Q&A with the Director of the Supreme People’s Court’s IP Tribunal on the Interpretation Concerning Certain Issues on the Application of Law for the Trial of Patent Infringement Cases
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Q1: Please give an introduction to the process and background of the legislation.
A1: Trials of patent cases have been conducted in the People’s Court for more than 20 years, since 1985, and rich experience has been accumulated during these years. The Supreme People’s Court promulgated in 2001 the Several Provisions on Issues Concerning the Application of Law in the Trial of Patent Disputes, which have played an important role in specifying trial standards and coordinating China’s entrance into the World Trade Organization. In order to further study the outstanding problems in the trial of patent disputes, the Supreme People’s Court initiated a research project on “judging standards of infringement on patent rights” in 2003, in which a draft judicial interpretation with 70 articles was formulated and opinions on revision of the draft were solicited from the relevant courts, experts and general public. The drafting of said judicial interpretation was suspended in 2003 due to the third amendment of the Patent Law.
On June 5, 2008, the State Council promulgated the Outline of National Intellectual Property Strategy, which outlined the implementation of the national intellectual property strategy. Afterwards, the issuance of relevant judicial interpretation and policy and the perfection of intellectual property-related litigation became the most important tasks for the courts in order to implement the national intellectual property strategy. On December 27, 2008, the Decision on the Revision of the Patent Law of the People's Republic of China was adopted at the 6th session of the Standing Committee of the 11th National People's Congress. The amended Patent Law was implemented as of October 1, 2009. Certain terms under the 2003 draft version interpretation were adopted in the third amendment of the Patent Law.
Based on the new status and the actual condition of national protection for intellectual property, in order to further satisfy the requirements on building an innovation-oriented country and implementing the intellectual property strategy, to correctly follow and implement the spirit of relevant patent rules, to sufficiently exert the pioneering role of judicial protection for intellectual property, to properly handle various disputes concerning patent infringement, and to protect the legitimate rights and interests of the parties, we restarted the drafting of judicial interpretation for the Patent Law in January 2009 and the drafting was listed as a top project in the Supreme Court’s 2009 judicial interpretation schedule. The IP tribunal of the Supreme Court organized a research group composed of certain High People’s Courts to conduct research with respect to the outstanding problems and new conditions during the trial of patent cases. On this basis, the 1st draft was completed in March 2009 and ten amendments were made later on. A draft was disclosed to the general public for solicitation, and opinions were also solicited from relevant departments of the central government and the High People’s Courts. The drafting of the judicial interpretation for the Patent Law gained attention both home and abroad; the IP Committee of the All China Lawyers’ Association, China Pharmaceutical R&D Association and the Patent Offices of the United States, Japan and the European Union all proposed suggestions for amending the draft; more than 200 suggestions were submitted through the internet. Combining the opinions and suggestions from all parties and after discussions and revisions, the final draft was formulated and sent to the Supreme People’s Court for the approval of its trial committee.
Q2: What were the basic ideas for the drafting of the judicial interpretation?
A2: To ensure that the judicial interpretation would conform to the original spirit of the legislation and the actual conditions in China and inspire self-innovation, we paid attention to the following guiding principles when drafting the interpretation: (1) Interpretation by law. We kept to the function of the judicial interpretation and strictly followed the Patent Law and the Civil Procedure Law; we also adhered to the spirit and original ideas of the legislation and the detailed provisions of the laws. (2) Balance of interests. On the one hand, we started from China’s present development in terms of social economy, technology, and culture, and we were guided by the strategic needs of the state, such as to earnestly protect the inventions/creations and the interests therein, to promote the ability of companies for self-innovation and to inspire innovation of new technology and the development of the economy. On the other hand, we strictly adhered to the interpretation of the patent claims so as to correctly identify the scope of protection of patent rights, to sufficiently respect the roles of publicity and delimitation of the claims, and to prevent undue expansion of the scope of protection, extraction of the space for creation, or damages to the ability of innovation and public interests. (3) Pertinence and practicability. We closely attended to the basic and general problems regarding the application of the law that arose during the trial of patent cases, and concluded and specified the rich experience accumulated over the years; we did not wish to make a perfect conclusion and did not formulate provisions for the problems to which no solutions were commonly accepted at the time – we only intended to provide a unified judging standard for the trial practice.
The judicial interpretation addresses major problems with the application of law during the current trial of patent infringement cases, including identification of the scope of protection of inventions, utility models and design patents, determination of infringement in inventions and design patents, application of arguments by existing technology and prior use, and acceptance of cases pleading declaration of non-infringement.
Q3: Since we understand that the judicial interpretation has allocated more provisions on the scope of protection of patent rights, what was your concern during the legislation?
A3: The scope of protection of a patent right refers to the limit of a patent right, which is a basic concept under the Patent Law. Article 59.1 of the PRC Patent Law provides that the scope of protection of a patent right shall be subject to the content of its claims. Therefore, the process of explaining the claims of a patent right is actually the process of defining the scope of protection of the patent right. The strictness of the explanation will directly determine the width of the scope of protection of the patent right and influence the balance between the interests of the patentee and the general public.
Articles 1 to 4 of the judicial interpretation all relate to defining the scope of protection of a patent right. Article 1 provides the basis for such definition by stating that before the closure of court debate of the first instance trial, the patentee may select one or more specific claims to assert that the alleged infringing technical solution has fallen within the scope of protection of his or its patent right. The reason for such a provision is that each claim actually forms a complete technical solution and it is up to the patentee to decide which claim he or it would like to select as the basis for his claimed scope of protection of the patent right. Specifically, the “claims” stipulated in Article 59.1 of the Patent Law do not refer to independent claims only, so the patentee will not be in violation of the law if he or it selects a dependent claim as the basis for defining the scope of protection of his or its patent right; in addition, since the scope of protection defined by a dependent claim will be narrower than that defined by an independent claim or that defined by a cited claim, the patentee will not prejudice the public interest if he or it selects a dependent claim for the same purpose.
In order to avoid disturbance to the litigation proceedings caused by random changes in the selection of the claims, with reference to the provisions under the relevant judicial interpretations of the civil procedure law, Article 1 restricts the time limit for changing the selected claim or claims to the closure of court debate of the first instance trial at the latest. In other words, any change after the closure of court debate of the first instance trial will not be permitted. However, this deadline will not influence the patentee’s right to initiate another lawsuit based on the other claim or claims.
Article 2 provides the principle of “compromised explanation” of the claims from the macrocosmic level. The explanation of the claims shall both reasonably protect the interests of the patentee and enable the general public to be aware of the scope of the patent right at the same time.
Article 3 provides detailed guidance for the explanation of the claims from the microcosmic level. The description and its appended drawings and the relevant claims are all components of the patent authorization documents; such documents have the closest connection to the claims and are usually the best guidance for clarifying the disputed terms. In addition, the patent examination documents, though not part of the authorization documents, are open to the review of the general public; moreover, the terms of the claims shall have the same meanings whether they are subject to the examination or to a lawsuit concerning infringement of the patent. As a result, the patent examination documents are also important for the explanation of the claims. Of course, this does not necessarily mean that the explanation of the claims must adopt all of the foresaid methods; if a claim can be defined simply by the description, the other explanation methods will no longer be considered.
Article 4 explains the process for handling features represented by functions. Some technical features in the claims cannot be described by their structure and therefore have to be described in terms of their function or effect. Since the words used to describe function can sometimes be broadly interpreted, the specific method for implementing such functions or effects shall be considered when making the explanation. In this way, reasonable protection can be provided for the patentee and the interests of the general public will not be harmed.
Q4: The determination of infringement on patent rights is a difficult and key issue for the trial of patent cases and we understand that the judicial interpretation has formulated more systematic provisions therefore. The question is: how should these provisions be understood and applied?
A4: The Several Provisions of the Supreme People's Court on issues Concerning the Application of Law in the Trial of Patent Disputes, implemented as of July 1, 2001, provides the principle of equivalence for determining infringement on patent rights and clarifies that the scope of protection of a patent right shall include not only the scope defined by the technical features recorded in the claims but also the scope defined by the equivalent features.
The judicial interpretation further improves and specifies the rule for applying the principle of equivalence. Article 5 provides a rule which is theoretically called the rule of contribution. The rule provides that any technical solution recorded in the description but not recorded in the claims of a patent right shall be deemed to have been contributed by the patentee to the society; the patentee shall not allege in a patent infringement case that said contributed technical solution belongs to the scope defined by the equivalent features. The rule of contribution is actually a restriction on the principle of equivalence. Such a rule is specified in case of the following circumstances: sometimes an applicant adopts a subordinate concept in his or its claims so that a patent right may be granted more easily, but such a concept is then expanded in the description and the appended drawings. Later the patentee alleges in the patent infringement lawsuit that the expanded concept in the description belongs to the equivalent features and thereby unduly expands the scope of protection of the patent right. This is actually a “two win” scheme. The value of the patent system should be represented by both protection for the patentee’s interests and maintenance of the publicity effect of the claims. As a result, setting forth the rule of contribution will help maintain the publicity effect of the claims and balance the interests between the patentee and the general public. Article 6 provides another rule which is theoretically called the rule of estoppel. This rule is also a restriction on the principle of equivalence. The content waived by the patentee during the authorization or invalidation procedure can not be further included in the scope of protection of the patent right by the principle of equivalence. To enhance the practicability herein, Article 6 emphasizes the restrictive amendment or statement made by the applicant or patentee. The reason for such amendment or statement or whether such amendment or statement has a causal relationship with the granting of the patent right or whether such amendment or statement is adopted by the examiner will not influence the application of this rule.
Article 7 provides the basic principle for determining infringement on patent rights which is theoretically called the principle of full coverage. So long as the technical features of the alleged infringing technical solution include technical features within the scope of the patent right, it will be deemed that the alleged infringing technical solution falls within the scope of protection of the patent right. Whether the alleged infringing technical solution includes any other additional technical features will not influence this decision.
With respect to the more disputable principle of superfluous definition, Article 7.1 provides that all technical features claimed by the patentee in the claims shall be examined, and therefore said principle of superfluous definition is denied. This is based on the consideration that the function of the claims is to define the scope of protection of a patent right, specifically, to enable the general public to be aware of what kind of conduct will or will not infringe the patent right by disclosing to the general public all of the technical features included in the technical solutions of the invention or utility model patent. Only by giving full and sufficient respect to all of the technical features recorded in the claims will the general public be able to encounter the unforeseeable changes in the claims and will stability of the legal rights be ensured.
Q5: What should be noticed when applying the rule on determining similarity in designs under the judicial interpretation? A5: A design protected under the PRC Patent Law must be based on the overall product, rather than a single design separated from the product. Patentees gain from consumers’ recognition of his or its patented product. Therefore, determination of similarity between designs in a patent infringement lawsuit shall be based on the knowledge and recognition of an ordinary consumer. This means that a comprehensive judgment shall be made on the overall visual effect of the design based on all of the features of the design.
Article 11.1 provides the target of “overall observation”: all of the features of a design shall be considered; however, since it is the external appearance that is protected by a design patent, the functional features and non-visible internal features shall be excluded from consideration. Article 11.2 provides the factors that should be considered in the “comprehensive judgment”: generally speaking, the front view and innovative part will be more influential on the overall visual effect of a design. Article 11.3 provides the judging standard for the “comprehensive judgment”: based on the observation of the influence of the features on the overall visual effect of the design, a comprehensive judgment shall be mad as to whether the alleged infringing design has substantial difference in visual effect with respect to the patented design. If no substantial difference is found between the patented design and the alleged infringing design, similarity can be deemed between the two designs.
A design patent only protects the external appearance of the product as revealed in the picture in the authorization documents; it does not cover technical solutions, which are only protected by an invention patent or a utility model patent. Therefore, when determining whether similarity exists between the designs, the rules for determining infringement on invention or utility model patents can not be directly applied; instead, it should be examined as to whether an ordinary consumer will be confused with respect to the overall visual effects of different designs. Instead of using the criterion under the Trademark Law that there be “confusion”, this Article 11 adopts the wording that “no substantial difference is found in the overall visual effect”.
Q6: How is infringement by spare parts regulated under the judicial interpretation?
A6: According to Article 70 of the Patent Law, the user of an infringing product will not be liable for compensation on certain conditions, but the manufacturer can in no circumstance be exempted from compensation. As a result, there must be a legal distinction between the manufacture and use of a product. With respect to the circumstance that an infringing product is used as a spare part of another product, two opinions exist in judicial practice: (1) such shall be deemed as “manufacture”; (2) such shall be deemed as “use”. Since what is manufactured by the alleged infringer is a separate product and the infringer does not manufacture the infringing product itself, Article 12 of the judicial interpretation defines such a conduct as “use”. Since the use of a product does not constitute infringement on a design patent , using an infringing product as a spare part of another product and selling the other product shall be considered a sales conduct ; however, since a design patent only protects the external appearance of a product, if the spare part only plays a technical or functional role in the normal use of the final product and generates no visual effect, then the aforesaid conduct can not be deemed as sales. This corresponds to Article 11.1 of the judicial interpretation. Article 12.3 is a notwithstanding clause to its preceding two paragraphs. The preceding two paragraphs are provided for circumstances where the relationship between the manufacturer of the infringing product and the manufacturer of the other product is that of a normal buyer and seller. If the two manufacturers agree on allocation of work and cooperation, they shall be deemed as conducting the manufacture together and therefore shall be liable for contributory infringement according to Article 148 of the judicial interpretation of the General Principles of Civil Law.
Q7: Argument by existing technology is a new provision added into the 3rd Amendment to the Patent Law and the judicial interpretation has also provided corresponding explanations; the question is: how should one understand these explanations?
A7: Argument by existing technology and existing design is a new system added into the 3rd Amendment, which is an argument of non-infringement made by the alleged infringer in response to the patentee’s allegation. The theoretical basis of such a system is that the scope of protection of the patent shall not include any existing technology. Article 62 of the Patent Law provides that in a patent infringement dispute, if the alleged infringer has evidence to prove that the technology or design he or it implements belongs to an existing technology or design, it will be deemed that there was no infringement of the patent right. With respect to how to determine whether the technology implemented by the alleged infringer belongs to an existing technology, the judicial interpretation, for the sake of practicability, compares the technical features that are alleged to have fallen within the scope of protection of the patent right (instead of all of the technical features of the technology implemented by the alleged infringer) with the corresponding technical features of an existing technology. If the two are identical or no substantial difference is found between the two, it can be deemed that the technology implemented by the alleged infringer is an existing technology and therefore no liability for the infringement shall be pursued. This can save procedural resources, help solve the dispute in time, and protect the legitimate right and interest of the parties.
Q8: Why does Article 15 of the judicial interpretation require that after the date of application, the owner of prior use right should assign or succeed the technology or design together with the original enterprise?
A8: The patent system adopts the principle of prior application, i.e., a patent right shall be granted to the person or entity who first files an application with the patent authority. The principle of prior use is aimed at remedying the defects in the principle of prior application. However, it is necessary to have a reasonable balance between the interests the owner of the right of prior use and those of the patentee; if the owner of the right of prior use assigns the technology to others or licenses others to use the technology after the date of application, new competitors will appear in the market and the patentee’s right of exclusive use of the technology will be prejudiced. As a result, the judicial interpretation provides that after the application date, the owner of the right of prior use can only assign or succeed a technology or design that has already been implemented or has already undergone essential preparation for implementation. Assignment or licensing by the owner of the right of prior use before the application date will not be restricted. In addition, according to Article 15.1, a technology or design based on which the alleged infringer makes the argument by prior use right shall not be illegally acquired – such technology or design shall be acquired through self research & development or lawful assignment.
Q9: Why does Article 16 of the judicial interpretation provide that “the benefits arising from other rights shall be reasonably deducted”?
A9: In the circumstance that an infringement case is brought against a product that has several patent rights or both patent rights and trademark rights, it will be improper to determine the profits of the infringer based on all of the profits of the product – the infringer’s profits shall be restricted to those gained from the infringement on the disputed patent right or rights.
Q10: How should one understand the term “new products” in Article 17 of the judicial interpretation?
A10: How the term “new products” is defined will directly influence the application of reverse burden of proof in a lawsuit concerning infringement on a new product method patent. In order to unify the standard for defining “new products”, Article 17 provides that if the technical solution for a product or for the manufacture of a product is publicly known at home and abroad before the date of application, such a product shall not constitute a new product.
Q11: Since the litigation system for non-infringement declaration is specified in judicial interpretations for the first time, how should this new system be understood?
A12: With respect to a continuing patent infringement that spans the date of October 1, 2009, the date that the new Patent Law comes into effect shall be the division date, before or after which the then-effective Patent Law shall be applied to determine whether an infringement has been constituted.
With respect to the amount of compensation, the Patent Law before the 3rd Amendment did not provide a system of statutory compensation, but the Several Provisions of the Supreme People's Court on issues Concerning the Application of Law in the Trial of Patent Disputes provided supplementary explanations in this respect and solved the problem of calculating compensation to a large extent. The amended new Patent Law accepted this commonly applied rule and appropriately raised the limits of the compensation: the minimum was increased from 5,000RMB to 10,000RMB and the maximum was increased from 500,000RMB to 1,000,000RMB. In view of this, in order to represent the increased compensation, if a continuing patent infringement spans the date of October 1, 2009 and the infringer is held liable for compensation under the patent laws both before and after the 3rd Amendment, the sum of compensation shall be subject with no exception to the statutory compensation of the new Patent Law, rather than applying the patent laws according to the period of time before or after the division date.
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