Analysis on 1,813 patent cases closed between November 6, 2014 and June 30, 2017 concludes that there are 682 patent civil dispute cases (accounting for 37.6%), 1,131 patent administrative cases (accounting for 62.4%). Within the patent civil dispute cases, 668 of them concern patent rights infringement, and 14 concern disputes on ownership of patent rights. Within the patent administrative cases, 758 of them are patent invalidation administrative cases, 335 are administrative reexamination cases and 38 are administrative dispute cases. 1. Most patent rights dispute cases were closed in the form of verdicts. For those ended with judgments, plaintiffs got a higher rate of winning. Within 668 patent rights dispute cases, 142 were closed by judgments, 4 closed through mediations, and the remaining 522 were closed by verdicts, accounting for 78.1%. The reason for this mainly lies in that the stability of the patent rights involved were challenged during the litigations, hence part of the plaintiffs withdrew the lawsuits for fear that their patents might be invalidated, and part of them were rejected by the courts because their patent rights were invalidated. In addition, a considerable portion of parties withdrew their lawsuits after mediation and off-court settlement. This is a sign that court ruling is not necessarily the ultimate way to resolve patent civil disputes, leaving room for other ways or notions of settlement to this end. However, it’s worth note that plaintiffs won 116 of the 142 cases that closed by court ruling, with the winning rate stood at 81.7%.
2. Positive correlation between the number of patent rights infringement cases and the level of economic development of the region Patent disputes between civil entities are not only seen in patent rights infringement but are also seen in raising invalidation requests against others’ patent rights. 1) Patent rights disputes Within 668 patent rights infringement cases, 186 China mainland rights owners filed 594 litigations. The top three regions where such owners are located are Beijing (69 accounting for 37.1%), Guangdong (34, 18.3%) and Zhejiang (15, 8.1%). In Beijing, 69 rights owners filed 253 lawsuits. Nearly half of them, 18 and 14, are located in Haidian District and Chaoyang District, the top two districts in terms of economic turnover. Apart from them, 37 foreign, HK and Macao rights owners filed 74 lawsuits, with the top two entities being Japan (8) and US (6). In terms of geographical distribution of defendants, Beijing, Guangdong and Zhejiang also hold the top three positions. 2) Patent invalidation administrative disputes Within the 576 patent invalidation administrative cases that were closed by judgments, 364 invalidation requests were raised by China mainlanders, with 154 in Guangdong, 92 in Beijing, 59 in Zhejiang and 59 in Shanghai. There were 20 invalidations requests from foreign destinations, HK, Macao and Taiwan, with the top two being 6 from US, and 5 from Japan. The above data suggests that the number of patent rights infringement is positively related with the level of economic development of regions. The more developed a region is in economy, the more patent disputes there will occur.
3. Difference between technical fields of patent civil disputes and patent administrative disputes In accordance with the international patent classification standards, and in the 142 papers of civil judgments that could reveal the technical fields of patents, 43 (30.3%) cases concerns daily necessities, 28(19.7%) concerns electrics, 17 (12.0%) concerns operational transportation, 17 concerns fixed buildings, 15 (10.6%) concerns chemical metallurgy, 14 (9.9%) concerns physics, 6 (4.2%) concerns mechanical engineering and 2 (1.3%) concerns textile papermaking.
And in the 720 papers of administrative judgments for patent invalidation and reexamination, there is some difference in the amount and proportion of technical fields and case numbers compared with those of the civil disputes, namely, 143 (19.9%) in chemical metallurgy, 133 (18.5%) in operational transportation, 114 (15.8%) in electronics, 104 (14.4%) in mechanical engineering, 102 (14.2%) daily necessities, 58 (8.1%) in physics, 55 (7.6%) in fixed buildings and 11 (14.2%) in textile papermaking. The above data shows that the technical fields of daily necessities and electronics are prone to patent rights infringement, as the patentees in these fields are more active in protecting their rights, whereas patents in chemical metallurgy and operational transportation are either on their way to fill the market or have already taken shape in this regard.
4. The difference between domestic and foreign patentees mainly lies in the following two aspects 1) Types of entities In the 186 suing patentees in China mainland, the legal persons and natural persons are 120 and 66, roughly 1.8:1 in proportion.
Whereas in the 37 suing patentees from foreign countries, HK, Macao and Taiwan, the numbers of legal and natural persons are 34 and 3, roughly 11.3:1. China’s current patent system is favorable for patent granting. But the above data also show that natural persons in China mainland have become an unelectable force in patent litigation, considering their obvious advantage in obtaining and safeguarding patent rights. 2) Types and fields of patent rights The types and percentages of patent rights of patentees of China mainland are: design patents (51.7%), invention patents (29.8%), and utility model patents (18.5%). The numbers for foreign, HK, Macao and Taiwan patentees are invention patents (75.7%), invention patents (21.6%), and utility model patents (2.7%). And in the top 10 patentees in terms of litigation filing numbers, 8 patentees in China mainland claimed industrial design patent rights in the fields of furniture, bags and suitcases, and daily goods, only 2 patentees claimed invention patents concerning fire prevention materials and juicers. Whereas 7 foreign, HK, Macao and Taiwan patentees claimed patent rights in the fields of communication, computer and automobile parts; and the other 3 claimed design patent rights. It’s worth noting that both domestic and foreign patentees seldom choose to claim utility model patent rights, and the winning rate is also significantly lower than those of other types, leaving the plaintiffs at a disadvantaged position.
5. The amount of compensation for patent rights infringement is increasing Patentees won 116 patent infringement disputes, and the amount of compensation is showing an upward trend, with the numbers for 2015, 2016 and 2017 as 350,000 RMB, 1.024 million RMB and 1.103 million RMB respectively.
The average amount of compensation sought by patentees of China mainland in 2015 is 635,000 RMB, and the average amount of compensation granted by the court is 283,000 RMB, taking 44.6% percent. The average amount of compensation sought increased to 1.877 million (increased by 195.6%) in 2016, and the average amount of compensation granted by court is 1.081 million (increased by 282.0%), with the average supporting rate as 57.6% (risen by 13%). The average amount of compensation sought is 1.264 million in 2017, and the average amount of compensation granted by court is 1.108 million, with the average supporting rate increased to 87.7%. Though the data for foreign, HK, Macao and Taiwan patentees are too small to make statistical sense, the numbers for them have also increased. These data speaks volumes of Beijing IP Court’s determination in safeguarding the rights of patentees.
In the above winning judgments, infringements were not sentenced to a stop in 9 cases. 3 of them were thus sentenced because the patent terms were expired, 3 because the defendants were just market operators, 2 because the plaintiffs did not request cease of infringing acts, and 1 because the infringing acts had already stopped. However, as disputes over standard non-essential patents that tangle many interested parties increase, it is yet to be seen whether courts will make any breakthrough in this area. 6. Entities outside Beijing and those of foreign, HK, Macao and Taiwan origins are equally protected In the patent dispute cases closed by judgments, 129 patentees from China mainland won 106 of them, with the winning rate as 82.2%. Beijing patentees won 39 of 47 cases, with a winning rate of 83%. Non-Beijing patentees from China mainland won 67 of 82 cases, with a winning rate of 81.7%, almost the same with their Beijing peers. The number for foreign, HK, Macao and Taiwan patentees is 10 out of 13, with the winning rate as 76.9%, a bit lower than patentees from China mainland.
However, the average amount of compensation for foreign, HK, Macao and Taiwan patentees are 1.202 million RMB, significantly higher than the 757,000 RMB of patentees of China mainland. In view of the above data, Beijing IP Court treats all participants in patent protection equally without discrimination.
7. Judicial examination is favorable for patentees in general. On one hand, the progressive increase of compensation amount by courts signifies full recognition of patent values as judicial level, which is conductive for stimulating existing and potential patentees to further their innovation and production. On the other hand, in the 576 patent invalidation administrative disputes that closed by judgments, Patent reexamination board (PRB) of SIPO maintained the patent rights as valid in 233 cases (40.5% of the total), and sentenced 343(59.5%) patent cases as invalid. But when the above administrative cases entered into judicial procedure, 34 (13 invention patents, 12 utility model patents, and 9 design patents) valid decisions were rejected by Beijing IP Court, and 44 (17 invention patents, 21 utility model patents, and 6 design patents) invalid decisions were also rejected. With judicial rejections considered, there were 243 cases in which the patent rights were maintained as valid, 333 cases in which patent rights were invalidated, with the percentage as 42.2% and 57.8% respectively. In other words, the percentage of patent rights being maintained as valid has risen 1.7% after judicial examination.
In addition, in 335 patent reexamination administrative disputes, Beijing IP Court canceled 27 administrative decisions, with the rate of cancelling as 8.1%, higher than the number before the establishment of Beijing IP Court. This demonstrates that Beijing IP Court is positive and affirmative toward the grant and protection of patent rights. Meanwhile, owing to system reforms including judgment specialization, the introduction of technical experts and professional jury, the judicial capacity of judges and the authority of judicial examinations are enhanced. As a result, judicial dominance is increasingly being felt at all technical fields and deeper. 8. The number of cases in which all parties involved are foreign or domestic but non-Beijing is increasing. In the closed patent civil cases, the number of cases in which all parties involved are foreign is 1 in 2015. This number rose to 3 in 2016. Seen from the current trend of case acceptance, such number is expected to increase in the long run. In addition, the number of cases in which parties involved are domestic but non-Beijing was 51 in 2015, which rose to 65 in 2016, 48 of which were closed in the first half of 2017.
It is worth noting that, among the 594 cases filed by patentees from China mainland, 622 defendants were involved, 348 of whom are from Beijing, accounting for 55.9%, which means non-Beijing defendants took up 44.1%. In the 74 cases filed by foreign, HK, Macao and Taiwan patentees, 93 defendants were involved, Beijing had 39 (only 41.9% of the total), and non-Beijing patentees took up 58.1%. Considering that in Chinese legal system, the courts of jurisdictions are usually in the places of the defendants, the high percentage of non-Beijing defendants shows Beijing IP Court is establishing a niche in IP litigation as both domestic and foreign patentees are more willing to choose it for patent civil litigations.