Enforcement through the courts

At trial

What level of expertise can a patent owner expect from the courts?

Most judges have no technical background. Expert testimony and reports from judicial appraisal centres and court-appointed appraisers can be used to help judges identify and understand the technical facts of a patent case. The patent owner can submit an application to the court to request one or two expert assistants to testify in court and provide opinions on technical issues in the case.  Expert assistants can offer opinions to the appraisal reports or questions asked by the judicial appraiser.

Since the end of 2014, China established three IP courts in Beijing, Shanghai and Guangzhou. Within the IP courts, there is a network of technical investigation officers. Judges have the discretion to designate an investigation officer to participate in any civil and administrative patent cases. The investigation officers can offer opinions on the technical issues in the cases and answer judges’ questions on technical issues.

In addition to the IP courts, China has established 15 IP tribunals across 10 provinces and two municipalities. These IP tribunals have cross-regional jurisdiction and exclusive jurisdiction over certain IP disputes (generally including disputes involving patents, trade secrets involving technology, software, integrated circuit designs and new plant varieties, recognition of well-known trademarks and disputes involving damages above a certain amount) in the first instance. The system of IP courts and IP tribunals is expected to improve the expertise of judges adjudicating IP cases and harmonise the interpretation and application of IP law throughout China.

Are cases decided by one judge, a panel of judges or a jury?

A single judge or a panel of judges decides civil cases, depending on the complexity of the case. A three-judge panel decides most patent cases.

If jury trials do exist, what is the process for deciding whether a case should be put to a jury?

Jury trials do not exist in China.

What role can and do expert witnesses play in proceedings?

Expert witnesses are used to help judges investigate relevant technical facts in patent cases, not non-technical facts. Both the plaintiff and defendant can question expert witnesses. The courts determine the acceptability of an expert witness.

Does your jurisdiction apply a doctrine of equivalents and, if so, how?

China applies the doctrine of equivalents. In addition to considering the literal scope of a patent claim, the patent scope is determined by considering features that are not specifically covered by, but are equivalent to, the technical features of a patent claim. Equivalent features are those that:

  • use substantially the same means, perform substantially the same function and produce substantially the same effect as the claimed technical features; and
  • could have been contemplated by a person with ordinary skill in the art without inventive labour before the date of the alleged infringement.

Is it possible to obtain preliminary injunctions? If so, under what circumstances?

Patent owners or interested parties may obtain preliminary injunctions (although it is rare for one to be granted in a patent case) from a court if the following are sufficiently demonstrated:

  • the patent owner or an interested party has a valid patent right or an interest in the valid patent right;
  • the party that the injunction is sought against is performing or is going to perform infringing acts;
  • the acts will likely cause irreparable harm; and
  • guarantee.

How are issues around infringement and validity treated in your jurisdiction?

In China, determination of patent validity and patent infringement is bifurcated, with the Patent Review Board determining patent validity and the court determining patent infringements.

Any party (including the patent owner) can bring an invalidation action against a granted patent by filing an invalidation application with the Patent Review Board. A patent may be invalidated based on the following limited grounds:

  • Confidentiality examination requirements for inventions made in China were not satisfied before filing of the patent outside China.
  • There is a lack of novelty, inventiveness or usefulness.
  • There is insufficient disclosure.
  • The description does not support the claims.
  • Amendments to the patent application documents exceed the original scope.
  • Independent claims fail to state the essential technical features of the solution to the technical problem.

A patent cannot be invalidated solely on the basis that the listed inventors are not the actual creators of the invention.

The patent owner or an interested party (eg, a licensee) can bring a patent infringement claim against a defendant by filing a complaint with a court. The party bringing the claim must demonstrate that it is the patent owner or an authorised interested party.

There is no requirement to file an invalidation application with the Patent Review Board before filing a patent infringement claim or vice versa.

A defendant to a patent infringement claim before a court will often file an invalidation application with the Patent Review Board. In such cases, the court will decide whether to stay the infringement proceedings until final determination of the invalidation action. If the court decides not to stay the infringement proceedings, both the infringement proceedings and the invalidation proceedings will continue. The Patent Review Board will continue the invalidation action regardless of the court’s decision. As a result, there is a possibility that the rulings of the court and the Patent Review Board will be inconsistent (ie, the court may find that the patent was infringed, while the Patent Review Board finds that the patent is invalid). In such cases, a party can appeal or request a retrial by presenting the invalidation decision as new evidence.

To mitigate the possibility that the Patent Review Board’s invalidity ruling will not be rendered in time to be considered in court, defendants can rely on the prior art defence. Under the prior art defence, defendants are not held liable for infringement if they can prove that all of the technical features claimed in the patent that they are accused of infringing are the same as, or not substantively different from, the features of an existing technology and are thus covered by the prior art. Through the prior art defence, the courts can (although this right is limited) find that a patent has not been infringed without making a determination on validity (which is reserved for the Patent Review Board) if it considers the patent covers technology already existing in the prior art.

Will courts consider decisions in cases involving similar issues from other jurisdictions?

As China’s legal system is a civil law system, no tradition or statute requires the courts to follow prior decisions involving similar issues in China or in other jurisdictions. However, many judges follow and consider the reasoning behind landmark Chinese decisions and decisions from other jurisdictions, and may consider arguments based on reasoning from landmark decisions. 

Damages and remedies

Can the successful party obtain costs from the losing party?

A successful patent owner can be awarded court fees and seek reasonable costs incurred in stopping the patent infringement, including reasonable attorneys’ fees.

What are the typical remedies granted to a successful plaintiff?

In patent infringement cases, the courts can grant successful plaintiffs the following remedies:

  • preliminary injunctions;
  • final injunctions;
  • reasonable fees for pre-grant use between the publication date and patent grant date (available only for invention patents);
  • damages for post-grant infringement; and
  • court fees and reasonable costs incurred for stopping the patent infringement, including reasonable attorneys’ fees.

How are damages awards calculated? Are punitive damages available?

Under the Patent Law, damages are determined as follows:

  • actual losses due to infringement;
  • gains of the infringer from infringement (if actual loss is difficult to determine);
  • an appropriate multiple of a reasonable royalty fee (if actual loss and gains are difficult to determine); or
  • statutory damages of between Rmb10,000 and Rmb1 million (if actual loss, gains and royalty fees are difficult to determine).

In the fourth Patent Law amendment (draft for review), statutory damages are amended to between Rmb100,000 and Rmb5 million.

Punitive damages are not available under the Patent Law, but under the fourth Patent Law amendment (draft for review) enhanced damages of up to three times the damages originally awarded are available for wilful infringement. 

How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?

The courts usually grant permanent injunctions to successful plaintiffs.

Timescale and costs

How long does it take to obtain a decision at first instance and is it possible to expedite this process?

Under the Civil Procedure Law, a first-instance decision in a civil case between two Chinese parties should be obtained within six months of the date on which the case is accepted. In practice, the actual timing varies and can greatly exceed six months, especially for foreign related cases. There is no formal way to expedite the trial process.

How much should a litigant plan to pay to take a case through to a first-instance decision?

Costs to obtain a first-instance decision include:

  • investigation and evidence-gathering costs;
  • court fees (in patent infringement cases, these depend on the amount of damages claimed, typically 0.5% to 2% of the damages claimed);
  • expert or appraisal centre fees (if used); and
  • attorneys’ fees.

Costs vary depending on:

  • the complexity of the case;
  • the technology in question;
  • the amount of damages involved;
  • the evidence-gathering mechanisms employed;
  • the difficulty gathering evidence; and
  • whether experts or an appraisal centre is used.

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