Saelink Law - Yunchuan Zhou, Wenxuan Chen and Kehao Zhang

Introduction

On April 16, 2019, the Supreme People’s Court of China released the Annual Report of the Intellectual Property Cases of the Supreme People’s Court 2019 (referred to as the “2019 Report”). This Annual Report is an IP-related case- compilation project aimed to strengthen typical exemplary effect of model cases and further unify the standards for adjudicating technology-related IP cases. The 2019 Report selected and accepted 60 exemplary cases and concluded 67 specific rules on the application of law. Compared with previous annual reports, the 2019 Report reflects some new developments in IP-related trials and, particularly, the Supreme People’s Court’s opinions and policies in adjudication of patent infringement cases.

Highlights of Patent-Related Trends

1. Patentee-friendly policies; and new options on the drafting of patent claims

• The protection scope of functional features has been further expanded in comparison with the scope stipulated in judicial interpretations released respectively in 2009 and 2016. In 2019 Report, the drafting model of “structure plus function” has been clearly defined as a comprehensive drafting method or a superior concept rather than a Functional Feature under judicial interpretations above-mentioned, and thereby widen the scope of patent protection.
• In 2019 Report, the invention patent infringement case of Shenzhen Jixiang Tenda Technology Co., Ltd. (Appellant) v. Shenzhen Dunjun Technology Co., Ltd. (Respondent) involved the patent for “a method for easy access to a portal website of a network operator”. This case, taking the technical features of the network telecommunication field as an important consideration, set up a new adjudication rule on multi-actor method patent infringement, that is, if the alleged infringer, without the patentee’s permission, realizes the substance of the patented method of the allegedly infringing product for the purpose of production and operation, and plays an irreplaceable and substantial role in the comprehensive coverage of the technical features of the patent claims; then in such a case, it should be held as an infringement on the method patent.  The new adjudication rule supplemented the joint infringement rule and indirect infringement rule and thus benefits all patentee in tele-communication and relevant industries.
• The adjudication rules established in the above-mentioned cases may, in turn, influence the drafting method of patent claims, providing more options for the patentee in protection of their technological innovations.
• The maximum amount of patent infringement damages has been significantly increased.

2. The influence and dominance of judicial system have been enhanced

• In PRC, invalidation procedure and infringement litigation function in a dual system mode and are kept strictly separate. Patentee is not allowed to defend on invalidation grounds in the civil infringement procedure and must file an independent invalidation application with administrative authorities. However, in 2019 Report, there is a case in which the Supreme People’s Court widened the range of possible interpretation of “prior art” by adjudicating that where the technical feature corresponding to one innovation point has already been disclosed in one prior art, and the remaining technical features are not disclosed in the prior art, but the combination of the prior art and general components inevitably forms, as a whole, an prior art solution corresponding to the patent involved, then it can be determined that a prior art defense has been established. This rule, to some extent, lessens the necessity of commencing an independent invalidation procedure with administrative authorities in parallel with the civil infringement litigation.
• In another case from the 2019 Report, where the patentee had requested the administrative authority to investigate certain infringement case, such request could be seen as “the patentee having sent out warning letters to the infringer”, and which, in turn, allows other alleged infringers who did not participate in the investigation to initiate a declaratory litigation procedure with proper venues.

3. The possibility of revoking second-instance judgements by applying for retrial will be lessened, and preparation for second instance is increasingly important

Before the establishment of the Intellectual Property Tribunal in 2019, the patent cases on appeal fell within the jurisdiction of high courts in locality, and a proportion (at least 10%) of those cases, for dissatisfaction with the high court judgements, were corrected by applying to the Supreme People’s Court for retrial. Now all patent cases on appeal shall be tried by the Intellectual Property Tribunal of Supreme People’s Court. Theoretically, it is still feasible to apply to the Supreme People’s Court for a retrial, although by another tribunal, which, however, is obviously difficult to commence. The establishment of the Intellectual Property Tribunal made all patent-related appeal cases scattered in 31 high courts across China before gather under the jurisdiction of the same court, and thus greatly enhanced the standardization and predictability of the judgment. This new system requires lawyers to equip themselves with a comprehensive expertise to persuade judges by utilizing the unified rules and standards rather than a case-by-case analysis.

Conclusion

In general, the opinions and policies which the Supreme People’s Court advocates, recently, are in favor of patentees. Unification, standardization and innovation of judicial rules will be popular in patent-related cases. With a judicial system increasingly built on innovation, patentees must be more professional and skilled in policy analysis, strategy-formulating and rule-utilizing. It is highly recommended that patentees foster up-to-date strategies to protect their patents and legitimate rights in the context of China’s fast-developing intellectual property policy landscape.