made plausible, e.g., by presenting written affidavits, which may be convincing even by those persons, who are unable to be heard as witnesses in an ordinary proceeding.

The defendant is rightly protected, since it may claim damages, if at a later stage the proceeding proves that the injunction was unjustified.

It is not necessary for the plaintiff to provide evidence of irreparable harm or the like. The preliminary injunction will be granted if the judge is convinced on a trademark infringement and if the matter is still urgent, which is usually accepted by German courts if the plaintiff has acted on an urgent basis, i.e. has approached the infringer with a cease and desist request (warning letter) and filed for the preliminary injunction, all within a period of about 4 weeks upon first knowledge of all relevant facts of the infringement

(3) Legal Remedies

The provisional character of the court’s order for a preliminary injunction is underlined by the remedies available:

- If the injunction was granted without an oral hearing, the defeated party can raise an objection, upon which the court has to invite the parties to a short term hearing.

- If the injunction was granted after a hearing, an ordinary first appeal is applicable to the appeal court.

- Additional special remedy is provided for the defendant, who can force the plaintiff to establish an ordinary proceeding. If the plaintiff does not comply with such order, the court will cancel the preliminary injunction.

In Spain, IP in general and trademark cases specifically are managed by different kind of Courts, depending on the nature of the case. Generally, Administrative Courts deal with judicial appeals against the decisions of the Spanish Patent and Trademark Office (SPTO) whereas Civil and Criminal Courts deal more specifically with litigation proceedings.

In the last few years, there have been important changes and developments at judiciary level that reflect the raising importance of IP in this country. In particular, the establishment of a new civil proceedings in year 2001 (by means of the new Law of Civil Procedure No. 1/2000 - Ley de Enjuiciamiento Civil 1/2000- hereinafter LEC), which is now led by the principle of “orality” replacing the old almost-exclusively written procedure, as well as the establishment, in 2004, of the new Mercantile Courts within the Civil Jurisdiction aimed to deal exclusively with a specific set of subjects, among them IP and Unfair Competition. The reforms have also increased the capacity of the Mercantile Courts to deal more efficiently with each case and participate more actively in the management of the same.

It is also interesting to note that the Mercantile Courts of Alicante have been appointed to deal, exclusively within the Spanish territory, with Community Trademark and Community Designs related litigations (for this purpose, they receive the name of Community Trademarks and Community Designs Court). This new situation, together with the recent amendment of provisions of material and procedural law aimed to strengthen the position of IP owners against the infringers (among others, those resulting from the transposition of Directive 2004/48), has resulted in a progressive specialization of the Courts in IP matters as well as in a reinforcement of the predictability of their decisions, in benefit of litigants.

On the timing side, the reforms at judicial and procedural level, and particularly the global reform of the civil procedure started in the year 2000, have also determined a notable speed in the resolution of civil proceedings and a remarkable reduction of writ exchanges between the parties.

1. General Civil Procedural Rules

a. Ordinary Proceedings

IP Civil lawsuit should be filed by the plaintiff before the competent Mercantile Court, in accordance with the rules of internal competence or before the Community Trademarks and Designs Court of First Instance of Alicante, in case Community Trademark or Design rights are involved.

The attorney at law (abogado) prepares and signs a writ that is served by the bailiff (procurador) to the Court together with all available documentary evidence. Further to a formal exam of legal requirements, the Court notifies it to the defendant, allowing it a period of twenty working days for a reply. If the defendant counterclaims (in general for nullity or revocation for non-use in trademark cases), the Court sets a new time limit for the plaintiff’s reply.

It should be noted that both plaintiff and defendant should file all the available documentary evidence together with their initial briefs and there are only a few exceptions to this rule.

Once the exchange of writs and evidence is closed, the Court sets a date for the pre-trial hearing, during which the attorneys discuss and debate, mainly, procedural issues.

Once the pre-trial hearing takes place, the Court sets a date for the main hearing, where experts, witnesses and party’s legal representatives are heard and cross-examined by the attorneys, evidence is evaluated and oral arguments are provided to the Court.

It is important to underscore that Mercantile Courts, despite the fact that all civil proceeding is inspired and subject to the Dispositive Principle, (“the parties have the power of disposition of their rights, procedural as well as substantive”), have now more discretion in the management of the case resulting in the possibility of more efficiencies. In particular, Courts can admit and/or deny the discovery of evidence, propose new one when they feel it is important in order to ascertain relevant facts and they can, in general, impulse the speed of the whole procedure by reducing the timeframe between each phase (but in this last case this mainly depends on the workload at each Court).

The judge renders a decision after the main hearing.

Requests of preliminary and/or precautionary measures against alleged IP rights infringers follow specific proceedings ruled by the Law of Civil Procedure and Patent Law (to which Trademark Law remits).

These can be filed before, together or after the filing of the main lawsuit, depending on the circumstances of the case.

The petition should be made by means of a written brief supported by documentary evidence. The Court cites the defendant to appear at Court where an oral hearing is generally held within one month from the request. The decision is given after the hearing and, if the measure granted, an economic guarantee aimed to compensate possible damages to the other party should be provided. Also, the main lawsuit should be filed within one month from the decision in order to maintain the measures taken during the course of the ordinary proceedings.

In this respect, the Courts have an increased discretionary power, which results in the possibility to speed up the resolution of the case when needed and whether applicable.

Appeals against first instance decisions are heard by the Court of Appeal of the same city where the TM infringement proceedings have been decided (Audiencias Provinciales). The Court of Appeal decides on the merits of the case on the basis of the same evidence filed before the First Instance Court but it might eventually request added evidence.

The appeal must be announced in a five-day term from the notification of the judgment in first instance and afterwards substantiated within a new twenty-day term when the Court requests it.

(2) Supreme Court:

The Spanish Supreme Court is a cassation Court and only decides issues of law. The recourse to the Supreme Court is not automatic against Appeal Court’s decisions and the requisites to accede it are numerus clauses (Art. 477 LEC).

Appeals to the Supreme Court must be exercised within five days from the notification of the Second Instance’s ruling and afterwards substantiated within a term of twenty days when the Court requests it.

(3) Timing

The necessary time to obtain a first instance decision varies from Court to Court around the Spanish territory, depending on the backlog at each Court and the number of Court rooms dedicated to IP sections in each city. In general, it can be said that this has been reduced in the last years further to the reforms of the Civil Proceedings and the creation of the Mercantile Courts.

Lawsuits in trademark cases average 12 to 16 months in first instance and 8 to 12 months in second instance. Preliminary injunctions can be granted within one month or few days in case an inaudita parte proceedings is followed.

(4) Cost awards

Legal expenses are borne by the losing party, unless the judge, by a reasoned decision, imposes half of them to each party (e.g., In case a specific question of law is not pacific at jurisprudential level).

The Court might also order the party bearing legal costs or the losing party to pay to the other party the sums disbursed in order to obtain the necessary evidence (expert reports, investigations, etc.) but not included in the legal costs.

The costs’ award are calculated on the basis of general Bar’s Fees, which vary according to the amount of claims finally granted but this seldom reflects the real costs afforded by the party, unless the claim amount, are high enough.

In general, in Spain, crimes against Intellectual Property are prosecuted in a "Simplified proceeding" (Procedimiento abreviado). This proceeding starts with a denunciation or a criminal complaint filed by a party, or ex oficio as a consequence of a police report sent to the Court by the Police.

The Simplified Proceeding is divided into three different phases:

(1) Prior Proceedings or Investigation Stage (Instrucción):

During this phase, the Criminal Court carries out all the investigations aimed to obtain the evidence needed to determine the nature and circumstances of the crime, the people involved in its perpetration, etc. (e.g. the Judge shall order the cross-examination of the infringer, as well as experts reports on samples of the seized products, etc.). The aim is to get all the necessary information to file the accusation.

Once the investigation is performed and evidence obtained, if the Judge considers that the facts constitute a criminal offence, he/she will order the continuation of the proceedings. To the contrary, if he/she considers that the investigated facts do not constitute a crime or if it is not possible to ascertain the author of that criminal offence, he/she will order the stay of proceedings, closing the file.

(2) Intermediate Phase:

The aim is to determine whether the proceeding must go on to the next stage (the Trial) or not. To this end, the Judge of the Criminal Court delivers a copy of the complete file to both the Public Prosecutor and the private accusations, for them to request: either the opening of the Trial, filing their accusations writ (indicating who they consider is responsible for the crime, which are relevant facts, what is the crime according to the Spanish Criminal Code, etc., and proposing those evidence they want to be practiced in the Trial hearing), or the stay and closing of the proceedings, or (exceptionally) the practice of additional investigative evidence, which may be necessary to file the accusation.

If the Judge decides to open the Trial stage, s/he will give a term to the defendant's Attorney, for him/her to submit the defense writ.

(3) Trial:

The decisions rendered by the SPTO’s Boards of Appeals can be appealed before the High Court of Justice, which is an Administrative Court. Decisions of this Court could eventually be appealed before the Supreme Court.

The appeal proceeding is governed by the Law of Administrative Proceedings and it is mainly a written procedure, with scarce possibility for the Court to reduce the exchange of writs between the parties (the appellant on the one side and the State General Attorney – Abogado del Estado – representing the SPTO’s interests before the Court on the other side) and, therefore, to influence the development of the proceeding.

H. THE PEOPLE’S REPUBLIC OF CHINA (“PRC”)

The enforcement and protection of intellectual property rights has always been a hot issue in the PRC, given its quick ascension to the forefront of global trade. However, the reality is that the PRC is still a developing nation, albeit a rapidly improving nation, and its intellectual property enforcement system is still in its infancy. Furthermore, the PRC also faces a significantly different set of intellectual property enforcement problems that few other nations can claim to have. These problems include mushrooming underground counterfeit organizations, improved means of transportation and access to sophisticated anti-counterfeiting technologies, to name a few. As a result, everything from batteries, beverages and cigarettes to electronics, pharmaceuticals and agrochemicals has been counterfeited in the PRC.

In recognizing this dilemma, the PRC has built a large administrative infrastructure for the administration and protection of intellectual property rights. Amongst the administrative bodies, the State Administration for Industry and Commerce has generally been the government agency responsible for the supervision of business activities and general supervision of commerce, including the enforcement of trademarks. Consequently, aggrieved parties have a variety of options to tackle trademark infringement. Furthermore, the most effective of these options is to rely on more than one approach (which are described below), rather than relying solely on judicial adjudication. In fact, in cases of trademark infringement, aggrieved parties often first lodge administrative complaints with local administrative authorities, then follow-up by involving the court or criminal enforcement authorities (the PSB and the prosecutors).

1. Overview of the Court System and its Hierarchy

The PRC court system is divided into General Courts and Special Courts. The General Courts are structured in a four-tiered pyramid-fashion in terms of judicial review power, which are arranged in the following ascending order: District/Trial courts, Intermediate Courts, Higher People’s Courts and the Supreme People’s Courts. The Special Courts include the military courts, railway courts and maritime courts, all of which are particularly specialized. The District Courts are generally located in municipal districts and autonomous counties, and are empowered to hear all trial cases, except those which the law requires other courts to hear. Intermediate Courts are typically established in capitals or prefectures at the provincial level and the Higher Courts are generally located in autonomous regions and municipalities directly under the Central Government. The highest judicial organ, the Supreme People’s Court supervises the work carried out by lower courts and often issues interpretations on questions concerning specific applications of laws.

The PRC employs a Civil Law system, therefore the doctrine of stare decisis which is universally applied in common law jurisdictions does not apply. Consequently, courts are not ‘bound’ by earlier judgments and decisions from higher courts are followed only to the extent that the circumstances in the disputed cases are similar. Nevertheless, judicial interpretations and guidance opinions issued by the Supreme Court still serve as gap fillers for lower courts where the law is unclear.

In the administration of cases, the PRC adopts a finality system whereby a case is finally decided after two trials. The effect of this is that a party may only bring an appeal once to a higher court, which is usually the court directly above the deciding court in terms of judicial authority. The judgment of the appellate court shall be final and cannot be appealed further under the PRC’s civil procedure rules. However, parties may challenge the final decision through the trial supervision procedure whereby the dissatisfied litigant appeals to the appellate court or the higher court. Despite this procedure, re-trial via the supervision procedure does not suspend the effect of the previous court’s judgment.

In recent times, China has created specialized tribunals that are devoted solely to handling and processing intellectual property cases, which are spread amongst the Higher Courts and the Intermediate courts. Within each court, there are usually several divisions, such as civil, economic, administrative and enforcement divisions. Specialized intellectual property divisions were created to provide better quality and speedier judgments in intellectual property disputes.