Interpretations of the Supreme People's Court on Issues Concerning the Application of Law in the Trial of Patent Infringement Dispute Cases (II)

Fa Shi [2016] No.1

March 21, 2016

The Interpretations of the Supreme People's Court on Issues Concerning the Application Law in the Trial of Patent Infringement Dispute Cases, which was adopted at the 1676th Session of the Judicial Committee of the Supreme People's Court on January 25, 2016, is hereby promulgated and shall come into force as of April 1, 2016.

Interpretations of the Supreme People's Court on Issues Concerning the Application of Law in the Trial of Patent Infringement Dispute Cases(II)

(Adopted at the 1676th Session of the Judicial Committee of the Supreme People's Court on January 25, 201 and shall come into force as of April 1, 2016 Fa Shi [2016] No.1).

With a view to fairly hearing patent infringement cases, the Interpretations are hereby promulgated in accordance with the Patent Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China and other relevant laws and regulations and in the light of the judicial practices.

Article 1 Where there are two or more claims in the patent claims, a patentee shall specify the claims for patent infringement against an accused infringer in the complaint. Where the complaint does not specify the claims or the claims are not clarified, a people's court shall request the patentee to make clarification; in case that the patentee refuses to respond to the request, the people's court may dismiss the lawsuit.

Article 2 Where a claim asserted by a patentee in a patent infringement lawsuit is declared invalid by the Patent Reexamination Committee, a people's court adjudicating the patent infringement lawsuit may dismiss the lawsuit brought by the patentee based on the invalidated claim;
Where there is evidence to prove that the Patent Reexamination Committee's decision of declaring the patent right invalid is revoked by an effective administrative ruling, the patentee may file a new lawsuit.
Where the patentee files a new lawsuit, the lawsuit limitation shall start from the delivery date of the aforementioned administrative ruling as stated in Paragraph 2, Article 2 herein.

Article 3 If the patent right is petitioned for the invalidation declaration on the grounds that patent specification in beach of Paragraph 3 and Paragraph 4 of Article 26 in the Patent Law of the People's Republic of China cannot be used for interpreting the claim and does not fall within the scope as prescribed in Article 4 herein, the people's court adjudicating the patent infringement case shall stay the lawsuit. Where the patent right is not petitioned for the invalidation declaration within the prescribed time limit, the people's court may determine the scope of patent protection based on the records of the claim.

Article 4 Where grammar, text, punctuation, drawings and symbols and other errors in the claims, specification and drawings may be construed in different ways, if a sole clear understanding is gained by an ordinary technician by reading such claims, specification and drawings, a people's court shall affirm the sole understanding.

Article 5 Where a people's court determines the protection scope of a patent right, a preamble section and character section of an independent claim, and a reference section and a limitation section of a dependent claim shall all have a limitation function.

Article 6 A people's court may interpret the claim for the patent right in dispute by using another patent which has direct divisional application relationships with a patent in dispute, the patent reexamination records, and the effective written ruling of establishing and granting patent right.
The patent reexamination records include the written documents filed by a patent applicant and a patentee in the process of patent examination, reexamination and invalidation, notifications of patent examination, meeting records, oral hearing records, binding decisions of the patent reexamination and invalidation issued by the Patent Administrative Department under the State Council and the Patent Reexamination Committee.

Article 7 For a closed claim of a composition, where an accused infringing technical solution has other technical features in addition to all technical features of the claim, a people's court holds that the accused infringing technical solution does not fall within the protection scope of a patent right, save that the additional technical features are classified as inevitable conventional quantity impurities.
Generally speaking, the aforementioned closed claims for composition shall not include the claim for traditional Chinese medicine composition. .

Article 8 For the purposes hereof, functional feature refers to technical feature defined by the function and effect of the structures, compositions, process and conditions and their relations in an invention, save that the achievement of the foregoing function and effect can be directly and clearly derived merely from reading the patent claims by an ordinary technician.
Where comparing with a technical feature that is necessary to achieve the above-mentioned function or effect as specified in the specification or drawings, the corresponding technical feature of an accused infringing technical solution can perform the same function in substantially the same way and achieve the same effects and is obvious to an ordinary technician without creative efforts at the filing date of a patent infringement case, a people's court holds that the corresponding technical feature is identical to or is equivalent to the functional feature.

Article 9 Where an accused infringing technical solution is not applicable to the environment that is defined by the use environment feature of a product claim, a people's court holds that the accused infringing technical solution shall not fall within the protection scope of the patent right.

Article 10 With respect to a technical feature which is defined by the product preparation method in a product claim, where the preparation method of an accused infringing product is neither identical nor equivalent, a people's court holds that the accused infringing technical solution shall not fall within the protection scope of the patent right.

Article 11 Where a method claim does not contain technical process and an ordinary technical can directly and clearly infer special technical process by reading patent claims, specification and drawings thereof, a people's court holds that such technical process shall limit the protection scope of the patent right.

Article 12 Where a claim uses terms like "at least" or "not more than" to define a numerical feature and an ordinary technician considers that the patentee strongly emphasizes that these terms limits a technical feature after reading the patent claims, specification and the drawings thereof, if the patentee alleges that a non-identical technical feature is classified as equivalent features, a people's court shall not support such an allegation.

Article 13 Where the patentee proves that the restrictive amendment or statement of patent claims, specification and drawings thereof made by a patent applicant or a patentee in the procedures for establishing and granting patent-right has been explicitly denied, a people's court holds that such amendment or statement shall not result in the waiver of technical solutions.

Article 14 When judging the knowledge and cognitive capability of ordinary consumers for appearance design, the people's court shall take account of the design space of the products which are identical or similar to authorized exterior design products at the filing date of a patent infringement case. In general, where there is a larger design space, it is not easy for an ordinary customer to notice a relatively minor difference between different designs; where there is a smaller design space, it is easier for an ordinary customer to notice a relatively minor difference between different designs.

Article 15 For the exterior design patents of complete sets of products, if an accused infringing design is identical or similar to the exterior design of any of products, a people's court holds that the accused infringing design shall fall within the protection scope of the patent right.

Article 16 For a design patent of an assembled product in which there is an exclusive assembly relation, where an accused infringing design is identical or similar to the overall design of the assembled product in the state of the assembly, a people's court holds that the accused infringing design shall fall within the protection scope of the patent right.
For a design patent of an assembled product which there is no fixed assembly relation among the parts of, or in which the assembly relation is not exclusive, where accused infringing designs are identical or similar to the designs of all of individual parts of the design patent, a people's court holds that the accused infringing designs shall fall within the protection scope of the patent right; where the accused infringing design lacks the design of an individual part of the assembled product, or is neither identical nor similar thereto, an people's court holds that the accused infringing designs shall not fall within the protection scope of the patent right.

Article 17 For a design patent of a product in varying states, where an accused infringing design is identical or similar to the exterior design of the product in all service conditions shown in the drawings of variable states, a people's court holds that the accused infringing patent shall fall within the protection scope of the patent right. Where the accused infringing design lacks the exterior design of the product in a service condition, or is neither identical nor similar thereto, a people's court holds that the accused infringing design shall not fall within the protection scope of the patent right.

Article 18 Where a right holder claims for reasonable fees against a company or an individual using the invention patent from the publication date of the invention patent application to the announcement date of patent issuance, a people's court may determine the fees by reference to relevant patent royalties.
Where the protection scope of patent right claimed by an applicant on the date of the publication of a patent application differs from that on the date of the announcement of patent issuance, if an accused infringing technical solution falls within both scopes thereof, a people's court holds that an accused infringer shall have used the invention within the above time limit thereof; if an accused infringing technical solution only falls within one of the scopes thereof, a people's court holds that an accused infringer shall not have used such invention within the above time limit thereof.
Where the products manufactured, sold or imported by others within the said time limit as specified in Paragraph 1 thereof, without the licensing of a patentee, are used, undertaken to sell or sold for the purposes of production or operation after the announcement date of patent issuance, if others paid the reasonable fees or undertook to pay such fees in writing as stipulated in Article 13 of the Patent Law, a people's court shall not support the patentee in claiming for the aforementioned patent infringement.

Article 19 Where a product sales contract is concluded according to the law, a people's court holds that it shall affirm the "sales" specified in Article 11 of the Patent Law.

Article 20 Where a subsequent product is produced by way of further processing or treatment from an existing product that is directly manufactured according to the patented method,a people's court holds that such product is not deemed as "product directly produced according to the patent methods as specified in Article 11 of the Patent Law".

Article 21 Where a party knowing that the products are raw materials, equipment, parts or byproducts used for an invention, without the licensing of a patentee, supplies such products to a party for the purpose of production and operation and this results in patent infringement, if a right holder alleges that the supplier's act constitutes contributory infringement as specified in Article 9 in the Tort Liability Law, a people's court shall support such an allegation. Where a party that knows that the products and methods are granted patent right, without the licensing of a patentee, induces others to infringe patent for the purpose of production and operation, if the patentee alleges that the inducer's act constitutes inducement infringement act as specified in Article 9 in the Tort Liability Law, a people's court shall support such an allegation.

Article 22 Where an accused infringer makes non-infringement defense of existing technologies or designs, a people's court shall define existing technologies and designs in accordance with the effective Patent Laws on the filing date of a patent application.

Article 23 Where the alleged technical solution or exterior design infringements fall within the foregoing protection scope of patent right thereof, if the accused infringer makes non-infringement defense on the grounds that his or her technical solutions or exterior designs are granted patent right, a people's court shall not support such an allegation.

Article 24 Where non-compulsory national, industrial or local standards explicitly disclose necessary patent information related to the standards, if an accused infringer conducts non-infringement defense by arguing that no licensing from the right holder is required for enforcing such standards, a people's court shall not support such an allegation.
Where non-compulsory national, industrial or local standards explicitly disclose necessary patent information relevant to the standards, if the patentee, when negotiating with the accused infringer on patent licensing terms, deliberately dishonors the obligations of fairness, reasonableness and non-discrimination which are undertaken to assume in the process of establishing the standards and this results in failure to enter into an patent licensing agreement, a people's court shall not support the patentee's allegation on ceasing enforcing the standards provided that the accused infringer has no serious faults during negotiation. The licensing terms of patents relevant to the standards shall be negotiated by the patentee and the accused patent infringer; where they fail to reach a consensus through negotiation, the parties may respectfully request a people's court to make a ruling. In the determination of the licensing terms, the people's court shall take account of the degree of innovation of the patent and the use of the patent in the standards, the technical fields of the standards, the nature of the standards, the application scope of the standards, relevant licensing terms and other factors sticking to the principles of fair, reasonable and non-discrimination.
Where other laws or administrative regulations stipulate any patent specified in the standards, such other provisions shall prevail.

Article 25 Where an infringing product is used, undertaken to sell or sold for the purposes of production or operation without knowing that such product is manufactured and sold out without the licensing of a patentee, if the legitimate source of such products is proved, a people's court shall support the patentee's legal claims on ceasing the aforesaid using or undertaking to sell or selling the infringing product, save that the alleged infringer has proved that he or she executed reasonable valuable consideration.
"Without knowing" mentioned in Paragraph 1 thereof refers to that the party actually does not know and should not have known.
"Legitimate source" stated in Paragraph 1 thereof means procuring the infringing product through legitimate business channels, valid sales contracts and other legitimate business modes. With respect to legitimate source, the user, the party undertaking to sell products or the seller shall provide relevant evidence in compliance with transaction practices.

Article 26 Where the alleged infringer commits patent infringement, if the patentee respectfully request a people's court to order him or her to cease patent infringement act, the people's court shall support such a claim. In consideration of national and public interests, a people's court may rule that the alleged infringer is ordered to pay reasonable royalties rather than ceasing alleged patent infringement act.

Article 27 If it is hard for the patentee to determine actual losses incurred due to patent infringement, a people's court shall request the patentee to prove the profits derived by the alleged infringer from patent infringement under Paragraph 1 of Article 65 in the Patent Law. Where the patentee provide preliminary proof, if the account books and documents related to infringement acts are primarily under the control of the alleged infringer, a people's court may order the alleged infringer to provide such
account books and documents; where the allege infringer disobeys the order without justified causes or provides falsified ones, the people's court may determine the profits derived by the alleged infringer from patent infringement based on the patentee's claim and proof.

Article 28 Where the patentee and the alleged infringer negotiate on the amount of compensation for patent infringement or the calculation method for the compensation and enter into an agreement by law, if the patentee claims on determining the amount of compensation based on such agreement in a patent infringement lawsuit, the people's court shall support such a claim.

Article 29 After invalidation decision is issued by the Patent Reexamination Committee, where the party petitions for a retrial over the revocation of the unforced ruling on patent infringement and mediation agreement issued by a people's court prior to the declaration of the invalid patent right, the people's court may stay the rehearing reexamination and the enforcement of original ruling and mediation agreement.
Where the patentee offers sufficient and valid guarantee and claims on the continuous enforcement the aforesaid ruling and mediation agreement thereof, the people's court shall order such continuous execution; where the alleged infringer provides sufficient and valid counter-guarantee and respectfully request a people's court to stay the execution, the people's court shall grant a leave; where the invalidation decision is not revoked by the effective ruling by the people's court, the patentee shall indemnify the losses inflicted on the alleged infringer due to continuous enforcement; where the invalidation decision is set aside by the effective ruling by the people's court and the patent right is still valid, the people's court shall execute the above counter-guarantee in accordance with the foregoing ruling and mediation agreement thereof.

Article 30 With respect to a decision on declaring a patent right invalid issued by the Patent Reexamination Committee, where the party decides not to appeal to a people's court within the statutory period or the invalidation decision is not revoked by an effective ruling by a people's court, if a party, based on the invalidation decision, lawfully petitions for a retrial over the revocation of an unenforced patent infringement ruling or mediation agreement issued by a people's court prior to the declaration of the invalid patent right, the people's court shall rehear the case; if the party, based on the invalidation decision, lawfully petitions for terminating the execution of an unforced patent infringement ruling or a mediation agreement issued by a people's court prior to the declaration of the invalid patent right, a people's court shall rule to terminate the execution.

Article 31 These Interpretations shall come into force as of April 1, 2016. Where there is any discrepancy between existing relevant judicial interpretations promulgated by the Supreme People's Court and the Interpretation hereof, the Interpretation shall prevail.