In the latest issue of the Intellectual Property Cases Annual Report (2018) by Supreme People's Court (“SPC”), the case between Qualcomm and Apple, represented by the author, was selected as one of the representative cases. SPC used this case to give guidance to the review criteria for jurisdictional dispute involving joint infringement. In short, SPC concludes that at the stage of jurisdictional objection, in principle it is only necessary to hear the facts related to the establishment of the jurisdiction of the case. If the facts related to the establishment of the jurisdiction connection involve the substantive dispute of the case, it is only necessary to examine whether the prima facie evidence of the case can prove the existence of an arguable jurisdiction connection, while with substantive dispute untouched.

The specific facts and main points of the decision are as follows:

In Nov. 2017, Qualcomm filed three patent infringement cases respectively against three subsidiaries of Apple Inc., i.e.  Apple Electronics Trading (Beijing) Co., Ltd. (hereinafter referred to as Apple Beijing), Apple Computer Trading (Shanghai) Co., Ltd. (hereinafter referred to as Apple Computer), and Apple Trading (Shanghai) Co., Ltd. (hereinafter referred to as Apple Shanghai) (unless otherwise stated, the three defendants are collectively referred to as "Apple" in the following). Apple filed an appeal with SPC after Beijing High people’s Court rejected its jurisdiction objection in the first instance.

The evidence provided by Qualcomm shows:

First, Apple Computer is the general distributor of the alleged infringing products and is responsible for importing the alleged infringing products. The alleged infringing products sold by Apple Beijing and Apple Shanghai are all from Apple Computer. Apple Beijing and Apple Shanghai have a clear division of labor regarding the regions where the alleged infringing products are sold. Apple Shanghai is responsible for operating Apple stores in Shanghai, Jiangsu and Zhejiang. Apple Beijing is responsible for operating Apple stores in other regions in China.

Second, the UnionPay merchant numbers recorded on the receipts issued by the two companies for purchases of the alleged infringing products were the same.

Third, Apple Beijing is the ICP filing body of www.apple.com/cn/. The website is the official website of Apple China, which sells and offers to sell alleged infringing products online and provides technical support information. The site also lists the names, addresses and contact details of Apple stores in China, including information about the Apple Stores that Apple Shanghai is responsible for.

Fourth, the senior executives of the three defendants is highly coincident.

Apple’s grounds of jurisdictional objections and appeals are:

In this case, the alleged infringement acts are independent and shall not be tried together if the defendants explicitly object to a joint trial. The case includes three independent alleged infringement acts:

Act 1: Apple Beijing and Apple Computer sell the products in Beijing.

Act 2: Apple Shanghai and Apple Computer sell the products in Shanghai.

Act 3: Apple Beijing and Apple Computer offer to sell the products through Apple's official website.

Beijing High People’s Court has no jurisdiction over the alleged infringement Act 2, and Apple Shanghai, which only implements the alleged infringement Act 2, is not a joint infringer of the alleged infringement act 1 and the alleged infringement act 3, and the allegation against Apple Shanghai should be dismissed or tried separately.

After the trial, SPC held that firstly it is necessary to determine the legal standards for jurisdiction review. The jurisdiction dispute is for determining whether a court has jurisdiction over the case, and substantively review of the case has not started. Therefore, at the jurisdictional objection stage, in principle it is only necessary to hear the facts related to the establishment of the jurisdiction of the case. If the facts related to the establishment of the jurisdiction connection involve the substantive dispute of the case, it is only necessary to examine whether the prima facie evidence of the case can prove the existence of an arguable jurisdiction connection, while with substantive dispute untouched. In this case, it is only necessary to examine whether the prima facie evidence provided by Qualcomm is enough to prove an arguable joint infringement act by the three defendants. Whether or not a joint infringement can be determined  should be left to the substantive case review stage.

The evidence provided by Qualcomm can preliminarily prove that Apple Beijing, Apple Computer and Apple Shanghai have corresponding division of responsibilities for importing, selling, and offering to sell the alleged infringing products. Apple Computer is the importer and general distributor of the alleged infringing products. Apple Beijing and Apple Shanghai received the money into the same account for sale of the alleged infringing products. The three defendants shared the same official website and their senior executives overlap heavily. It can be seen that the existing evidence in this case can preliminarily prove that the three defendants have the possibility of conducting a joint infringement, that is, the prima facie evidence provided by Qualcomm is enough to prove an arguable joint infringement act by the three defendants, while whether it is a real joint infringement shall be subject to determination during the substantive case review stage.

In summary, since Apple Beijing is domiciled in Beijing,  Beijing High People’s Court has the jurisdiction over the case in considering the relevance of the three defendants' alleged infringement acts.