In response to the growing difficulties and challenges of the international financial crisis, the Supreme People’s Court (SPC) of the PRC issued the Opinions on Several Issues Concerning the Trial of Intellectual Property Cases to Serve the General Interest under the Current Economic Situation, on April 21, 2009. The Opinions provide further guidance for intellectual property trials consistent with the framework of the SPC’s Opinions on Several Issues Concerning the Implementation of the National Intellectual Property Strategy, issued on March 30, 2009) and the National Intellectual Property Strategy Outlines, issued on June 5, 2008).
The Opinions emphasize the importance of intellectual property (IP) rights in promoting economic growth and encourage the development of proprietary innovations. Additionally, the Opinions urge China’s judicial bodies to pay heed to the new needs brought by changing domestic and international economic conditions while strengthening judicial protection of IP rights. The main focus of the Opinions is three-fold: patent adjudication, trademark protection, and improvement of the IP litigation system.
According to the Opinions, the scope of an invention or utility model patent should be determined in a manner that ensures not only the protection of the patentee’s rights, but also the stability of the law. All technical features included in the independent claims are subject to infringement comparison. In addition, the doctrine of equivalents and prosecution history estoppel should be applied to prevent inappropriate broadening of the patent scope. The doctrine of equivalents allows a court to hold a party liable for patent infringement even though the infringing device or process does not fall within the literal scope of a patent claim, but nevertheless is equivalent to the claimed invention. Under prosecution history estoppel, a person who files a patent application and then subsequently amends the application to comply with the patent law has no cause of action for infringement to the pre-amendment patent claims.
More detailed guidelines with respect to trademark protection are set out in the Opinions. In brief, the Opinions provide that famous brands and well-known trademarks should be appreciated and protected for their competitive advantages and leading roles in the market. Moreover, the Opinions assert that trademark policies need to be improved so that the exclusivity and scope of trademark rights can be correctly determined. To curtail the improper and opportunistic use of registered trademarks, the Opinions advise courts not to award damages if the mark in question is not in use, the owner of the mark has no intention of using the mark but uses the registration as an instrument for lodging claims, or the mark has not been used for three years. Further, the Opinions maintain that conflicts between a registered trademark or enterprise name and prior rights should be resolved under the principles of good faith, fair competition and protection of the prior rights. If an enterprise name infringes a registered mark of another enterprise, an injunction may be granted, or the manner or scope of the former enterprise’s use may be restricted. Similarly, if an enterprise name containing a well-known registered trademark of another enterprise causes confusion and results in unfair competition, an injunction or request for name change may be granted.
The Opinions advocate balanced IP protection, in which courts safeguard the rights of IP owners while prohibiting abuse of the IP litigation system, in order to provide a lenient investment and trade environment in a time of economic crisis. In particular, a defendant may ask a court to grant a declaratory judgment when an IP owner refuses or fails to timely respond to the defendant’s request for non-infringement confirmation. The Opinions also advise the courts to use caution in issuing preliminary injunctions that may have a profound impact on the defendant’s economic welfare and market outlook. At the same time, though, the Opinions urge courts to consider whether a processor fulfilled its obligation of due examination and care in deciding the processor’s liability for trademark infringement.
In sum, the principle goal of the Opinions is to promote economic growth under the current financial crisis. Although the Opinions are not an interpretation of the law, they are generally respected and followed by the lower courts.