The PRC Supreme People's Court has just issued its annual report for 2015 on intellectual property cases. Among other things, the annual report lists 32 cases it decided in 2015 and draws 38 rules from the cases which the court believes can be universally applied in similar cases and thus can be used as guidance in the future.
Many of the cases have been widely reported and discussed. Selection of these cases now indicates that the Supreme Court is confident with its rulings after all the discussions, and thus listing the cases and summarizing key rules from them in the annual report can be taken as the court's quasi-codification of the rules.
We here provide a summary of the rules for readers' ease of reference.
- Section 1. Patents
- Section 2. Trademarks
- Section 3. Copyright
- Section 4. Unfair Competition
- Section 5. Plant Varieties
- Section 6. IC Layout
- Section 7. Procedures and Evidence
Section 1. Patents
1. Patentee's burden of proof for domestic priority claim
Rule: The patentee who claims a domestic priority has the burden to prove that the priority claim is solid, including the burden to submit a proper copy of the priority application and provide explanations why the patent in dispute and the priority application cover the same subject matters. Otherwise the priority claim should be denied.
2. Reference to prior art as part of disclosure
Rule: When a reference is prior art against the subject patent, the reference is cited in the specification of the patent and by virtue of the citation the relevant portions of the reference have become part of a technical solution disclosed in the specification, the portions of the reference should be regarded as having been disclosed in the specification of the patent.
3. Application-environment feature in infringement determination
Rule: If a feature is the most reasonable, common and prevalent running environment and operating mode for implementing the patented process, even if it is not recited in the relevant process claim, the court should consider it in the infringement determination toward that claim.
4. What constitutes the act "sale"
Rule: "Sale" should be carefully differentiated from "offer for sale". "Sale" should be found based on whether a sales contract has been formed, not on whether the contract has become effective, payment has been made, the subject object has been delivered or ownership of the object has been transferred.
5. Interplay of estoppel and equivalency
Rule: To balance the interest of the public and the patent owner, if the patent owner has excluded a subject matter during the application process, he should not reclaim the matter by invoking the doctrine of equivalents.
6. Subject, object and methodology for design patent infringement determination
Rule: The similarity analysis of designs should be conducted according to general consumers' knowledge level and cognitive competence, and a comprehensive determination should be made toward all features of the designs and the overall visual effect. If the patent protects the overall design of a product, comparison should not be done by breaking down the product and changing its original status of use. If a photo of the actual product faithfully shows the objective status of the alleged infringing product, the alleged infringing product as shown in the photo can be used for comparison with the patent in dispute.
7. Identification of key design features and their role in similarity analysis
Rule: A key design feature is one that embodies the innovation where the granted design is distinguished from prior designs and the designer's innovative contribution to prior designs. If the alleged infringing product does not have all the key design features of the granted design patent that are distinguishable from prior designs, generally it can be inferred that the two are not similar designs. The patent owner has the burden to prove the presence of a key design feature, a third party is allowed to provide counter evidence to overturn it, and the court shall make the eventual finding.
8. "Conflicting application" defense
Rule: Similar to the prior-art defense, if the alleged infringer argues that his technology is disclosed in a conflicting application and thus does not constitute infringement of the patent in dispute, the court should examine if the alleged technical solution has been completely disclosed by the conflicting application. If the technical solution has no novelty over the confliction application, a conflicting application defense stands.
9. Prior-design defense
Rule: Where the alleged infringing product is similar to the patent in dispute, if the alleged infringing product adopts a key design feature that distinguishes the patent in dispute from prior designs, the prior-design defense does not stand.
10. Prior-use defense
Rule: If the available evidence proves that the manufacturer was already exploiting or has made necessary technical or material preparations for the exploitation of the patent in dispute prior to the filing date of the patent, and is continuing the manufacturing within the original scope only, a prior-use defense stands. Where the manufacturer is not a defendant of the case, if the seller can prove the legitimate source of the alleged infringing product and the manufacturer's the prior-use right, the seller can also invoke the prior-use defense.
(2) Validity actions
11. General principles of claim construction
Rule: When a feature of a claim is interpreted in a validity action, the claim should be construed in the broadest reasonable manner based on the literal wording of the claim and an understanding of the specification, during which process due considerations must be given to the various statutory requirements of the patent law including that the specification shall sufficiently disclose technical solutions of the subject invention, claims shall be supported by the specification, and amendments shall not include new matter.
12. Interpretation of ambiguous features
Rule: Interpretation of an ambiguous feature in a claim should be made in conjunction with disclosures of the specification and drawings and in line with the objective of the patent in dispute, and shall not contradict with common knowledge in the art.
13. Disclosure sufficiency of inventions on chemical products
Rule: The specification of a patent for an invention on a chemical product should describe the identification, preparation and use of the chemical product.
14. Technical problem on disclosure sufficiency
Rule: A logical order exists between the reproduction of the "technical solution" and the evaluation of "resolution of the technical problem" and "achievement of the technical result". It is first to determine whether persons in the art, based on the disclosure of the specification, are able to reproduce the technical solution before the determination of whether the technical problem is resolved and whether the technical result is achieved.
15. Supplemental data as evidence on disclosure sufficiency
Rule: Regarding experimental evidence that is submitted after the filing date of the patent in dispute, if the evidence can prove that persons in the art, based on their knowledge level and cognitive competence prior to the filing date, were able to reproduce the subject invention based on the disclosures of the specification, the evidence should be considered and cannot be excluded merely because it is submitted after the filing date.
16. Support for a dependent claim by specification
Rule: If a claim is in the form of a dependent claim only nominally and substantively replaces certain features of the independent claim, the scope of this claim should be determined according to the substance of the technical solution it defines, and whether it is supported by the specification should be considered on this basis.
17. Product claim and process product
Rule: For a patent including product claims and process claims, if the product claim is not solely defined by the process claim, possibility exists that the product may be obtained via other processes. In this case, even if the process claim is inventive, it cannot necessarily be concluded that the product claim is also inventive.
Section 2. Trademarks
18. No protection for marks registered in bad faith
Rule:If the holder of a trademark obtained the registration of the mark in bad faith by violating the principle of honesty and credibility, and then files a trademark infringement lawsuit against another's fair use of the mark, the court should not support or protect that bad faith registration.
19. Use of marks in OEM products for export
Rule: Attaching a mark onto OEM products for export only (i.e. not to be sold in Chinese market) does not serve the purpose of differentiating the source of the products or the purpose of identifying the source of the products (within Chinese territory). Thus, such a mark does not function as a trademark (within Chinese territory). Therefore, attaching a mark onto OEM products is not the "use of a trademark" in the sense under the PRC Trademark Law.
(2) Administrative cases
20. Registrability of trademarks concerning a foreign country's name
Rule: Based on the relevant public's level of knowledge and cognitive competence, if a trademark incorporating foreign letters, in its entirety, is not likely be considered identical with or similar to a foreign country's name, it should not be denied registration on the grounds of violating Article 10.1(2) of the PRC Trademark Law.
21. "Upon need" basis for well-known mark recognition
Rule: Courts in trademark administrative lawsuits should also follow the upon-need principle. If the opposed mark does not constitute copying, imitating or translation of the cited mark, or registration of the opposed mark will not cause a result that misleads the public and harms the interests of the registrant of the cited mark, there is no need to determine whether the cited mark is well known.
22. Trademarks with higher distinctiveness and fame shall enjoy broader protection in determining similarity of marks
Rule: When a cited mark is highly distinctive and has achieved high fame, in comparison with ordinary marks, the cited mark shall enjoy broader protection in determining similarity of the cited mark and the disputed mark. Also, competitors in the same industry as that of the cited mark, shall pay more attention in avoiding their own marks identical/similar to the prior marks with high fame.
23. Co-existence of identical/similar marks
Rule: In deciding whether identical/similar trademarks of different parties should be allowed to co-exist, the following three factors shall be considered: 1) the relevant historical background; 2) the prior proprietor's willingness; and 3) whether the parties' trademarks are actually distinguishable in the market.
24. Prior use of marks with certain influence under special historical backgrounds
Rule: In determination of whether an opposed mark is a pirate registration in an unfair means of a mark previously used by another person and with certain influence, the following factors should be considered holistically: i) history of the prior mark; ii) application and registration records of the prior mark, and iii) whether the use of the prior mark was lawful prior to the filing date of the opposed mark.
25. "Use" in non-use cancellation
Rule: Use of a mark under a non-use cancellation action that can be considered should be limited to the goods that are approved for use and listed in the trademark registration certificate.
26. Symbolistic use in non-use cancellation not amount to actual use of the mark
Rule: In determining whether a trademark has been in use, the court should consider whether the registrant has the real intention of use and use acts. Symbolistic use just for maintaining the registration such as use in an advertising agreement or in a license agreement without actual implementation does not amount to actual use of the mark.
Section 3. Copyright
27. Copyrightability of tables
Rule: The manner of expression of a table is relatively fixed, does not has the originality required for a work and is not copyrightable.
28. Co-ownership of copyright
Rule: Pledge or assignment of copyright is a significant disposal of the right. Assignment of copyright without prior consultation with other co-owners is infringement on the co-owners' rights.
Section 4. Unfair Competition
29. Specification of trade secrets
Rule: The right owner should be allowed to specify the content and scope of his trade secrets in the middle of the court proceedings. As long as the other party's procedural rights are not negatively affected, the court's adjudication based on the right owner's such specification does not exceed the scope of the right owner's original claims.
30. Right to issue warning letters
Rule: Issuing a warning letter, prior to or in the middle of an infringement lawsuit, is a way by which the right owner enforces its right, and it is not prohibited by law.
31. Scope of warning letters
Rule: The right to issue warning letters should be exercised within a reasonable scope and with due care.
32. Good-faith prior use of enterprise names
Rule: A good-faith use of an enterprise name, if earlier than use by the owner of the name, does not constitute an unfair use.
Section 5. Plant Varieties
33. Consideration of test reports with different conclusions
Rule: Regarding specificity, the conclusion of a DUS test from field planting prevails over the conclusion from a DNA fingerprint inspection.
Section 6. IC Layout
34. Role of a registered pattern and specimen
Rule: For an IC layout design that has been put into commercial use at the time or registration, the scope of the proprietary right should be determined according to the copy or pattern submitted in the application for registration. When necessary, the submitted specimen can be used as a reference.
Section 7. Procedures and Evidence
35. Refusal to specify trade secrets in non-infringement declaratory action
Rule: Where a party files a non-infringement declaratory action regarding trade secrets, the court should ascertain the specific content of the trade secrets at issue. The court should properly allocate the burden of proof between the parties by taking into account each party's capability to produce evidence and the difficulty to collect evidence. If a party having the capability to produce evidence refuses to specify the specific content of the trade secrets at issue, that party should bear the unfavorable legal consequences accordingly, and this will not affect the court's acceptance of the non-infringement declaratory action.
36. Web pages as evidence and the publication date
Rule: When examining web pages downloaded under notarization as evidence as to the veracity and date of becoming online, the court should consider the following factors:
- the formation process of the notary deed;
- the formation process of the web pages and its publication date;
- the qualification, credibility, operation status of and technologies adopted by the website managing the web pages; and
- other evidence in this case.
37. Weight of evidence and penalty for perjury
Rule: The court should evaluate the weight of a piece of evidence by following the proper procedures, verifying the evidence holistically and objectively and applying logical reasoning and daily life experience according to the law, and disclose the reasoning for and result of the evaluation. Submission of fabricated evidence or false testimony in violation of the principle of honesty and credibility should be punished.
Rule: When an IP right such as a trademark is in conflict with another property right such as a right in rem, whether to impose an injunction should be considered under the principle of good-faith protection and also in consideration of the public interest.