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Until recent times, parties in litigation were often reluctant to use traditional mediation, expressing distrust in its mechanisms due to a lack of substantial positive impact on case outcomes. As a result, many litigants viewed the mediation process as merely procedural.

However, since the China National Intellectual Property Administration (CNIPA) introduced pilot programmes for intellectual property (IP) dispute arbitration and mediation across the country, this non-litigation method ¨C backed by administrative authority ¨C has gradually revealed its unique advantages in resolving IP disputes.

This shift in perception was underlined recently by Fu Mingxing, a second-level inspector from the CNIPA¡¯s IP Protection Department, during a recent visit to Shanghai to conduct research on IP mediation organisations.

As China¡¯s economy shifts toward an innovation-driven model, with IP disputes on the rise, he noted that the CNIPA-led IP dispute mediation mechanism has become a new focal point that complements administrative enforcement and judicial protection. It plays a crucial role in resolving disputes and establishing a comprehensive framework for IP protection.

Achieving quick results

The most notable advantage of mediation over litigation in IP disputes lies in its ability to save time. In recent years, a backlog of cases has significantly extended the trial periods in courts across China, with IP disputes often taking even longer to resolve.

Unlike tangible property rights, IP rights involve intangible assets, and their determination frequently requires expert consultation or technical appraisal to clarify key technical or specialised issues. This lengthy process is unfavourable for parties seeking to promptly halt infringement and achieve swift enforcement of their rights.

Mediation is particularly advantageous in batch enforcement cases on online platforms, especially for smaller disputes with clear facts. It reduces litigation costs, shortens case timelines, and eliminates the need for evidence collection and cross-examination.

Additionally, mediation facilitates the development of more consistent settlement agreements while safeguarding confidential information and trade secrets that might otherwise be disclosed during litigation.

Leverage to support litigation

Mediation and litigation are not opposing methods, but complementary tools that can work in tandem. While not all disputes are suitable for direct mediation, litigation cannot always be deemed the optimal solution for rights protection.

Compared to general civil disputes, IP disputes are often more specialised, prone to novel issues, and involve more complex legal relationships. This complexity can make it difficult to predict judicial outcomes. However, the back-and-forth communication in mediation can help parties better understand the strengths and weaknesses of their positions.

During mediation, disagreements and disputes are more easily identified and communicated, reducing the risk of excessive competition and adversarial emotions. Unlike formal courtroom arguments, direct communication in mediation allows parties to express themselves more openly, facilitating effective dispute resolution.

A skilled lawyer can utilise the mediation process to pinpoint the core issues and substantive demands of both parties, identify the crux of the dispute, and analyse similarities and differences.

By assessing the stability of rights, evidentiary strength and litigation risks, lawyers can refine evidence and strategies as needed. This approach not only enables a clearer evaluation of potential case outcomes but also enhances the chances of achieving favourable results in subsequent litigation.

Promoting win-win development

In practice, an increasing number of IP disputes are not directly about infringement, but stem from disagreements over interests among the parties involved. These disputes are often rooted in interest conflicts rather than value conflicts, with complex historical origins and extensive collaboration facts underlying the cases.

For example, the high-profile dispute between the celebrity YouTube video creator, Li Ziqi, and her brand operator, Hangzhou Weinian Brand Management, was likely too complex to be resolved through litigation alone. Yet her account subsequently resumed activities, reaching a continued co-operation agreement with Weinian after settlement under mediation of Mianyang Intermediate People’s Court in southwest China¡¯s Sichuan province.

This demonstrates that transforming conflicts of interest into co-operative relationships is another significant advantage of mediation.

Another example was a jewellery brand¡¯s batch enforcement litigation handled by the author. The client, operating retail stores nationwide, faced counterfeit operations in various locations, so initiated lawsuits against multiple infringers in courts across the country.

However, relying solely on infringement litigation proved ineffective, as the infringing retail stores were small, fly-by-night operations that easily re-established elsewhere.

Yet through mediation, the client successfully conveyed their true intentions and needs to the infringers, leading to brand authorisation agreements. The infringers became authorised dealers, aligning their commercial interests with the client¡¯s.

Takeaway

Since the launch of IP dispute mediation pilot programmes in 2014, mediation has increasingly gained prominence as an efficient resolution method in the past decade. Mediation not only provides a new pathway for parties in conflict but also ensures that intellectual achievements are respected, promptly protected, and further promoted, applied and disseminated in the commercial environment.

Effectively leveraging mediation to identify a balance of interests and maximise benefits for parties involved is a topic worthy of further exploration in future IP rights protection practices.

Zhang Yubo and Li Shan are associates at Blossom & Credit Law Firm