“Three Trials in One” of Intellectual Property Cases and Innovation of Chinese Enterprises

Judicial protection of intellectual property rights (IPR) plays a central role in Chinas IPR protection system. On the one hand,judicial protection offers institutional advantages such as stability,long-term effectiveness,clear rules,and definitive authority,safeguarding the legitimate rights of holders both substantively and procedurally. On the other hand,it serves as the primary and ultimate means for IPR holders to enforce their rights,with the judicial system absorbing a large volume of IP-related disputes. According to the White Paper on Chinas Intellectual Property Protection published by the China National Intellectual Property Administration,the total number of first-instance intellectual property cases—including civil,criminal,and administrative cases—accepted annually by courts across the country remained at around 100000 between 2011 and 2014,before increasing rapidly after 2015 and reaching 570000 by 2021. The latest China Patent Survey Report released by the CNIPA indicates that in 2023,over 80% of Chinese enterprise patentees actively resorted to judicial channels (including “sending cease-and-desist letters through attorneys” and “filing lawsuits in court”) to protect their rights after encountering patent infringements. Moreover,the proportion of enterprise-involved patent infringement cases that resulted in court-awarded damages,court-mediated settlements,or out-of-court settlements exceeding RMB 5 million increased to 8.4%,a significant rise compared to the 3.1% recorded during the 13th Five-Year Plan period. Against the backdrop of a new round of technological revolution and rapid industrial transformation driven by innovation,intellectual property has become a strategic national resource critical to scientific and technological advancement. It enables and amplifies other factors of production with multiplier and amplification effects,playing a vital role in developing new quality productive forces. The strength and quality of judicial protection for intellectual property directly influence the effectiveness of protecting innovation outcomes and stimulating innovative vitality,thereby shaping the implementation and progress of the innovation-driven development strategy. The “Three Trials in One” judicial reform,which enhances incentives through institutional improvement and strengthens protection through legal enforcement,represents a major institutional innovation aimed at building an efficient intellectual property (IP) judicial protection system and accelerating the development of new quality productive forces. This paper theoretically investigates the mechanism through which the “Three Trials in One” reform influences innovation among Chinese firms,manually collects data on the implementation progress of the reform across local courts,and employs a multi-period difference-in-differences model to empirically examine its impact on corporate innovation. The findings reveal that the reform significantly promotes innovation by strengthening IP protection,reducing institutional transaction costs for firms,and raising executives awareness of IP rights. These effects are more pronounced among firms facing higher litigation risks,those in industries with high R&D spillovers,and those located in regions with weaker IP intermediary services. Further analysis indicates that intellectual property courts and the“Three Trials in One” model have a stronger innovation-enhancing effect compared to IP tribunals and the “Two Trials in One” model. Moreover,the reform not only increases the quantity of innovation but also improves its quality,demonstrating a dual effect of “increasing both quantity and quality”. This study makes several important contributions. First,by manually compiling detailed data on the rollout of the “Three Trials in One” reform at various local courts,we provide a systematic and long-term policy evaluation at the national level,which offers important insights for advancing the specialization of IP adjudication and the reform of the judicial system. Second,recognizing that the effectiveness of judicial trials,the efficiency of rights protection,and senior managements awareness of institutional reforms are key drivers boosting judicial confidence and stimulating innovation,this paper clarifies the mechanism through which the “Three Trials in One” reform influences firms innovation in China from three perspectives:the protection of firms legal rights,the reduction of institutional transaction costs,and the enhancement of executives IP protection awareness. Third,by exploring the heterogeneous effects ofthe reform across implementation models,industry characteristics,regional environments,and firms litigation experiences,this study provides practical guidance for refining IP judicial protection policies. The paper is structured as follows:The introduction outlines the background and motivation of the research. The second section reviews the policy evolution and theoretical underpinnings of the relationship between the “Three Trials in One” reform and corporate innovation. The third section describes the research design,including the empirical model,variable definitions,and data sources. The fourth section presents the main empirical results,along with mechanism and heterogeneity analyses. The fifth section concludes and discusses policy implications. This study not only evaluates the impact of the “Three Trials in One” reform from the perspective of corporate innovation,but also provides important decision-making support for further optimizing the IP judicial system and supporting the development of new quality productive forces through high-level judicial protection.