On 22 March 2016,China Supreme People’s Court releases Interpretations on Certain Issues Concerning the Application of Law in the Trial of Patent Infringement Cases (II)(hereafter, Interpretations(II)), which will take effect as of 1 April 2016. In China, like laws made by the People's Congress and regulations made by the State Council, judicial interpretations released by the Supreme Court can be used by the courts as legal basis for rendering court decisions. Therefore, it is predictable that Interpretations(II) will play an important role in future trial of patent infringement cases.

There are 31 articles in Interpretations(II), which summarize some typical cases published on the Bulletin of the Supreme People’s Court and the experience accumulated by various courts across the country in the trial of patent cases. Claim construction, joint infringement, Standard Essential Patents (SEPs), legitimate source defense, injunction relief, damage calculation, and other issues are covered. In general, reasonableness of claim construction and balance of interests between the patentee and the public are emphasized. Some of the notable highlights are briefly discussed below.

Enhancement of patent protection

For a long time, China has been criticized for weak patent protection, high requirements for burden of proof and low amount of damages.

To enhance protection of the patentee's interests, Article 21 stipulates joint infringement, which prohibits acts of providing materials, devices, parts, or intermediary items especially adapted for patent infringement and acts of actively inducing others to perform patent infringement. This is the application of Article 9 of the Tort Law in the patent field.

Article 27 relieves the burden of proof on the patentee, according to which, the court may, based on the fact that the patentee has tried the best to fulfill the burden of proof and relevant evidence is in the hands of the infringer, ask the infringer to submit evidence to show the gains brought by patent infringement. Also, under Article 28, agreements between the patentee and the infringer may be used as a basis for calculating damages in addition to what is provided in Article 65 of the Patent Law.

Prevention of patent misuse

Justification of patent right is based not only on the interests of the patentee, but also on consideration of the public interests of the society. Therefore, in a few circumstances, patent enforcement should be restricted in an appropriate way when necessary.

According to Article 26, if the national interests or public interests will be hurt by stopping the acts of patent infringement, the court may refrain from issuing an injunction and instead may order the infringer to pay reasonable royalty. Article 25 stipulates that a good-faith user of an infringing product may not stop its/his infringement acts based on paying a reasonable pricing, so as to strike a balance between interests. Article 20 restricts undue expansion of the right owner of a method patent, according to which, acts of further processing or treating a subsequent product obtained from processing or treating a product that is directly obtained from the patented method, do not belong to using the product that is directly obtained from the patent method as set forth in Article 11 of the Patent Law.

Enrichment of claim construction rules

Ten articles of Interpretations(II) relate to various complicated issues in claim construction and provide relevant rules.

Article 4 clarifies how obvious errors in claims are to be interpreted. Article 5 makes clear that the preamble portion and the characterizing portion of an independent claim, as well as the referenced portion and the limiting portion of a dependent claim, are all limiting. Article 6 stipulates that the prosecution histories of a parent patent and a divisional patent can be used for mutual understanding of some issues in claim construction. Article 7 confirms the rules of interpreting a closed claim of composition in patent examination practice, with composition of Chinese traditional medicine as an exception, i.e., based on whether addition of a feature causes a substantial influence on the solution of the technical problem. Articles 10, 11, and 12 are directed to product-by-process claims, the sequence of steps in method claims, and the emphatic wording in numerical features, respectively, providing further guidance on patent drafting.

Article 8 defines functional limitations (i.e., means plus function) and the exceptions, and equivalents of functional limitations are clarified. Different from the main stream views in US, the point of time for determining equivalents of functional limitations is the time when the infringing act took place, instead of the filing date. Article 9 provides further details about usage condition features.

More criteria for determining design patent infringement

The design space plays an important role in determining the knowledge and cognitive capability of the average customers for design products.  To further justify the determination of design patent infringement, Article 14 introduces the concept of design space and sets the related rule. That is, where there is a larger design space, it is generally not easy for the average customers to notice a minor difference between different designs; where there is a smaller design space, it is generally easier for the average customers to notice a minor difference between different designs.

Furthermore, Articles 15, 16, and 16 are directed to the criteria for determining design patent infringement regarding a set of products, an assembled product, and a product having variable states, respectively.

Solution to the lengthiness caused by a mixture of civil litigation and patent invalidation

In practice, a civil patent infringement case might involve lengthy process, serial litigations and procedural inefficiency due to the relevant invalidation case. To fix such problems, Article 2 stipulates that the court in charge of the infringement case may, after the Patent Reexamination Board announces the patent as being invalid, reject the civil action in procedure without waiting for the final administrative judgment of the invalidation decision. Please note that the claims of the civil action are not rejected in substance. That is, if the invalidation decision is reversed by an administrative court decision, the patentee may launch a new lawsuit to seek for relief.

Issues relating to SEP

In recent years, issues relating to SEP have drawn a lot of attentions at home and abroad. Considering that SEP involves many complicated issues, only a few common ground issues are clarified in Interpretations(II). With respect to recommended standards, Article 24 explores the subjective fault of the concerned parties and determines whether to issue an injunction and how to distribute the liabilities. But no provision is made as to patent information not disclosed in standards, compulsory standards, international standards, and other controversial issues, which are to be solved in judicial practice.