The Second Annual Report on IP Cases of the Supreme People's Court of China

By James F. Ewing and Patricia Wu, Foley & Lardner LLP

This article is part of our Summer 2010 edition of Legal News: China Quarterly Newsletter, Eye on China.

On April 22, 2010, the Supreme People’s Court (SPC) of China issued its annual report on intellectual property (IP) cases. This is the second time since 2008 that the SPC has issued its annual report on IP cases to the public. The report summarized the key IP cases the SPC adjudicated during the year of 2009. With the implementation of the revised Civil Procedure Law and the further improvement of the mechanism for judicial protection of IP, the number of IP cases accepted by the IP division of the SPC has been rising. In 2009, the SPC’s IP division concluded the trial of 390 various IP cases, more than double those in 2008. Characteristics of these cases include an increase in novelty and complexities, an intensification of technicalities, and an increase in foreign-related cases. According to the report, the SPC’s hearing and ruling on the IP cases showed the SPC’s creative efforts to harmonize stability and change in the law, maintain a balance between private and public interests, and achieve a unity in legal and social effects.

In the 2009 report, the SPC selected 37 significant but typical IP cases on which it had rendered final conclusive opinions. These cases cover a wide variety of IP-related issues, including patent and copyright infringement, trademark administration and infringement, unfair competition, technology transfer, and IP contract. The report further summarizes the bearing of liability, the rules of evidence, and the litigation procedure for IP infringement.

The following briefings of the six patent infringement cases were extracted from the translation of the abstract of the 2009 annual report by the China Law & Practice with minor modifications. They were selected to demonstrate the SPC’s decision on the various issues regarding patent infringement.

1. The issue of whether an inferior technical solution falls within the scope of a patent protection.
   In determining whether an inferior technical solution falls within the scope of protection of a patent, the SPC held that it should compare the technical features of the alleged infringing technical solutions with all of the technical features recorded in the patent claims. If the alleged infringing technical solution lacks one of the technical features of the patent, thus giving an inferior technical result, then the alleged infringing technical solution does not fall within the scope of protection of a patent (Zhang Jianhua vs. Zhilian et al., (2008) Min Ti Zi No. 83).
2. The application of the doctrine of estoppel.
   In determining whether there is infringement under the doctrine of equivalents, the SPC may consider the doctrine of estoppel and place necessary limits on the extent of equivalents, even if the alleged infringer has not asserted the applicability of the doctrine of estoppel (Shen Qiheng vs. Shengmao, (2009) Min Ti Zi No. 239).
3. The interpretation of the sequence of steps in the claims for a process patent.
   In determining infringement in a process patent infringement case by applying the doctrine of equivalents, the SPC held that the determination of whether each step needs to be executed in a fixed sequence may be made by combining i) consideration of the entire technical solution as recorded in the patent description, drawings, review dossier, and claims, with ii) the logical relationship between each step. Both the steps themselves and the sequence of execution of the steps should be considered in defining the scope of protection of the process patent (OBE vs. Kanghua, (2008), Min Ti Zi No. 980).
4. The method of conducting a trial of a patent infringement case, including analysis and comparison of the technology.
   Concerning how to specifically judge the “triple fundamental identities” and “obviousness” when applying the doctrine of equivalents, the SPC stated that if the explanation of a patentee’s technical features made by the patentee in an infringement action does not exceed the scope recorded in the claims and is consistent with the patent description and drawings, such technical features may be defined based on its explanation (Xue Shengguo vs. Zhao Xiangmin et al., (2009), Min Ti Zi No. 1562).
5. The meaning of “a patent that has been declared invalid” as used in the first paragraph of Article 47 of the Chinese Patent Law.
   The SPC held that the term “a patent that has been declared invalid” as used in the first paragraph of Article 47 of the Patent Law means a patent declared invalid in a final decision rendered by the Patent Re-examination Board on the validity of a patent in an invalidation petition review. Until such invalidation decision has been made final, it should not be indiscriminately used in civil infringement cases as the basis to directly render judgments or rulings rejecting the rights of the holder’s claims (Wanhong vs. Pingzhi et al., (2009), Min Ti Zi No. 1573).
6. The retroactive effect of a decision declaring a patent invalid.
   For the purposes of the second paragraph of Article 74 of the Patent Law, the term “ruling” means a patent infringement judgment holding that patent infringement has been committed, rendered by a people’s court following a trial. The term means a ruling that has been rendered in respect of such case and has been enforced, and excludes rulings relating to a judgment holding that patent infringement was not constituted (Xueqiang vs. Xu Zanyou, (2008), Min Ti Zi No. 762).