On March 30, 2023, the Supreme People’s Court on its official website issued the “Typical Cases Heard by the Intellectual Property Court of the Supreme People’s Court (or SPC-IPC) (in 2022)”, which include 20 cases selected from 3,468 technology-related IP lawsuits and monopoly disputes closed in 2022. In this article, our efforts are focused on 7 patent civil disputes:
List of the cases
- China’s first drug patent linkage lawsuit;
- Two cases involving infringement of invention patent and technical secrets on “melamine”;
- A case involving infringement of standard-essential patent on “expansion joint”;
- A case involving infringement of utility model patent on “dynamic password USB connector”;
- A case involving infringement of utility model patent on “bonding and fastening type anchor bolt”;
- Two cases concerning the ownership of the patent rights on “a dust-removing device or system for removing dust of gas from gasifiers”; and
- Two cases concerning the entitlement to file an application and claim the right for utility model/invention patents on “suture device and suture needle kit”.
1. China’s first drug patent linkage lawsuit [Chugai Pharmaceutical Co., Ltd. vs. Wenzhou Haihe Pharmaceutical Co., Ltd., a dispute in the determination as to whether the defendant’s generic drug falls into the protection scope of the plaintiff’s patent]
[Basic information of the case]:
Chugai Pharmaceutical Co., Ltd. (hereinafter referred to as “Chugai”) filed a lawsuit against Wenzhou Haihe Pharmaceutical Co., Ltd. (hereinafter referred to as “Haihe”) with the Beijing Intellectual Property Court according to the first paragraph of Article 76 of the Patent Law under the drug patent linkage framework, requesting to confirm that the technical solution of a generic drug named “Eldecalcitol soft capsule” applied by Haihe for registration falls within the protection scope of the relevant claims of the involved patent. The court of first instance made a ruling of dismissing the plaintiff’s claims. Chugai instituted an appeal as being not satisfied with the court’s ruling. The SPC-IPC (the court of second instance) held that: Haihe failed to make its statement with respect to the patent claim having the broadest protection scope, and it also failed to duly inform the Marketing Authorization Holder (MAH) of the patented drug “Eldecalcitol soft capsule” (i.e., Chugai) about the statement and the basis thereof; and such acts are inappropriate and should be criticized. In determining whether the technical solution of a generic drug falls within the protection scope of the relevant claims of a patent, it is required that in principle, comparison and evaluation should be conducted based on the information provided by the generic drug company as of the date when it submitted its application for marketing authorization. In this case, it was found after comparison that the technical solution of the generic drug does not fall within the protection scope of the patent. Thus, the SPC-IPC made a judgment of dismissing the plaintiff’s claims and upholding the original ruling.
[Typical points of significance]:
This case is the first pharmaceutical patent linkage lawsuit in China (where the patent linkage system is still in the exploratory stage since its establishment in 2020). The SPC-IPC in its judgment of this case has resolved the problems arising from the initial practice of the drug patent linkage system by exploratively applying the laws in alignment with the legislative purpose. It has attracted wide attention and praise from the national and international media and also in the pharmaceutical circle.
2. Two cases involving infringement of invention patent and technical secrets on “melamine” [Sichuan Golden-Elephant Sincerity Chemical Co., Ltd. and Beijing Yejing Technology Co., Ltd. vs. Shandong Hualu-Hengsheng Chemical Co., Ltd., Ningbo Houcheng Management Consulting Co., Ltd., Ningbo Antai Environmental Chemical Engineering Design Co., Ltd., and a person surnamed YIN, two cases of disputes over infringement of invention patent and technical secrets]
[Basic information of the case]:
The Sichuan Golden-Elephant Sincerity Chemical Co., Ltd. (hereinafter referred to as “Golden-Elephant”) and Beijing Yejing Technology Co., Ltd. (hereinafter referred to as “Yejing”) are the patentees of the invention patent No. 201110108644.9 entitled “System and process for melamine production by gas-phase quenching method of energy-efficient and cost-saving type”. Golden-Elephant is also the right holder of the technical secrets covering a process for producing melamine using a high-pressure gas-phase quenching method and a production system using such a process.
Golden-Elephant and Yejing filed a lawsuit with the Guangzhou Intellectual Property Court against the four defendants including Shandong Hualu-Hengsheng Chemical Co., Ltd. (hereinafter referred to as “Hualu-Hengsheng”) for their acts of infringing the involved patent. Also, Golden-Elephant filed a lawsuit with the Intermediate People’s Court of Chengdu City of Sichuan Province against the aforementioned four defendants for their acts of infringing the involved technical secrets. Both courts of first instance held that the four defendants have jointly committed the acts of infringing the involved patent and technical secrets, and each made a ruling of ordering them to stop the infringing acts and supporting part of the plaintiff’s claims for seeking damages. Both sides of the involved parties in each case were not satisfied and appealed. The SPC-IPC (court of second instance) held that: the accused infringers have communicated with one another on the infringing matters; it means that subjectively, they have knowingly and successively committed the infringing acts in an integrated chain, and objectively, they have collaborated with one another; and thus they are co-infringers who have intentionally committed the accused infringing acts and should jointly bear the liabilities for all the damages incurred upon the patent owners. Accordingly, the SPC-IPC decided to overturn the first-instance courts’ rulings, and made a judgment of supporting all the plaintiff’s claims, ordering the accused co-infringers to destroy the alleged production systems and the carriers of the technical secrets by the means including but not limited to disintegration, and also to jointly bear the liabilities of paying CNY218 million (including CNY120 million for infringement upon the invention patent, and CNY98 million for infringement upon the technical secrets) to remedy the financial losses incurred upon the right holders.
[Typical points of significance]:
This is currently the IP infringement case where the people’s court has awarded the highest amount of damages for an individual engineering project. Golden-Elephant (one of the right holders) is a Sino-foreign equity joint venture; Yejing (the other right holder) is a high-and-new-technology private firm; and Hualu-Hengsheng (one of the co-infringers) is a publicly-listed, state-owned enterprise. The judgment of the two cases has well demonstrated the SPC-IPC’s continued commitment to strengthen the judicial protection of IP rights, and also fully reflected its equal treatment and protection to the rights of Chinese rights-holders and foreign ones (either domestic or foreign-funded, either state-owned or private). It has provided valuable insights and reference for hearing similar cases in the future, particularly on how to identify co-infringers that intentionally committed the accused acts, on how to determine the joint liabilities, on the factors to be considered when calculating the amount of damages, and also on the means to be adopted for destroying the carriers to fulfill the obligations of stopping the infringing acts.
3. A case involving infringement of standard-essential patent on “expansion joint” [A person surnamed Xu and Ningbo Lubao Science & Technology Industry Group Co. Ltd. vs. HeBei YiDeLi Rubber Products Co., Ltd. and Hebei Jitong Road & Bridge Construct Co. Ltd., a dispute over infringement of an invention patent]
[Basic information of the case]:
The person surnamed XU (hereinafter referred to as “XU”) is the right holder of the invention patent No. 200410049491.5 entitled “A very large flexibility distortion resist and comb-type bridge expansion joint”, which is a standard-essential patent disclosed in the recommended industrial standard for “Unit sparse plate bridge expansion joint for multi-directional-displacement” by China’s Ministry of Transport. XU and Ningbo Lubao Science & Technology Industry Group Co. Ltd. (hereinafter referred to as “Lubao”), the exclusive licensee of the involved patent (with XU being its legal representative), believed that Hebei Jitong Road & Bridge Construct Co. Ltd. (hereinafter referred to as “Jitong”) used the expansion joint that had been manufactured according to the above-mentioned standard and sold by HeBei YiDeLi Rubber Products Co., Ltd. (hereinafter referred to as “YiDeLi”) in the Pingzan Expressway Project and infringed the involved patent, and thus filed a lawsuit with the Intermediate People’s Court of Shijiazhuang City of Hebei Province, requesting to order the defendants to stop the infringing acts and jointly pay CNY3 million in damages plus reasonable right-defending expenses. The court of first instance held that the defendants Yideli and Jitong have infringed the involved patent, and decided that they should pay CNY0.1 million for the financial losses plus reasonable expenses. XU and Lubao appealed as being not satisfied with the court’s ruling. The SPC-IPC (court of second instance) held that: as the involved patent is the standard-essential patent, its technical solutions, patent No., and contact information of the patentee have been clearly disclosed in the recommended industrial standard; moreover, Lubao had sent a written letter in 2016 to Yideli for its acts suspected of infringing the involved patent. Having known the existence the patent, Yideli still failed to proactively obtain a patent license and continued to exploit the patent without authorization. It means that subjectively, the defendants are obviously at fault. Thus, the SPC-IPC reversed the original ruling and ordered the defendants to pay the full amount of CNY3 million to the right-holders.
[Typical points of significance]:
In this case, after determining that the patentee of the standard-essential patent is not at fault while the patent exploiter is obviously at fault, the SPC-IPC (court of second instance) adjudicated to support the right holders’ claims for paying the full amount of damages. Clearly, the SPC-IPC has specified that: in determining the liabilities for paying the damages for infringing a standard-essential patent, it is essential to consider whether the involved party is at fault to manifest the judicial policy of protecting a bona fide person who performs the corresponding act.
4. A case involving infringement of utility model patent on “dynamic password USB connector” [Shenzhen Zudian Intelligent Technology Co., Ltd. vs. Shenzhen Senshuqiang Electronic Technology Co., Ltd. and others, a dispute over infringement of utility model patent]
[Basic information of the case]:
Shenzhen Zudian Intelligent Technology Co., Ltd. (hereinafter referred to as “Zudian”), which is the right holder of the utility model patent No. 201720131230.0 entitled “A dynamic password USB connector”, filed a lawsuit with the Intermediate People’s Court of Shenzhen City of Guangdong Province, alleging that Shenzhen Senshuqiang Electronic Technology Co., Ltd. (hereinafter referred to as “Senshuqiang”) and others have committed the infringing acts. The defendants contended that Zudian had filed the involved utility model patent and its interrelated utility model patent involving substantively the same technical solutions on the same day, while the interrelated utility model patent was declared to be invalid; accordingly, the involved patent should also be invalid. On this basis, the defendants requested the first-instance court to dismiss the plaintiff’s claims. The court of first instance held that the technical solutions of the two utility model patents are substantively the same, and the involved patent is obviously or very likely to be invalidated, and thus made a ruling of dismissing the plaintiff’s claims. The plaintiff Zudian appealed as being not satisfied with the court’s ruling. During the second-instance procedure, Senshuqiang filed a request for invalidating the involved patent. The SPC-IPC (the court of second instance) held that: where the stability of the involved patent is under skepticism or in dispute and it is expected that the subsequent hearing procedure may go in several possible routes, the people’s court may make an appropriate judgment at its own discretion. After clarifying their mutual needs, both sides of the involved parties voluntarily made their commitments to compensate the benefits in the future based on the stability outcome of the patent right. After comprehensively considering the basic facts of the case, the evidentiary documents on record and the commitments made by the involved parties, the SPC-IPC decided to revoke the first-instance court’s ruling and dismiss the lawsuit by following the hearing principle of “dismissing the lawsuit first (when a decision on the invalidation request has not been made yet) and allowing the right holder to file a lawsuit separately (when the validity of the patent right is maintained by the invalidation decision)”.
[Typical points of significance]:
In this case, when the involved patent is being challenged under the administrative invalidation procedure, the SPC-IPC has, for the first time, made attempts to guide both sides of the involved parties to voluntarily make their commitments to compensate the benefits in the future based on the possible results of the invalidation procedure. In this judgment, the SPC-IPC specified that in hearing a patent-infringing case, if the stability of the involved patent is under skepticism or in dispute, the people’s court may, following the principles of fairness and good faith, encourage and guide the involved parties to voluntarily make their commitments or statements to compensate the benefits in the future. This dispute-resolving approach has not only effectively accelerated the hearing procedure, but also properly balanced the substantive benefits of the involved parties.
5. A case involving infringement of utility model patent on “bonding and fastening type anchor bolt” [Fuzhou Baiyi Baili Automation Technology Co., Ltd. vs. Shanghai Diangua Construction Technology Co., Ltd., and a person surnamed ZHANG, a dispute over infringement of utility model patent]
[Basic information of the case]:
Fuzhou Baiyi Baili Automation Technology Co., Ltd. (hereinafter referred to as “Baiyi Baili”), which is the right holder of the utility model patent No. 201320534267.X entitled “Bonding and fastening type anchor bolt”, filed a lawsuit with the Shanghai Intellectual Property Court, alleging that Shanghai Diangua Construction Technology Co., Ltd. (hereinafter referred to as “Diangua”) and the person surnamed ZHANG (as its legal representative, hereinafter referred to as “ZHANG”) had infringed the involved patent and requesting the court to order the defendants to stop the infringing acts and jointly paying CNY2.5 million in damages plus the reasonable right-defending expenses. The court of first instance held that: although the alleged infringing technical solution falls within the protection scope of the involved patent, the defendants’ grounds of defence based on another conflicting/interfering application are acceptable. Thus, the first-instance court ruled to dismiss the plaintiff’s claims. Baiyi Baili appealed as being not satisfied with the court’s ruling. The SPC-IPC (the court of second instance) held that: the defendants’ grounds of defence based on the conflicting/interfering application are NOT acceptable; and it may be determined that Diangua (which had actually implemented the alleged technical solution) and ZHANG (who had provided the alleged technical solution) jointly committed the acts of infringing the involved patent. The plaintiff Baiyi Baili proposed that the damages should be calculated based on the business scale as advertised publicly by the defendants. Although the defendants in their grounds of defence contended that the business scale was inflated in advertising, they failed to provide any evidence showing their actual business scale of infringement. Thus, the SPC-IPC overturned the original ruling and decided to support the plaintiff’s claims for paying the full-amount damages of CNY2.5 million after comprehensively considering other factors on record and the business scale as advertised.
[Typical points of significance]:
In this case, the SPC-IPC has ascertained the scale or gravity of the infringing acts based on the advertisements publicized by the infringers, and then determined the amount of damages after taking that scale or gravity of infringement into account. This judgment has reflected that the people’s court is striving to strengthen protection of IP rights and adopt the judicial ideal of imposing greater punitive damages, thereby effectively guiding the market entities to follow the principle of good faith in their commercial activities. Besides, even if the patented products are small components sold at a very low price per unit, the patent covering such small products can also be awarded with greater amount of damages. Thus, the SPC-IPC has highlighted that any innovative breakthrough made by any person or entity should be respected by others.
6. Two cases concerning the ownership of the patent rights on “a dust-removing device or system for removing dust of gas from gasifiers” [Changzheng Engineering Co., Ltd., vs. Luxi Chemical Group Co., Ltd. and Liaocheng Luxi Chemical Engineering Design Co., Ltd., disputes over the ownership of two utility model patents]
[Basic information of the case]:
The involved patents are two utility model patents, i.e., a patent No. 201620067057.8 entitled “A system for removing dust from syngas”, and a patent No. 201720586771.2 entitled “A device for spraying the gas discharged from the outlet of a gasifier”. Changzheng Engineering Co., Ltd. (hereinafter referred to as “Changzheng”) alleged that Luxi Chemical Group Co., Ltd. (hereinafter referred to as “Luxi group”) and Liaocheng Luxi Chemical Engineering Design Co., Ltd. (hereinafter referred to as “Liaocheng Luxi”) had failed to fulfill their confidentiality obligations during the period of cooperation and filed the two involved patent applications using the technical confidential information that was previously provided by Changzheng. On this basis, Changzheng filed a lawsuit with the Intermediate People’s Court of Jinan City of Shandong Province, requesting the court to confirm that the two patents should be owned by the Changzheng. The court of first instance held that: the technical solutions of the involved patents are obtained by making improvements based on the plaintiff’s technical information, while the improvements do not enable substantive features. Accordingly, the first-instance court ruled that the two patents should be owned by Changzheng. The defendants Luxi group and Liaocheng Luxi were not satisfied with the ruling and instituted an appeal. The SPC-IPC (the court of second instance) held that: the defendants failed to prove that the improvements made based on the plaintiff’s confidential information could constitute inventive technical contributions enabling the invention-creation to possess a substantive feature. Therefore, the SPC-IPC decided to make a judgment of dismissing the appeal and upholding the original ruling.
[Typical points of significance]:
In this case, the SPC-IPC has specified the party who should bear the burden of proof in disputes over the ownership of a patent which is filed for protecting a technical solution obtained by making improvements based on the confidential information provided by another entity, and also reasonably defined the foundation on which the party as the technical-information-source provider and the party who makes technical improvements could claim the entitlement to the corresponding right, with a view to preventing any entity who does not make any substantive technical contribution from misappropriating the confidential information provided by another entity by filing an application to protect that information, and also protecting the lawful rights and interests of the technical-information- source provider.
7. Two cases concerning the entitlement to file an application and claim the right for utility model/invention patents on “suture device and suture needle kit” [Zhejiang Zuoyuan Medical Technology Co., Ltd. vs. A person surnamed WAN, two disputes over the entitlement to file an application for a patent and claim the corresponding right]
[Basic information of the case]:
The person surnamed WAN (hereinafter referred to as “WAN”) is the patentee of the utility model patent No. 202020661599.4 entitled “A suture device and a suture needle kit”, and also the applicant of the invention patent application with an assigned Application No. 202010343019.1 and entitled “A suture device, a treatment apparatus comprising the suture device and a treatment system comprising the treatment apparatus”. Zhejiang Zuoyuan Medical Technology Co., Ltd. (hereinafter referred to as “Zuoyuan”) alleged that: WAN had served a position as its legal representative before his resignation; since the two invention-creations completed by the defendant during his employment belong to service inventions, Zuoyuan could claim the entitlement to the corresponding right. On this basis, Zuoyuan filed a lawsuit with the Intermediate People’s Court of Hangzhou City of Zhejiang Province. The court of first instance ruled to dismiss the plaintiff’s claims on the grounds of insufficient evidence. Zuoyuan appealed as being not satisfied with the court’s ruling. In the second-instance procedure, the SPC-IPC resolved all of the interrelated disputes between the two parties after identifying their long-standing grudges and clarifying or prioritizing their core needs with greater patience, thus fostering a favorable environment for their win-win cooperation.
[Typical points of significance]:
By successfully settling the two disputes, the SPC-IPC has solved the conflicts or controversies between the two parties that have persisted over several years. This dispute-resolving approach has fully demonstrated China’s traditional culture values that advocate harmony, mutual benefit and win-win development, and manifested the court’s continued efforts to reduce the burdensome litigation costs borne by the involved parties and also its judicial attitude of offering workable solutions to disputes.
