35 SEP. 2016
Innovation index report: China ranks the 18th place...2
Opinions of the State Council on Accelerating the Establishment of a Strong IPR Country under the New Situation - Division of Tasks........................................2
Common initiatives for strengthening cooperation between countries along the "belt and road" in the field of intellectual property.........................................3
Patent disputes mediation period shortens to two months........................................................................4
More goods and services are acceptable for trademark registration.................................................4
SIPO proposes to amend the Patent Law.................5
Chinese legal developments: counting the cash.........7
China's new patent infringement trial rules become effective - introduction to the Judicial Interpretation (II) regarding patent infringement of the China's SPC (Part I) .......................................................................9
FAQs about patent procurement and enforcement in China ..............................................................15
China focus: a match not made in heaven...............19
Case guidance system and stare decisis principle in IP cases....................................................................21
From the Editor
Almost every eight years, the Chinese Patent Law is revised so as to meet the policy consideration and to reconcile with the case laws made by the courts. So, it is the right time to probe into what the government is considering now by looking into the draft amendments to the Chinese Patent Law. We can read from the draft amendments that China is continuing to enhance protection of patent rights and to promote exploitation of patents.
Meanwhile, we scrutinized the Judicial Interpretation (II) regarding patent infringement issued by the Supreme People's Court (SPC) earlier this year. The Judicial Interpretation (II), like the other Judicial Interpretations issued by the SPC, is the practical law regulating protection of patent rights, mirrors the typical cases made by the SPC during the last few years and reflects the attitude of the Court in applying the Patent Law in particular cases.
Besides, we updated you the legal developments regarding protection of patent rights in China, the general requirements on patent practice, and the case guidance system and stare decisis principle in IP cases. We also introduced a very interesting trademark case "Fei Cheng Wu Rao", which is an epitome of the vast trademark disputes springing up in China.
1. Innovation index report: China ranks the 18th place
China dropped to the 18th place from 17th among the 40 countries whose spending on R&D accounts for 97% of the total in the world, according to the 2015 report on national innovation index issued by Chinese Academy of Science and Technology for Development on June 29, 2016.
According to the report, China's national innovation index was 68.6 points, 0.2 points up over the same period of last year. Among the five first class indicators, China saw a rise in innovation resources, knowledge creation and enterprises innovation index. The ranking of innovation performance was almost flat from 2015, while that of innovation environment saw a decrease from 2015.
In terms of knowledge creation, the number of China's SCI report reached 250,000 in 2014, and the total number of citations for China's SCI paper stood at 6.334 million during the five years from 2010 to 2014. Both indicators rank the second position in the world. In 2014, China received 801,000 invention applications from domestic, accounting for 47.5% of the world's total. China granted 163,000 invention patents to domestic applicants, accounting for 24.8%, ranking the first and second in the world respectively.
China moved up from 13th to 12th position in terms of enterprise innovation. In 2014, the number of PCT application filed by per 10,000 researchers increased from 233 in 2013 to 270, and it moved up slightly to the 27th place from 26th place. The share of invention patents granted by the U.S., Japan and Europe and the ratio of R&D investment to value added ranked the 6th and 15th position respectively. The ranking of comprehensive self-developed technology moved up from 13th to the 9th position.
"The scale and quality of enterprise innovation usually denote the innovation level of a country. Although China made it into the top in PCT application, there was a gap in R&D inputoutput compared with some developed countries in the world. Improving PCT applications level should become the key point
of enhancing domestic enterprise innovation capability," said a relevant expert.
"With the rapid development of patent outputs, there is a growing need for IPR protection, so China should further enhance IPR protection, " in reaction to the fall of innovation environment ranking, Wu Yishan, Deputy Director of Chinese Academy of Science and Technology for Development said.
2. Opinions of the State Council on Accelerating the Establishment of a Strong IPR Country under the New Situation - Division of Tasks
On July 18, 2016, the State Council issued the action plan for the Opinions of the State Council on Accelerating the Establishment of a Strong IPR Country under the New Situation Division of Tasks. The action plan aims at breaking down and refining the tasks proposed in the Opinions, and pushing forward actions for protection and application of IPRs nationally and internationally. It assigned the responsibilities to each relative department and reaffirmed the efforts in the following respects.
1. Pushing forward the restructuring of IPR management mechanism
(1) Researching and improving the management mechanism of IPRs.
(2) Polishing up the IPR service industry and the management of social organizations.
(3) Establishing the appraisal system for IPRs in major economic activities.
(4) Establishing an appraisal system for innovation-driven development taking IPRs as a major part.
2. Implementing stricter IPR protection
(1) Strengthening the punishment for infringement of IPRs.
(2) Cracking down on IPR crimes, both nationally and internationally.
(3) Establishing and improving early warning and prevention mechanism for IPRs' protection.
(4) Strengthening protection of IPRs for innovation achievements in emerging industries.
(5) Regulating abuse of IPRs.
3. Promoting creation and application of IPRs
(1) Improving the examination and registration mechanisms of IPRs.
(2) Improving the service-invention system.
(3) Pushing forward the reform on patent licensing system.
(4) Speeding up the establishment of IPR trading platforms.
(5) Cultivating IPR intensive industries.
(6) Enhancing the added value and international influence of IPRs.
(7) Strengthening the opening and use of IPR information.
4. Improving overseas IPR layouts and risk control of the key industries
(1) Improving the overseas IPR layouts of the key industries.
(2) Expanding overseas IPR distribution channels.
(3) Improving the risk warning system of overseas IPRs.
(4) Promoting the risk control ability against overseas IPRs.
(5) Providing more support for overseas IPR protection.
5. Promoting international cooperation in IPRs
(1) Pushing forward the establishment of more fair and reasonable international IPR provisions.
(2) Enhancing the construction of international cooperation mechanism for IPRs.
(3) Providing more support on the developing countries in IPRs.
(4) Expanding public diplomacy channels for IPRs.
6. Enhancing policy supports
(1) Increasing financial and tax support.
(2) Strengthening the IPR talent team construction.
(3) Improving publicity and guidance.
By carrying out the proposed actions, it is expected that a more active and effective IPR environment can be formed in China and that a more sophisticated strategy in seeking overseas IPR protection and in avoiding overseas IPR infringement can be taken by Chinese companies.
3. Common initiatives for strengthening cooperation between countries along the "belt and road" in the field of intellectual property
During the High-Level Conference on Intellectual Property for Countries along the Silk Road Economic Belt and the 21st Century Maritime Silk Road ("Belt and Road" Initiative, BRI) in Beijing, China from July 21 to 22, 2016, the Round Table on Intellectual Property for Countries along the "Belt and Road" (closed session) was held by representatives of the intellectual property (IP) authorities from countries along the "Belt and Road" and was attended also by the World Intellectual Property Organization (WIPO) and the Gulf Cooperation Council (GCC) as observers. On the Round Table, the IP authorities of participating countries discussed the vision for cooperation in the field of intellectual property and agreed upon the following common initiatives.
that the Silk Road has fostered economic and cultural exchanges, promoted shared prosperity and development among Countries along the historical Silk Road, and established a tradition of peaceful cooperation, openness and inclusiveness, mutual learning and mutual benefit;
that the 21st Century is an era marked by peace, development, cooperation and mutual benefit. In the context of a world characterized by multi-polarity, globalization, cultural diversity and information-based societies, it is especially important to maintain free trade and open economy globally;
that IP, as the intangible property rights protecting the essence of human ingenuity, has become an important
resource for national development by playing a vital role in incentivizing innovation and promoting economic growth and cultural prosperity
that close cooperation among BRI Countries serves the common interests and is conducive to establishing a sound IP ecosystem, improving our respective IP systems, and creating favorable environment for innovation and sustainable development and
that cooperation among BRI Countries should fully consider and respect the differences in levels of economic development, culture, innovation capabilities and the respective domestic legal frameworks of BRI Countries;
The IP authorities of BRI Countries will make sustained efforts to explore the prospects for enhanced dialogue and cooperation in the IP field, and therefore reached the following initiatives (details omitted):
1. Enhancing exchanges and cooperation on IP laws and regulations, policies and strategies
2. Supporting IP authorities of BRI Countries to enhance capacity building in order to provide accessible, efficient and cost-effective services to IP users and help them better utilize the IP system
3. Encouraging pragmatic cooperation on IP protection among BRI Countries
4. Supporting the exchanges and cooperation among BRI Countries on raising public awareness about IP
5. Supporting BRI Countries in strengthening cooperation in human resources development
6. Encouraging BRI Countries to enhance IP information sharing and utilization
Considering the importance of WIPO and its essential role in global IP development, the IP authorities of the participating countries invited WIPO to provide necessary technical assistance and support in implementing these Common Initiatives.
Based on the above initiatives and for the purpose of advancing the cooperation among BRI Countries in the IP field, the Round Table of such will be organized further to discuss specific cooperation matters in order to facilitate in-depth cooperation.
4. Patent disputes mediation period
shortens to two months
SIPO released a notice earlier this year to strengthen patent disputes mediation. According to the notice, relevant department in charge of patent administration must conclude patent disputes mediation within two months. The notice regulates that relevant departments should play a positive role in helping to bring about a mediation agreement between two parties pursuant to the law. In case of failing to reach a mediation agreement, the department should issue a notice on mediation termination and then drop this case. If two parties accept the mediation, the department should conclude the case within two months. If the case is complex and timeconsuming, the mediation period could extend to at most three months.
According to an official of SIPO, this paper is helpful to improve the law enforcement basis, to enhance the level of things afterwards supervision, to strengthen the system of law enforcement and to make law enforcement more scientific, normative and coordinative.
5. More goods and services are acceptable for trademark registration
On July 12, 2016, the China Trademark Office announced that in addition to the goods and services listed in the Classification Table of Similar Goods and Services for Registration of Trademarks, 2,000 more goods and services are acceptable.
According to the announcement, the release of these acceptable 2,000 goods and services is a measure to facilitate trademark registration procedure, on-line filing and searching.
There are more than 10,000 goods and services listed in the classification table. Obviously, the adding of such 2,000 more acceptable items to the table provides greater flexibility for trademark applicants. We also expect to receive less rejections on the ground of using non-acceptable goods or services.
The classification table not only provides guidelines for trademark office to examine trademark applications, but also for administrative and judicial authorities to hear trademark infringement disputes.
SIPO proposes to amend the Patent Law
By Ji Liu
Almost four months after the submission of the draft Patent Law Amendment Bill of China proposed by SIPO, which passed through the Bureau Affairs Meeting of SIPO in late August 2015, the Legislative Affairs Office (LAO) of the State Council released this draft on 2 December 2015, for further public consultation. In the meantime, the Bill has been developed as a Preparatory Project in the Legislative Programme 2015 of the State Council from the Research Projects in the last year. The above signs indicate that the Amendment Bill can be expected to be finally passed by the National People's Congress (NPC) in two or three years.
The Chinese government has paid increasing attention to the importance of intellectual property in recent years. In June 2014, the Standing Committee of the NPC heard the Report on the Implementation of the Patent Law and emphasized that the Patent Law Amendment Bill should focus on enhancing the protection of patent right and on coordination and convergence amongst laws. To that end, the latest draft Bill includes, amongst other things, provisions aiming at strengthening patent enforcement, enhancing protection of design patent, perfecting service invention system, promoting exploitation and utilization of patent, and giving more power to the Patent Reexamination Board.
Strengthening patent enforcement
There are several problems exist in the current situation that hinder the enforcement of patent rights. For example, it's often difficult to collect evidence for proving infringement and damages. Moreover, damages awarded in infringement suits are usually inadequate to compensate for the loss of the proprietors.
To remedy the above, the latest draft Bill proposes to strengthen the measures to collect evidence in both court and
The court may order the defendant to submit account books and other evidence, which are not accessible to the proprietors, to prove the damages. In the case the infringers refuse to submit, or deliver up forged account books or the like, the court may determine the amount of damages by reference to the proprietors' claim. Further, double or triple damages are brought into the draft Bill for willful infringement, depending on factors including circumstances, scale and consequences of infringement. Also, the maximum statutory damages is proposed to be increased from 1 million Chinese Yuan to 5 million Chinese Yuan.
With respect to the administrative route, the Patent Administration Departments (PAD) may have more measures to investigate and collect evidence, including for example, making inquiries to the relevant persons, conducting on-spot inspection, examining and making copy of the documents, inspecting the accused product, and sealing and detaining the products of willful infringement that disrupts the market order. The PAD may have more power to stop infringement as well. If the PAD finds willful infringement is established and disrupts the market order, it can order the infringer to stop infringement activity, confiscate illegal earning, seize infringing products or special equipments used for the infringement, and impose a fine. Further, the agreement made through the mediation by the administrative organ can be affirmed and enforced by the court.
SIPO also plans to take measures to curb the patent infringement over internet. According to the draft Bill, Internet Service Provider (ISP) shall be obligated to takedown the links to infringing products, when the ISP knows or should have known that an internet user infringes upon the patent right by
utilizing the internet services it provides.
Enhancing protection of design patent
An interesting and significant improvement regarding design patent is partial design. According to the draft Bill, the scope of a design patent is expanded to partial design of a product. Also, as an effort to meet the requirement of the Hague Agreement Concerning International Registration of Industrial Designs, SIPO proposes to extend the protection term of a design patent from 10 years to 15 years. The above will add to the effectiveness of a design patent as a deterrent to infringement.
Perfecting service invention system
Under the current patent law, inventions that are made mainly by using the material and technical conditions of an employer shall be deemed as an employment invention. In contrast, in the draft Bill, statutory ownership for such kind of inventions is changed to the inventors, unless otherwise agreed between the inventors and the employer.
The employer has the obligations to reward the inventors and give remuneration to the inventors for the employment invention, no matter whether or not the invention is transferred to others before or after the filing of the patent application.
Promoting exploitation and utilization of patent
Seemingly learning from the German Patent Act, SIPO
introduces the concept of License of Right (LOR) into the draft Bill. The patent proprietors may request SIPO to publish a written statement so as to offer a license to anyone at a defined royalty. Before withdrawal of the offers of LOR, the patentee shall not grant exclusive or sole license to others, or request for preliminary injunction.
With respect to Standard Essential Patents (SEP), SIPO's new draft add implied license for undisclosed SEP. If the patentee fails to disclose his essential patents during the process of standards formulation, it shall be deemed that the user of the standards has been licensed to use the patented technology. The license fee shall be negotiated between the parties, and in case no agreement is concluded by the parties, SIPO shall make a decision thereon.
Giving more power to the Patent Reexamination Board (PRB)
In the draft Bill, the PRB is empowered to bring new grounds, e.g. other obvious substantive defects, into reexamination or invalidation proceedings on its own initiative even if such defects are not mentioned in the rejection decision or in the invalidation request. This proposal has attracted many criticisms during public consultation, but retains in the latest draft.
The draft Bill, if finally passed ratification by the NPC, would be positive for patent proprietors, as it would lower the burden of proof and be more effective to recover higher damages for willful infringement. It would make enforcement quicker and would further strengthen the power of the administrative organ to deal with patent disputes. All of these amendments will directly or indirectly enhance protection of patent rights in China through a more sophisticated patent system.
Chinese legal developments: counting the cash
By Guoxu Yang
The Chinese government has realized the importance of the patent system in promoting the innovation of technologies and has taken certain measures and steps to enhance the protection of patent rights. The following are some trends and developments on patent protection in China in 2015.
Chinese entities and individuals are actively enforcing patent rights
According to the "White Paper on Judicial Protection of Intellectual Property Rights in 2015" released by the Supreme People's Court, the number of patent infringement civil cases of first instance reached 11,607, with a 20% increase over the number in 2014. Among those cases, `foreign-related' disputes remain remarkably few since the number of all foreign-related civil IP cases decided at first instance in 2015 is just 1,327, a decrease of 22.6% compared with the 2014 number.
In contrast, most of the patent infringement cases are between Chinese individuals and entities. The Chinese companies mentioned in the white paper include companies invested in by foreigners, such as the Chinese subsidiary of a foreign company. In 2015, we did see more and more native Chinese companies start to enforce their patent rights. For example, Chinese internet company Sogou sued Baidu for patent infringement based on 17 patents and claimed damages of up to $40 million in total.
Some standard-essential patent (SEP) owners enforce their patents in Shanghai, Beijing, and Guangzhou. These include Iwncomm, a Chinese company based in Xi'an, Shaanxi Province, which holds SEP patents on WAPI technology. It sued Sony Mobile (China) and other companies. In addition, a Chinese company named Qihu sued competitors based upon three design patents.
Chinese patent law and protection mechanisms are improving
From a legislative aspect, China is amending its Patent Law for the fourth time. In the proposed amendments, the protection
of patent rights is enhanced. For example, punitive damages will be available if the infringement is found to be willful and the statutory damages will be increased to RMB 5 million ($752,000), according to the draft. In addition, the administrative protection of patent rights is also to be enhanced by increasing the power of local IP offices.
The Supreme Court issued new interpretations on judgments on patent infringement following the interpretations issued in
2009, which have been effective from April 1, 2016. In the new interpretations, issues such as claim construction, functional limitation, indirect infringement, SEP enforcement and determining royalties for fair, reasonable and nondiscriminatory licensing, injunctions and calculation of damages, effect of an invalidation decision on infringement proceedings and judgments on design infringement are regulated.
As the Supreme Court interpretations are binding on all Chinese courts, they provide rules for rights owners and the courts in litigating patent infringement, and also help patent applicants to draft and prosecute patent applications to ensure safety and predictability of patent enforcement.
From a judicial aspect, IP courts were established in Beijing, Shanghai and Guangzhou by the end of 2014. The IP courts have exclusive jurisdiction over patent cases within the relevant areas. Until now, the goal for setting up the IP courts has been reached. Since the IP courts attracted a large number of patent cases and the judges were limited, they produced a certain backlog of cases.
"punitive damages will be available if the infringement is found to be willful and the statutory damages will be increased."
But the situation is changing for the better: new judges are joining in and the way to try a case is also improving. The introduction of judge assistants, who are technical investigation officers helping the judges try patent cases, especially complicated patent cases, increase efficiency.
China is a statutory law country. The courts try cases merely according to the laws, regulations and Supreme Court interpretations. However, Chinese courts are trying to take advantage of the case law system. For example, the Supreme Court established the Typical Case Guidance Research (Beijing) Center in April 2015 in an attempt to set up a case guiding system with prior cases having directive significance. The test has been started from the Beijing IP Court and may expand to the whole country in the future.
Each year, the Supreme Court publishes ten IP cases that have had an impact in the country and 50 typical IP cases with a certain guidance value. Local courts at the provincial level also publish typical IP cases that have a certain impact within that area. For example, in 2015, 140 typical IP cases were published by the high courts in some provinces and municipalities.
Higher damages could be expected
In patent infringement cases tried in the past, the damages awarded by the courts were not very high. According to statistics from a sample survey of certain court cases in China two years ago, the average amount of damages awards by Chinese courts was only about RMB 80,000 for patent infringement cases. The damages awarded by the courts are too low to cover the expenses for stopping the infringement, let alone the economic loss of the rights owner. The situation frustrates the enthusiasm of patent owners for enforcing their patent rights, and has to be changed.
The Chinese legislative body is amending the Patent Law and the Supreme Court has issued interpretations on the determination of damages and allocation of burden of proof. According to the interpretations, if the rights owner has provided initial evidence regarding the benefit obtained by the infringer, but the accounting books and the materials relating to the infringing acts are mainly under the control of the infringers, the court may order the infringer to surrender the accounting books and materials.
Where the infringer refuses to surrender without cogent reason or delivers up forged accounting books or materials, the court may determine the benefit obtained by the infringer as a result of the infringement by reference to the rights owner's claim and the evidence as submitted. In addition, if the rights owner and the infringer had reached an agreement on the amount of damages due to patent infringement or the manner of calculating the damages based on the laws, the court should support it if the rights owner claims to determine the amount of damages based on the agreement in a patent infringement litigation.
With the enhancement of the laws, regulations and interpretations on the damages and also with the effort of patent owners to collect evidence of damages positively, higher damage compensations in patent infringement cases could be expected in the future.
China's new patent infringement trial rules become effective
- introduction to the Judicial Interpretation (II) regarding patent infringement of the China's SPC (Part I)
By Xiaojun Guo and Weiwei Han
On March 21, 2016, the China's Supreme People's Court issued the Interpretation on Several Issues Concerning the Application of Law in the Trial of Patent Infringement Cases (II) (the "Judicial Interpretation (II)"), which have come into force as of April 1, 2016. The Judicial Interpretation (II) was implemented on the basis of a number of cases already made by the Supreme People's Court and in an environment that patent infringements continue growing fast for years, many issues in patent infringement disputes touch on the kernel of the patent system, which shows great significance in the development of economy and incentive of innovation.
The Judicial Interpretation (II) includes 31 articles and covers both procedural and substantive aspects. The following discussion would try to reveal the real meanings of the articles, the stories behind them and the possible controversies if any. Articles 23 and 29-31 are self-evident and therefore will not be discussed here.
I. Claim construction
Multiple articles relate to construction of patent claims, aiming at enhancing the notice function of the claims for clearly defining the boundary of a patent right, and unifying the different criteria of claim construction taken by different courts.
Article 5 of the Judicial Interpretation (II) reads,
When a people's court determines the protection scope of a patent, the technical features defined in the preamble and the characterizing portions of an independent claim, and the technical features defined in the reference and the characterizing portions of a dependent claim shall all be considered.
Article 17 of the Several Provisions of the Supreme People's Court on Issues Relating to Application of Law to Adjudication of Cases of Patent Disputes sets basically the "all-elements-rule" in construing the protection scope of a claim. That is, the protection scope of a patent right shall be determined by all the technical features recited in a claim. This rule can be more definitely found in Article 7 of the Interpretation on Several Issues Concerning the Application of Law in the Trial of Patent Infringement Cases (I) issued by the Supreme People's Court (the "Judicial Interpretation (I)"), which reads,
When a people's court determines whether an accused technical solution falls within the protection scope of a patent, it shall examine all the technical features recited in the claim asserted by the right holder.
Article 5 of the Judicial Interpretation (II) emphasizes that the features defined in the preamble portion of an independent claim or in the reference portion of a dependent claim shall be considered in claim construction.
In Xinghe Industry Co. Ltd. of Harbin Institute of Technology v. Jiangsu Runde Pipeline Co. Ltd., the Supreme People's Court held that,
In determining the protection scope of a claim, the title of the claimed subject matter recited in the claim shall be considered, and its practical limitation depends upon the impacts imposed by it on the claimed subject matter.
In this case, the Court found the technical features of claim 1 which is referred to directly by claim 2, which defines "a process for manufacturing the drainage pipeline of steel strip reinforced plastics according to claim 1", and is referred to indirectly by claim 6, which defines "an apparatus for manufacturing the drainage pipeline of steel strip reinforced plastics for implementing the process
according to claim 2", would have essential impacts on claims 2 and 6 and therefore shall have limitation to the claimed inventions.
2. Intrinsic evidence
Article 6 of the Judicial Interpretation (II) reads,
The people's court may construe the claims of the patent in dispute by referring to another patent that has a "divisional application" relation with the patent in dispute, the file wrappers of said another patent and any binding judgments/rulings in relation to its allowability or validity.
Said file wrappers include the written materials submitted by applicants or patentees during the process of patent examination, re-examination and invalidation, as well as office actions, meeting minutes, oral hearing records, binding patent re-examination decisions, patent invalidation decisions etc. issued by the patent administrative department of the State Council or the Patent Reexamination Board.
The Supreme Court extends the scope of the intrinsic evidence for construing a claim to cover the applications/
patents having "divisional application" relation with the patent in dispute, which might be a parent to divisional or vice versa or even a divisional to divisional relation, and the related materials of said another application or patent.
In Qiu Zeyou v. Luban Building Group, Qiu Zeyou, who is the owner of a patent for "Cast-in-situ Concrete Hollow Shuttering Member", asserted that the folding box manufactured by Luban Group read on claims 1 and 3 of the patent and fell within the protection scope of the patent. The Supreme Court rejected the assertion and held that, in determining the protection scope defined by a claim of a divisional application, the contents going beyond the parent application can not be a basis for construing the claim. In particular, the Court opined that,
The divisional application is a special type of application for a purpose of permitting the applicant to file a patent application for those inventions that have been disclosed in its parent application as filed on the filing date, but is not eligible for protection in the parent application due to unity, with the initial filing date acknowledged and maintained, so as to prevent the justifiable interests of the applicant from inappropriate damage. On the other hand, in order to keep a balance with the public
interests, it is mandatory that the divisional application may not extend beyond the content of its parent application as filed. In other words, it is not permitted to add any new matter that has not been recited in the parent application to the divisional application so as to refrain the applicant from preempting the prior filing date for the invention that is developed later than that filing date by means of the divisional application.
Therefore, the divisional application is restricted by the parent application documents. In this sense, the parent application may be regarded as the special prosecution documents of the divisional.
3. Defects in the claims or description
Article 4 of the Judicial Interpretation (II) reads,
In spite that the claims, description or its accompanied drawings are ambiguous to a person of ordinary skill in the art in terms of grammars, wordings, punctuations, graphics, symbols, etc., where said person of ordinary skill in the art can clearly arrive at only one unique understanding by reading the claims, description and drawings, the people's court shall make determination according to said unique understanding.
This article aims at preventing the patentee from extending or changing the initial meaning of a feature after grant of the patent in dispute so as to cover the accused technical solution and applies specifically when there is an inconsistency between the description and the claims.
In Xi'an Qinbang Telecommunication Material Co. Ltd. v. Wuxi Longsheng Cable Factory et al. regarding Qinbang's patent for a "production method of smooth type composite metallic shielding belt", in interpreting the feature "forming the surface of the plastic film into an uneven rough surface of 0.04 -0.09 mm thick" in claim 1 of the patent, the Supreme Court held that,
In determination of the protection scope of a claim... when a person of ordinary skill in the art can clearly identify the meaning of the related term in the claim and the description doesn't provide any special definition of the term, the understanding of a person of ordinary skill in the art on the term of the claim shall prevail rather than negating the definition of the claim by the disclosure of the description which leads to the result of modification of the claim essentially and making the patent infringement litigation procedure become an extra opportunity for the patentee to amend the claims. Otherwise, the notice function and delimitation function of a
claim as to the protection scope of a patent will be harmed and the patentee incorrectly extends the claim to cover those initially not within the protection scope. Of course, if a person of ordinary skill in the art can learn immediately, upon reading the description and its drawings, that certain term of the claim is obviously wrong and can come to the particular meanings of the term based on the description and its drawings clearly, directly and unambiguously, the patentee can correct the obvious error in the claim based on the description and its drawings.
Article 3 of the Judicial Interpretation (II) reads,
Where, as a result of obvious violation of paragraph 3 or paragraph 4 of Article 26 the Patent Law, the description cannot be used to explain the claims, which does not fall within the circumstances specified in Article 4 hereof and based on which a request is made for declaring the patent invalid, the people's court trying the patent infringement dispute shall in general rule to suspend the lawsuit; if the patent is not announced invalid within a reasonable period of time, the people's court may determine the protection scope according to the claims.
This article essentially tells that, the court trying a patent infringement dispute shall generally not examine the validity of a patent.
In BAI Wanqing v. Chengdu Hard-to-Find Goods Marketing & Service Center and Shanghai Tianxiang Industrial Co., Ltd. regarding a patent for utility model titled "antielectromagnetic pollution garment", at issue is how a person of ordinary skill in the art accurately understands the specific meaning of the technical feature "high magnetic permeability" recited in claim 1 with reference to the description in conjunction with the common knowledge and how to deal with the lawsuit where the claim is so obscure that its protection scope can not be defined definitely. The Supreme People's Court held that,
Accurately defining the protection scope of a patent is a prerequisite for determining whether the accused technical solution infringes. Where obvious flaws exist in the drafting of patent claims and, through a comprehensive consideration of the patent specification, the common knowledge in the art, and the relevant prior art, etc., the specific meaning of a technical term in the patent claims cannot be determined, and the protection scope of the patent right cannot be accurately determined accordingly, the accused technical solution cannot be compared to such a patent in a meaningful manner.
Therefore, for a patent with an obviously unclear protection scope, a ruling is not to be made that the accused technical solution infringes the patent.
The Court found that, based on the specification of the patent in dispute, it is difficult for a person of ordinary skill in the art to determine the specific meaning of the so-called "high magnetic permeability" in claim 1 of the patent, so that the protection scope of claim 1 can not be accurately determined. Thus, the accused infringing technical solution did not infringe the patent.
4. Implied process step sequence
Article 11 of the Judicial Interpretation (II) reads,
Where the sequence of technical steps is not specified in a process claim but a person of ordinary skill in the art can directly and clearly learn that such technical steps shall be exploited according to specific sequence upon reading the claims, description and drawings, the people's court shall decide that such sequence of steps is a limitation to the protection scope of the patent.
This article affirms that the implied sequence of process steps is binding and limits the protection scope of a claim.
In OBE - Werk Ohnmacht & Baumgartner GmbH & Co. KG v. Zhejiang Kanghua Glasses Co. Ltd., in response to OBE's assertion that claim 1 does not define the assembling steps of spring hinges and the description of the assembling steps of spring hinges in the description is irrelevant to the protection scope of claim 1, the Supreme Court opined that,
In asserting a patent for a process, the limitation function of the sequence of the steps shall not be excluded as the claim doesn't define it. Instead, the description and its drawings, the file wrappers, the whole technical solution and the logic relations among the respective steps defined by the claim shall all be considered from the viewpoint of a person of ordinary skill in the art, to determine whether or not the respective steps shall be implemented in a specific sequence. Where the steps of a process invention are sequenced, the sequence of the steps itself and the steps all shall limit the protection scope of the patent.
The Supreme Court found that the cutting step and the punching step may be exchanged. However, in actual processing, once the sequence of the two steps is defined, they can only be implemented alternatively. The four steps defined in the claim are limited to a specific sequence. The Court thereby denied the assertion of OBE.
5. Numerical features
Article 12 of the Judicial Interpretation (II) reads,
Where phrases such as "at least" or "not more than" are used in a claim to define numerical features, and a person of ordinary skill in the art can learn that the patented technical solution places special emphasis on the roles of such phrases to limit the respective technical features, upon reading the claims, description and drawings, the people's court shall not side with the right holder if the later alleges that the technical features different from the numerical features are equivalent features.
The Supreme Court intends to enhance the notice function of a claim by this article, which sets up an exception to application of the doctrine of equivalents to numeric values when they are further defined by phrases such as "at least", "not more than" and emphasis has been put on those phrases accompanying the numeric values from the disclosure of the application documents. The accused infringer may bear the burden of proof to demonstrate that such phrases do highlight their limitation on the numeric feature.
The above provision might introduce debate as to when "the patented technical solution places special emphasis on the roles of such phrases to limit the respective technical features". We can imagine two scenarios where the doctrine of equivalents might be prevented from application to a numeric value or the end points of a numeric range: 1) the applicant has argued the patentability of the claimed invention over the prior art by referring to a phrase such as "at least" or "not more than" which to some extent prompts the grant or validity of the patent; 2) the applicant consistently uses the phrase in combination with the claimed numeric feature through out the description and claims.
6. Exception to file wrapper estoppel
Article 13 of the Judicial Interpretation (II) reads,
Where the right holder proves that any amendments or statements made by the patent applicant or the patentee to limit the claims, description or drawings during the patent prosecution or patent invalidation proceedings are definitely denied, the people's court shall determine that said amendments or statements do not lead to waiver of a technical solution.
Generally speaking, any amendments or statements to the patent application documents might set a presumption of file wrapper estoppel. This article provides when an exception to the file wrapper estoppel can be applied, i.e. when any amendments or statements are officially denied by a binding decision of the SIPO, the Patent Reexamination Board or by a binding judgment or decision of a court, said amendments or statements will not cause file wrapper estoppel. This certainly alleviates the burden of proof on the right holder when asserting a patent against an infringer. In the meantime, the burden of proof for the amendments or statements being denied is still on the right holder.
7. Close-ended claim
Article 7 of the Judicial Interpretation (II) reads,
As regards a close-ended claim for a composition, if an accused technical solution contains technical features in addition to all the technical features of the claim, the people's court shall determine that the accused technical solution does not fall within the protection scope of the patent, except that the additional technical features are unavoidable impurities in normal quantity.
Said close-ended claim for a composition referred to in the preceding paragraph shall generally not include the claim of a traditional Chinese medicine composition.
In Hebei Xinyu Welding Industry Co., Ltd. v. Yichang Houwang Welding Wire Co., Ltd., Xinyu is the exclusive licensee of the patent titled "gas shielded arc welding wire for high-tensile structural steel", of which claim 1 defines "a gas shielded arc welding wire for high strength structural steel, characterized in that, it consists of, in weight%, ..., with the balance of iron and unavoidable impurities" (emphasis added). Besides all the components recited in said claim, the accused product also includes chromium, copper and nickel, among which, nickel is the component which is explicitly excluded by the description of the patent. The Supreme People's Court held that,
Close-ended claim is a special type of claim, which delimits the protection scope, by way of specified wording or expression, to cover only those technical features that are explicitly recited in the claim and their equivalents, while other components, structures or steps, are excluded. Hence, regarding a closeended claim, the accused product shall not be determined as falling within its protection scope, in the case where the accused product contains further features in addition to those
explicitly recited in the claim. Otherwise, it might be the case that, during the proceedings in relation to allowance or invalidation of the patent, the right holder interprets the claims in a stricter way so as to circumvent the prior art and have the claims allowed; whereas, when enforcing the patent, the right holder construes the claims in a broader way so as to cover a greater scope, which will result in that the right holder benefits in both proceedings and also the inconsistency of law application.
In HU Xiaoquan v. Shanxi Zhendong Taisheng Pharmaceutical Co. Ltd and Shandong TLEYY Marketing Planning Co.Ltd. Pharmaceutical Branch, the Supreme Court also held that, with regard to a close-ended claim, generally, it shall be construed as not comprising components or process steps other than those recited in the claim, and with regard to a close-ended claim for a composition, it shall be construed as comprising no components other than those specified, but it may comprise impurities in normal quantity. Excipient does not belong to impurities.
Chinese traditional medicine is a very special drug and its components are very complicated and can not be determined concretely as a normal composition. So, the construction of a claim of a Chinese traditional medicine has to be dealt with specially.
8. Use environment features
Article 9 of the Judicial Interpretation (II) reads,
Where the accused technical solution can not be applied to the use environment defined by the use environment features of a claim, the people's court shall determine that the accused technical solution does not fall within the protection scope of the patent.
In Shimano Co., Ltd. v. Ningbo Richi Industry & Trade Co., Ltd., claim 1 of the patent calls for a bicycle rear derailleur bracket for connecting a rear derailleur to a bicycle frame, and includes two so called "use environment features", i.e. the features in a claim defining the background or conditions under which the invention is employed, 1) the structural features in relation to the bicycle bracket and 2) the structural features in relation to the rear derailleur. By reviewing the file wrapper of the patent, the Supreme People's Court found that, the claimed bicycle rear derailleur bracket must be used with the rear fork end of the bicycle frame and with the rear derailleur with the defined structural features.
With regard to the two use environment features, the Supreme People's Court held that,
Use environment features already recited in a claim are indispensable technical features of the claim and function to limit the protection scope of the claim... generally, use environment features in a claim should be interpreted as that the claimed subject may be used in the environment rather than must be used in the environment, but the use environment features should be interpreted as that the claimed subject must be used in the environment if a person of ordinary skill in the art can be explicitly and reasonably informed that the claimed subject matter must be used in the environment after reading the patent claims, the description and the file wrapper.
In this case, although the two use environment features are said "must be used in the environment" features, the Court found that the accused infringing product is necessarily used in commerce with the bicycle bracket as defined in the asserted claim, and necessarily presents the same assembling position features as in the asserted claim after assembling, besides having the other features of the asserted claim. Accordingly, the Court held that the accused infringing product falls within the protection scope of the asserted claim and infringes the patent.
9. Product by process
Article 10 of the Judicial Interpretation (II) reads,
Where the manufacturing process of the accused product is neither identical with nor equivalent to the manufacturing process recited in a claim that includes said manufacturing process to define certain technical features of the relevant product, the people's court shall determine that the accused technical solution does not fall within the protection scope of the patent.
In Chengdu Youta Pharmaceutical Co. Ltd., v. Jiangsu Wangao Pharmaceutical Co. Ltd. and Sichuan Kelun Pharmaceutical Trading Co. Ltd., the Supreme Court held that,
Since the accused product lacks the technical feature of "over 200 mesh sieve" of the patent, and the feature of the accused product "cooking 3 times" is not equivalent to the technical feature "cooking 2 times" of the patent, the accused product doesn't fall within the protection scope of the patent. (cont'd).
FAQs about patent procurement and enforcement in China
By Bo Li and Guoxu Yang
In China, there are three kinds of patent: invention, utility model and design. Only invention patents are subject to substantive examination.
The requirements for patentability requirements are as follows.
All patent applications must first pass the patent eligibility bar:
An invention patent application must be directed to a new product or process of a technical nature.
A utility model application must be limited to a product's shape or structure (or a combination thereof).
A design application must be directed to a new aesthetic industrial design of a product's shape or pattern (or a combination thereof), or a pattern or shape combined with a colour.
Protection for a process or unknown type of material should be sought under an invention patent rather than a utility model.
`Practical utility' means that the invention or utility model can be made or used and can produce beneficial effects.
Disclosure and enablement requirements
The disclosure and enablement requirements require that an invention or utility model be described in a manner that is sufficiently clear and complete so as to enable an ordinary person in the art to carry it out.
The absolute novelty bar applies in China. This means that an invention or utility model must not be part of any prior art
in China or abroad, and must not have been described in any patent application previously filed in China (or Patent Cooperation Treaty (PCT) application valid in China).
`Inventiveness' implies that an invention or utility model must have prominent substantive features compared to the state of the art and must represent considerable progress. For a design patent, it must not be a prior design or conflict with any legal rights obtained by other parties before the filing date. Further, it must be significantly different from a prior design or a combination of prior design features.
For an invention or utility model, the claims must:
be supported by the description;
contain all essential technical features for solving the technical problem; and
be definite and concise.
What are the limits on patentability?
Some types of subject matter are legally excluded from patent protection, including:
inventions that are contrary to the laws of the state;
inventions that are contrary to social morality;
inventions that are detrimental to the public interest;
rules and methods for mental activities;
methods for the diagnosis or treatment of diseases;
plant varieties and animal breeds;
substances obtained by means of nuclear transformation; and
designs for two-dimensional printing goods comprising pattern, colour or a combination thereof, and which serve mainly as indicators.
Further, subject matter that is not reproducible, is contrary to natural law, is created by unique natural conditions or relates to a surgical method that is not intended for treatment purposes will be filtered out for lack of practical utility.
Can inventions covering software be patented?
Software, programs, instructions, data, signals, logic and media carrying instructions are not patentable subject matter. Nevertheless, inventions that are implemented wholly or partially through software or software-related inventions can be patentable if they are intended to solve a technical problem, use technical means representing laws of nature rather than manmade rules and achieve technical effects although hardware modifications or improvements are unnecessary. For example, inventions for use in controlling an industrial process or improving the performance or characteristics of a computer system are more likely to be allowed.
Attention should be paid to the product claim. The conventional method is to present a claim defining more than one functional component of the claimed product and, at the same time, provide a block diagram and detailed description showing the functions or actions of those components and indicate that each component may be implemented in hardware, software or a combination thereof. This approach may be unfavorable when it comes to litigation, because of the difficulty in identifying the counterparts of the software components in the accused product.
Since last year, examiners have become more friendly to claims seeking to protect apparatus comprising a memory in which computer-executable instructions are stored and a processor configured to perform one or more actions upon the execution of the instructions. Such a form of claims used to be objected to by examiners on the ground that it is unclear or it lacks support from the description, but now it is a trend that examiners take an opener attitude towards such a form of drafting, and a decreased number of objections directed to the form of drafting has been observed.
Can inventions covering business methods be patented?
Inventions covering business methods are not legally excluded from patentable subject matter. Nonetheless, they must have a technical nature (i.e, advancing the prior art in terms of the structure, performance or characteristics of a computer or network). The simple computerization of business methods or a simple improvement to a method of doing business is patentable. Examiners tend to review this type of invention for inventiveness rather than patent eligibility.
Does your jurisdiction have a grace period? If so, how does it work?
Yes. An invention is not anticipated by:
disclosure of the invention in the six months preceding the filing or priority date by anyone without the applicant's consent;
disclosure of the invention in the six months preceding the filing or priority date at an academic or technological meeting organized by a competent department of the Chinese State Council or a Chinese academic or technological association, provided that the applicant makes a declaration concerning publication and provides a certificate issued by the meeting within two months of filing the application; or
disclosure of the invention in the six months preceding the filing or priority date at an international exhibition recognised by China, provided that the applicant makes a declaration concerning the publication and provides a certificate issued by the exhibition within two months of filing the application.
Are there any other ways to challenge a patent outside the courts?
A third party may submit evidence and observations to the Patent Examination Division for consideration before an application is granted or may initiate invalidation proceedings with the Patent Re-examination Board at any time after grant. The submission of third-party observations is an ex parte procedure and no response will be received from the Examination Divisions. In contrast, invalidation proceedings involve inter partes review of the granted patent.
How can a patent office decision be appealed in your jurisdiction?
If a patent applicant is rejected, the applicant can ask the Patent Re-examination Board to overrule the rejection decision. Further, as stated above, in order to challenge a patent, the petitioner must initiate invalidation proceedings with the board. If the applicant or petitioner is not satisfied with the board's decision, it can appeal to the IP Court in Beijing and then to the Beijing High Court to review the firstinstance judgment. The second-instance decision is final, although a retrial before the Supreme Court is available.
How long should an applicant expect to wait before being granted a patent and what level of cost should it budget for?
On average, it takes 22 months from the start of the substantive examination for an invention patent application to be granted. Thus, the applicant may expect to obtain an invention patent approximately three years after filing if the request for substantive examination is filed in a timely manner. It may take approximately four months and three months from filing for grant of a utility model application and a design application, respectively.
In term of cost, if an invention patent application is around 5,000 words long in English, the total cost will be around $6,000 from filing to grant, including official and attorneys' fees. A utility model or design application will cost between $1,000 and $1,500.
What are the most effective ways for a patent owner to enforce its rights in your jurisdiction?
A court action is the most effective way for a patent owner to enforce its rights. By filing suit before the relevant court, the patent owner may obtain the remedies of preliminary injunction, permanent injunction and damages. Further, an administrative action is available, as the administrative
authority for patent affairs may also handle a patent infringement dispute. The patent owner may obtain a permanent injunction through the administrative authority, but it cannot award damages. However, at the parties' request, it may mediate in regard to the compensation due.
What are the stages in the litigation process leading up to a full trial?
Once the patent owner has filed a suit, the defendant has 15 days to respond or 30 days if it is a foreign party. The parties then may be given 30 days to file evidence and a court hearing follows. After the court hearing, the court issues its decision. The first-instance decision may be appealed to a higher court, and the second-instance decision is final.
What scope is there for forum shopping?
There are more than 80 intermediate people's courts and three IP courts with the power to handle patent infringement cases. Jurisdiction is typically determined by two factors:
the location of the defendant; and
the place where the infringing activity took place.
As a strategy, the plaintiff may select a court away from where the defendant is located to avoid any influence by the defendant.
How easy is it for defendants to delay proceedings and how can plaintiffs prevent them from doing so?
A defendant may delay proceedings for one to two months by filing a jurisdiction opposition petition. The plaintiff can do nothing to prevent this filing. The defendant may also request the court to stay the proceedings by filing an invalidation petition with the Patent Re-examination Board within the response term of a lawsuit. The court will generally stay the proceedings in cases involving a utility model or design patent. The plaintiff may provide evidence to the court to prove the validity of the patent at issue.
What level of expertise can a patent owner expect from the courts?
The courts in larger cities have more experience of patent cases. In Beijing, Shanghai and Guangzhou, patent-related cases are tried by IP courts. The judges in those courts usually have a high level of expertise.
Are cases decided by one judge, a panel of judges or a jury?
Patent cases are usually decided by a panel of three judges, although a panel of five judges may sit in important cases. There is no jury system in China.
What role do expert witnesses play in the proceedings?
An expert witness may provide an affidavit to the court as evidence of the parties. The expert must be present in court to undergo cross-examination in order for his or her evidence to be considered by the court, unless there are extenuating circumstances. In some cases the court may request the parties to call certain experts to explain the technology at issue.
Does your jurisdiction apply the doctrine of equivalents and if so, how?
China applies the doctrine of equivalents. If a feature is not the same as a feature in the patented invention, but is implemented in substantially the same way and realises substantially the same function and effect, without requiring creative labour from a person skilled in the art, the feature will be regarded as an equivalent feature.
Are preliminary injunctions available? If so, under what circumstances?
It is possible to obtain a preliminary injunction if:
it is highly likely that the act being conducted or to be conducted will infringe IP rights;
such act will likely cause irreparable harm to the petitioner's legitimate rights;
the petitioner has paid the necessary deposit; and
the grant of a provisional or preliminary injunction will not harm the public interest.
How are issues around infringement and validity treated in your jurisdiction?
Infringement issues are handled by the courts and validity issues are handled by the Patent Re-examination Board. A patent is presumed valid unless it is pronounced invalid by the board. The board's decision as to whether a patent is valid may be appealed to the Beijing IP Court, whose decision may in turn be appealed to the Beijing High Court.
The decision of the Beijing High Court is final.
What are the typical remedies granted to a successful plaintiff?
In China, the court may grant a preliminary injunction, a permanent injunction and damages to the successful plaintiff.
How are damages awards calculated? Are punitive damages available?
A damages award may be calculated based on:
the profits lost by the patentee due to the infringement;
the illegal profits made by the infringer due to the infringement; or
multiples of the licence fee for the patent.
If the damages cannot be calculated easily, the court may award statutory damages of up to Rmb 1 million ($147,000). At present, punitive damages are not available.
How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?
In most cases the courts will grant permanent injunctions to successful plaintiffs. The court will grant a permanent injunction if:
the plaintiff so requests;
the court finds that infringement has occurred; and
the grant of a permanent injunction will not affect the public interest.
How long does it take to obtain a decision at first instance and can this process be expedited?
It takes six to nine months to obtain a decision at first instance if the parties are all Chinese companies or individuals. It is not possible to expedite this process.
Under what circumstances will the losing party at first instance be granted the right to appeal? How long does an appeal typically take?
The losing party in a first-instance case is always entitled to appeal. An appeal typically takes three to six months.
China focus: a match not made in heaven
By Yuncheng Li
"Fei cheng wu rao", which means "Do not disturb if you're not sincere", is a phrase often used in matrimonial advertisements in newspapers. It was the name of a Chinese TV dating show produced by and aired on Jiangsu Television, a high-profile state-owned network. It was first broadcast in January 2010 and began airing on Saturday and Sunday nights in China.
The programme is arguably one of the most successful game shows in China and undoubtedly the most popular and highly rated TV dating show there. Episodes are also distributed online and viewed internationally over the internet and satellite television. The show's popularity and social commentary have drawn the attention of academics and foreign media. It has enjoyed great popularity thanks to its unique approach to dating and conversations that are often humorous and self-aware. The show is famous for seeking to `stretch the limits' of what can be discussed on Chinese television.
On February 16, 2009, an individual called Jin Ahuan filed a trademark application in China for ` ' (`Fei Cheng Wu Rao') in class 45 for dating services and marriage agencies. The application was approved for registration on September 7, 2010 under registration no. 7199523. Ahuan then started a marriage agency business under the trademark name. In the same year, the defendant's TV show was first broadcast.
In 2013, Ahuan sued Jiangsu for trademark infringement at the Court of Nanshan District, Shenzhen (first instance court). The court held that Jiangsu used `Fei Cheng Wu Rao' on the dating show to distinguish the programme from those of others and that the name was identical to the trademark registered by Ahuan.
However, the court held that Fei Cheng Wu Rao was a TV show which was different from the dating and marriage agency services covered by the registered trademark.
Therefore, the court said, the use of the name did not constitute trademark infringement.
The plaintiff then appealed to the Shenzhen Intermediate Court against the first instance court's verdict. The second instance court upheld the appeal, ordering Jiangsu to immediately stop using the trademark `Fei Cheng Wu Rao' on its dating TV show.
This lawsuit has drawn widespread attention not only among IP professionals but also the public in China. First, it is widely recognised in the practice of trademark lawsuits that the international classification of goods and services is instrumental in the filing and examination of trademark applications, but that it is only for reference when deciding whether goods/services are identical or similar regarding actual use of a trademark.
According to the Shenzhen Intermediate Court, the TV show Fei Cheng Wu Rao's goal, content, approach and customers concerned a dating, marriage or matchmaking service. Therefore, the TV show's name was identical to the dating services and marriage agencies registered under Ahuan's trademark `Fei Cheng Wu Rao'.
The Shenzhen Intermediate Court also found that Ahuan's trademark had been used after registration and that the TV show had significantly affected the use of the trademark registration by the plaintiff. It held that the use of the mark by Jiangsu was a commercial use for profit because Jiangsu made huge profits by selling sponsorship, advertisements and SMS voting. The court held that the popularity and extensive promotion of the TV show had caused reverse confusion, which means the public would see Jiangsu, not Ahuan, as the true owner of the brand name Fei Cheng Wu Rao.
In this case, the Jiangsu TV dating show had such powerful market influence that the plaintiff was substantively deprived of his right to market his own Fei Cheng Wu Rao brand name. In other words, the plaintiff's dating and/or marriage agency service under this name was taken by the public as being fake, infringing or counterfeit compared to the defendant's TV dating show.
Ahuan did not make a claim for compensation in the course of proceedings. He merely asked the defendant to stop the infringement. This fact certainly created favorable conditions for winning the suit.
The other reason why this lawsuit has drawn widespread
attention among the public in China is that if Jiangsu
changed the name of the TV show or ceased using it, the
company would suffer a big loss. Despite this, the TV
show's name was changed to
Fei Cheng Wu Rao, which has no specific meaning in this
combination). The execution of the court ruling by Jiangsu,
a state-owned, high-profile media company, embodies the
spirit of the rule of law.
Once again, this lawsuit has brought up the doctrine of reverse confusion in trademark practice in China. Unlike typical infringement of trademark rights where the infringer is normally less well-known or powerful than the trademark owner, reverse confusion generally occurs when the infringer has much stronger market influence than the trademark owner.
Average consumers/the public are not likely to believe the goods or services provided by the infringer originate from the registered trademark owner. Instead, the public are very likely to believe that the use of the mark by the registered trademark owner is either illegal/unauthorized or licensed/ authorised by the infringer. Reverse confusion prevents the weaker brand owner from expanding its brand influence and reputation.
Case guidance system and stare decisis principle in IP cases
By Gang Hu and Xiaomeng Dong
In April of 2015, the Supreme People's Court set up the Research Center (Beijing) on Case Guidance System in Intellectual Property Cases in the Beijing Intellectual Property Court, to explore the establishment of a case guidance system with Chinese characteristics relating to intellectual property cases. The legal sector has been calling for many years for a case guidance system and the stare decisis principle, or doctrine of precedent, to be introduced. The case guidance system and the stare decisis principle will fundamentally influence the trial of intellectual property cases and intellectual property practitioners need to be aware of the ramifications.
The case guidance system began with the `Provisions of the Supreme People's Court on Case Guidance' issued in November of 2010. On June 2, 2015, the Supreme People's Court issued `Regulations for the Implementation of the Provisions of the Supreme People's Court on Case Guidance'.
Related contents of the case guidance system include: guiding cases issued by the Supreme People's Court shall be referred to by people's courts at different levels when making judgments in similar cases. When referring to them, the guiding cases shall be cited as adjudication reasons, but shall not be used as the adjudication basis.
From 2012 to now, the Supreme People's Court has issued in 12 batches 60 guiding cases including 10 guiding cases for intellectual property. These 10 intellectual property guiding cases are virtually binding on courts at different levels all over the country in ruling in similar cases. In fact, these 10 guiding cases are inadequate in number to meet the actual demands in ruling on those various intellectual property cases that are developing continuously.
To improve the quality and effectiveness of rulings, and to solve the problem of inconsistency among lawsuit,
examination and judgment, the Beijing Intellectual Property Court has been intensively exploring the `Consistence Criterion among Lawsuit, Examination and Judgment'. One of the six principles of this consistence criterion is the stare decisis principle.
Related contents of stare decisis principle include: the adjudicate documents that have become effective are the precedents that shall be followed and shall be binding virtually on Beijing Intellectual Property Court and the lowerlevel courts within its jurisdiction.
At the China Intellectual Property Forum held on September 19, 2015, President of Beijing Intellectual Property Court, Chi Su, pointed out that lawyers were welcomed to provide precedents as references for judges. In 2015, one of the innovative measures taken by the Beijing Intellectual Court in hearing cases was the citing of precedent cases as statement reasons for adjudication. In this case, Beijing Intellectual Property Court, citing the understanding of "literal interpretation" in Supreme Court Mintizi (2009) No.
20 --- A Dispute of Invention Patent Infringement, pointing out that in respect of scope of protection of patent right, the supreme court's identifications in civil proceedings and definition on close-ended or open-ended claim in administrative proceedings are still referable. Therefore, Beijing Intellectual Property Court was innovative with applying the reasonings in the Supreme Court's civil proceedings to administrative proceedings. Furthermore, in this case, the identification conclusion in the Beijing Higher People's Court Zhongzi (2011) No.607on administrative dispute over the invalidity of invention patent right were also referred to, which identified that interpretation function of instruction manuals can be used in determining whether the disputed claim is open-ended or close-ended.
In China, case guidance system and stare decisis principle are both on the premise of statutory law, the function of which is to correctly interpret and apply the law. Therefore, as systems of law application they have great significance.
Uniformity in the application of law is an indispensable part of the judicial judgment in China. In judicial practice, however, there exist differences in its application and "similar cases different judgments", which gives rise to the public questioning the credibility of the judicial system. In intellectual property cases, the case guidance system and stare decisis principle are basic methods to solve the problem of "similar cases different judgments".
Under the situation of complexity, unexpectedness and volatility of intellectual property disputes in the era of transformation, the hysteresis of statutory law appears especially prominent. Case guidance system and stare decisis principle are effective means to solve the hysteresis issue of statutory law.
If the case guidance system is adopted, each court will be able to handle similar cases much better. It may well follow a simplified procedure and take the principle of "like case, like treatment", which doubtlessly will save judicial resources and raise the efficiency in making judgments.
Case guidance system and stare decisis principle is an important judicial reform for the intellectual property practitioners. Currently, the following issues existing in case guidance system and stare decisis principle require of further research and exploration:
Intellectual property attorneys cannot raise many guiding and precedent cases because Chinese lawyers are used to statutory law and lack of thinking by case and are not good at treating current cases in combination with precedents.
The critical issue in implementing case guidance system and stare decisis principle lies in the judgment on "same case or similar case". It requires the judicial and legal sectors to undertake further discussion and research as to how to understand "same case or similar case".
Currently, it is only the Beijing Intellectual Property Court which has expressly raised and has been exploring the stare decisis principle. Whether stare decisis is adopted by intellectual property courts of higher levels (for example, the intellectual property appeal court that may be established) is now highly anticipated.
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