In the course of adjudicating two related patent ownership disputes, the Supreme People’s Court (“SPC”) discovered that the parties were suspected of conducting sham litigation in a separate case. The SPC therefore, ex officio, initiated adjudicative supervision proceedings and directly retried a copyright infringement case that had already taken legal effect. Upon retrial, the SPC determined that the copyright case constituted false litigation initiated by the parties through malicious collusion and fabrication of infringement facts, and that the parties had sought to intervene in the patent ownership litigation by relying on the effective judgment in the copyright case, with the intent to misappropriate another party’s patent rights, thereby seriously undermining judicial order. The SPC rendered a judgment revoking the first-instance copyright infringement judgment, imposed the maximum statutory fine of RMB 100,000 on each of the two individual parties, and transferred suspected criminal clues to the public security authorities. Both individuals have paid the fines, and the public security authorities have formally initiated criminal investigation proceedings.
In the case, a company in Dongguan asserted that five patents applied for by its former employee, Yan Mou, within one year after his departure constituted service inventions. After the initiation of that lawsuit, He Mouyao separately filed a copyright infringement action, claiming to be the copyright owner of the technical drawings involved, and obtained a first-instance judgment in his favor. He then joined the patent ownership litigation as a third party, asserting that the patent rights should belong to him.
Upon retrial, the SPC determined that the copyright infringement case constituted false litigation, for the following reasons:
First, He Mouyao and Yan Mou possessed the foundational conditions for malicious collusion. The two maintained a close relationship and had clear conflicts of interest: they had long been acquainted, had jointly established a company, and had engaged in equity transfers. While a copyright dispute was still pending, Yan Mou and his wife transferred their equity interests in the company to He Mouyao, and thereafter Yan Mou continued to work at a company solely owned by He. Such conduct was manifestly abnormal and provided a realistic basis for malicious collusion.
Second, He Mouyao and Yan Mou fabricated facts and engaged in malicious collusive litigation conduct. He Mouyao was unable to prove that he was the copyright owner of the technical drawings at issue, yet he fabricated his status as right holder and the underlying infringement facts in filing the lawsuit. The filing of the copyright action closely followed the initiation of the patent ownership litigation, and was deliberately brought before a different court. Yan Mou failed to present substantive defenses in the litigation, cooperated with the litigation process, and jointly concealed the existence of related cases with He Mouyao. After the first-instance judgment took effect, the compensation obligation remained unperformed for an extended period, and the parties continued to work together, which was clearly abnormal and reflected their mutual coordination and malicious litigation intent.
Third, the true purpose of the copyright infringement action was to misappropriate the patent rights. The genuine objective of He Mouyao and Yan Mou in initiating the copyright lawsuit was to influence the adjudication outcome of the patent ownership dispute. Yan Mou possessed the relevant research and development capabilities, and the patents at issue should have been characterized as service inventions belonging to his former employer. By contrast, He Mouyao lacked corresponding technical research and development capacity and could not reasonably be recognized as the rightful owner. Despite knowing that the patents should belong to his former employer, Yan Mou colluded with He to obtain a false effective judgment to counter the patent ownership claims, with the ultimate intention of misappropriating patent rights that rightfully belonged to the Dongguan company.
The Court pointed out that false litigation typically manifests as malicious collusion, fabrication of facts, and initiation of litigation with the purpose of infringing upon national interests, public interests, or the lawful rights and interests of others. In such circumstances, the People’s Courts may impose fines or detention in accordance with law, and where a crime is constituted, criminal liability shall be pursued. In this case, the imposition of severe penalties and the transfer of criminal clues to the public security authorities effectively deterred false litigation conduct and demonstrated the People’s Courts’ firm stance in strictly combating false litigation and safeguarding judicial authority and social integrity.
Comment:
This case was designated as an “Exemplary Case” by the Intellectual Property Tribunal of the Supreme People’s Court, not merely because of the complexity of the facts and the intersection between patent rights and copyright issues, but more importantly because of the high level of judicial reasoning and institutional value orientation reflected in its handling of effective judgments and false litigation.
In addressing the case, the SPC did not passively rely on the already effective copyright infringement judgment. Instead, in the course of adjudicating the related patent ownership dispute, it keenly identified clues of false litigation and, in accordance with law and ex officio authority, initiated adjudicative supervision proceedings to directly retry and correct the effective judgment. This approach breaks from the conventional inertia of centering solely on res judicata effect and formal stability of judgments, and reflects the highest judicial authority’s strong commitment to substantive justice and judicial order.
In current judicial practice, passive reliance on effective judgments in related cases objectively persists. Once a prior judgment has taken legal effect, subsequent cases often tend to accept it as an established fact without closely scrutinizing whether its formation process was genuine or whether malicious collusion or procedural abuse existed. In this case, the parties attempted to rely on an effective judgment obtained through false litigation to counter the true right holder’s claim to patent ownership. The SPC did not confine itself to the formal validity of the judgment, but instead conducted a penetrating review to comprehensively negate the legitimacy of the false judgment, thereby effectively blocking the pathway of “laundering rights through judgments” via false litigation.
At the same time, while correcting the erroneous judgment, the SPC revoked the original decision in accordance with law, imposed maximum fines on the parties, and transferred suspected criminal clues, thereby forming a coordinated enforcement mechanism combining adjudicative supervision, judicial sanctions, and criminal accountability. This clearly signals that effective judgments are by no means a “safe harbor” for false litigation. Such handling not only safeguards judicial authority, but also provides clear and replicable adjudicative guidance for lower courts when confronted with similar issues.
It is in this sense that the case was designated as an “Exemplary Case.” Its value lies not only in achieving justice in the individual matter, but also in its demonstrative and guiding significance for judicial practice: by proactively correcting errors and breaking path dependence on effective judgments, it effectively curbs false litigation and promotes the principle of good-faith litigation. The case fully demonstrates the SPC’s high-level judicial capacity to balance adjudicative stability with substantive justice in complex intellectual property disputes, and manifests institutional confidence in upholding the dignity of the law through judicial authority.
