China: The Supreme People's Court Interpretation On Several Issues Concerning The Application Of Law In Adjudication Of Patent Infringement Dispute Cases (II)

Fa Shi [2016] No.1

(Approved in the 1676th meeting session of the Adjudication Committee of the Supreme People's Court on January 25th, 2016, and implemented as of April 1st, 2016) 

To properly adjudicate patent infringement dispute cases, this Court has formulated this judicial interpretation in accordance with the provisions of the Patent Law of the People's Republic of China, the Torts Liability Law of the People's Republic of China, the Civil Procedures Law of the People's Republic of China and other relevant laws, as well as judicial practice.

Article 1 Where a patent has two or more claims, the right holder of the patent shall specify in his complaint the claim(s) based on which his patent is allegedly infringed by the infringer. If the claim(s) is not stated or not stated clearly in the complaint, the People's Court shall request the right holder for clarification. If, after the court's request and explanation, the right holder still does not clarify it, the People's Court may rule to dismiss the right holder's complaint.

Article 2 Where a claim asserted by the right holder in a patent infringement litigation is declared invalid by the Patent Re-examination Board (the "PRB"), the People's Court hearing the patent infringement dispute case may rule to dismiss the right holder's complaint based on the invalid claim.

If there is evidence to prove that an effective administrative judgment has vacated the invalidation decision, the right holder may file another lawsuit..

When the right holder files another lawsuit, the statute of limitations is counted from the date on which the administrative judgment mentioned in paragraph 2 of this Article has been served.

Article 3 Where a patent is requested for invalidation for obvious violation of Article 26(3) and 26(4) of the Patent Law, as a consequence of which the specification cannot be used to explain the claim, and the situation does not fall into that of Article 4 of this Interpretation, the People's Court hearing the patent infringement dispute case shall, as a general rule, suspend the proceedings. If no request is filed for invalidating the patent right within a reasonable period of time, the People's Court may determine the protection scope of the patent right according to what is recorded in the claim.

Article 4 When there is ambiguity in the grammar, text, punctuation, graphics or symbols in the claims, specification or drawings, but a person having ordinary skill in the art can reach only one possible understanding by reading the claims, specification and drawings, the People's Court shall make a finding in accordance with such understanding.

Article 5 When the People's Court determines the protection scope of a patent, all technical features recited in the preamble and the features portion of an independent claim and the referencing and limiting portion of a dependent claim shall have limiting effect.

Article 6 The People's Court may use other patents having divisional relationship with the patent in dispute, the patent examination files, effective judgments or rulings on patent validity, to interpret the claim(s) of the patent in dispute.

The patent examination files include the written materials submitted by the patent applicant or patentee during patent examination, re-examination and invalidation proceedings. Office actions, meeting minutes, oral hearing transcripts, effective patent re-examination decisions and effective patent invalidation decisions made by the patent administrative department of the State Council and the Patent Re-examination Board.

Article 7 Where the allegedly infringing technical solution has added technical features on the basis of all technical features of a close-ended claim for a composition, the People's Court shall find that the allegedly infringing technical solution does not fall within the protection scope of the patent right, unless the additional technical features are inevitable impurities of normal quantity.

The close-ended claim for a composition in the preceding paragraph generally speaking does not include claim for traditional Chinese medicine composition.

Article 8 A functional feature refers to a technical feature defined by its function or effect in an innovation-creation through structure, composition, step, condition or their inter-relationship, unless a person having ordinary skill in the art, after only reading the claim, can directly and specifically determine the embodiments to achieve such function or effect.

Compared with technical feature as recorded in the specification and drawings which are indispensable to realize the function or effect referred in the preceding paragraph, if the corresponding technical feature of the allegedly infringing technical solution has used substantially the same means to realize the same function and achieve the same effect, and a person having ordinary skill in the art may conceive such solution without creative labor when the alleged infringement occurs, the People's Court shall find such corresponding technical feature as identical or equivalent to the functional feature.

Article 9 Where an allegedly infringing technical solution cannot be adapted for use in the environment as defined by environmental features in the claim, the People's Court shall find that the allegedly infringing technical solution does not fall within the protection scope of the patent.

Article 10 In a claim, if the technical feature of a product is defined by preparation method, while the preparation method of the allegedly infringing product is neither the same as nor equivalent to it, the People's Court shall find that the allegedly infringing technical solution does not fall within the protection scope of the patent.

Article 11 Where a method claim does not specifically record the sequence of the technical steps, but a person skilled in the art, after reading the claim, specification and drawings, can directly and clearly think out of the steps that should be implemented in a certain order, the People's Court shall find that the sequence of steps plays a limiting role on the protection scope of the patent.

Article 12 Where a claim adopts terms such as "at least", "no more than" to define a numerical feature, and a person skilled in the art, after reading the claims, specification and drawings, thinks that the patented technical solution has specially highlighted the limiting effect of the terms on the technical feature, if the right holder alleges that a different technical feature is an equivalent feature, the People's Court shall not support such allegation.

Article 13 Where the right holder proves that the amendments or statement made by the applicant or patentee to limit the claims, specification or drawings during the examination or validity proceedings have been explicitly denied, the People's Court shall find that the amendments or statement has not resulted in abandonment of the technical solution.

Article 14 In determining the average consumer's level of knowledge and cognitive capability of a design, the People's Court shall consider the design freedom of products identical with or similar to that of the patented design when the alleged infringement occurs. If broader design freedom exists, the People's Court may find that the average consumer may feel difficult to notice the minor differences among different designs. If narrow design freedom exists, the People's Court may find that usually it is easier for an average consumer to notice the minor differences among different designs.

Article 15 In a design patent for a set of products, if the allegedly infringing design is identical with or similar to one of the designs, the People's Court shall find that the allegedly infringing design falls within the protection scope of the patent.

Article 16 When the design patent for an assembled product has only one way of assembly, if the allegedly infringing design is identical with or similar to the design in the assembled state, the People's Court shall find that the allegedly infringing design falls within the protection scope of the patent.

If, in a design patent, the components have no assembling relationship, or the components have more than one way of assembly, while the allegedly infringing design is identical with or similar to the design of each individual component, the People's Court shall find that the allegedly infringing design falls within the protection scope of the patent. If the allegedly infringing design lacks the design of an individual component, or is neither identical with nor similar to the design of an individual component, the People's Court shall find that the allegedly infringing design does not fall within the protection scope of the patent.

Article 17 In a design patent for a product of variable states, if an allegedly infringing design is identical with or similar to the design in all the various states of use as illustrated in the various state views, the People's Court shall find that the allegedly infringing design falls within the protection scope of the patent. If the allegedly infringing design lacks the design of one state of use, or is neither identical with nor similar to the design in one state of use, the People's Court shall find that the allegedly infringing design does not fall within the protection scope of the patent.

Article 18 Where a right holder, according to Article 13 of the Patent Law, requests an entity or individual to pay appropriate fees for implementing his invention during the period between the date on which the invention patent application has been published and the date on which the patent has been granted, the People's Court may determine reasonable fees by referring to relevant patent royalties.

Where the protection scope claimed by the applicant in a published invention patent application differs from the protection scope of the granted invention patent, if the sued technical solution falls within both scopes, the People's Court shall find that the defendant has implemented the invention during the aforesaid period. If the sued technical solution falls within only one of the scopes, the People's Court shall find that the defendant has not implemented the invention during the aforesaid period.

After the grant of an invention patent is announced, if a person, without authorization of the patentee and for production and business purpose, uses, offers for sale, or sells the product that has been manufactured, sold or imported by another person during the aforesaid period, and if that person has paid or has undertaken in writing to pay the appropriate fee as provided by Article 13 of the

Patent Law, the People's Court shall not support the right holder's claim that such use, offer for sale or sale infringes his patent.

Article 19 Where a product sales contract has been formulated in accordance with the law, the People's Court shall find that it constitutes "sale" as provided in Article 11 of the Patent Law.

Article 20 Where a subsequent product obtained by further processing or treating of the products made directly from a patented process are further processed or treated, the People's Court shall find that such re-processing or re- treatment does not belong to "use of product directly obtained from the patented process" as provided in Article 11 of the Patent Law.

Article 21 Where one clearly knows that a product is the raw material, equipment, part, or intermediate material exclusively for the implementation of a patent and, without authorization from the patentee and for production or business purpose, supplies such product to another person who has infringed the patent, if the right holder claims that the supplier's act belongs to "assisting other's tortious act" as prescribed under Article 9 of the Torts Liability Law, the People's Court shall support his claim.

Where one clearly knows that a patent has been granted on a product or method and, without authorization from the patentee and for production or business purpose, actively induces another person to have implemented the act of infringing the patent, if the right holder claims that the inducer's act belongs to "abetting other's tortious act" as prescribed under Article 9 of the Torts Liability Law, the People's Court shall support his claim.

Article 22 In a prior art defense or prior design defense raised by the alleged infringer, the People's Court shall define the prior art or prior design in accordance with the Patent Law effective at the application date of the patent.

Article 23 Where the allegedly infringing technical solution or design falls within the protection scope of the prior patent in dispute, if the alleged infringer raises non-infringement defense on the ground that his technical solution or design has been granted a patent, the People's Court shall not support this defense.

Article 24 Where the recommended national, industrial or local standard has explicitly indicated information of an essential patent, if an alleged infringer raises non-infringement defense on the ground that implementing such standard does not need license from the patentee, the People's Court generally shall not support his defense.

Where the recommended national, industrial or local standard has explicitly indicated information of an essential patent, when the patentee and an alleged infringer negotiate terms for license of the patent, if the patentee willfully violates the fair, reasonable and non-discriminatory licensing obligations he has undertaken during the formulation of the standard, which results in failure to reach agreement for a patent license, and if the accused infringer has no obvious fault in the negotiation, the People's Court generally shall not support the patentee's request for stopping the implementation of the standard.

The licensing terms referred in the second paragraph of this Article shall be determined by negotiation between the patentee and the alleged infringer. If the parties fail to reach an agreement after sufficient negotiation, they can request the People's Court to determine the license terms. In determining the license terms, the People's Court shall, in accordance with the fair, reasonable and non- discriminatory principle, comprehensively consider such factors as the innovation level of the patent, its effect in the standard, the technical field of the standard, nature of the standard, the implementation scope of the standard, and relevant license terms.

Where laws or administrative regulations have other stipulations on the implementation of patents in a standard, such provisions shall prevail.

Article 25 Where one uses, offers for sale or sells any infringing product for production or business purpose without knowing that the product has been made and sold without authorization from the patentee, and he has provided evidence to prove the legitimate source of the product, if the right holder seeks injunction against such use, offer for sale or sale, the People's Court shall support it, unless the user of the allegedly infringing product provides evidence to prove that he has already paid reasonable consideration for the product.

"Without knowing" as stated in the first paragraph of this Article means both "actually not knowing" and "should not know".

"Legitimate source" as stated in the first paragraph of this Article means that the product has been acquired by means of normal commercial manner such as lawful sales channel and usual purchase and sale contracts. To prove "legitimate source", the person who uses, offers for sale or sell the product should provide relevant evidence in consistence with transaction norms.

Article 26 Where the defendant commits patent infringement and the patentee requests the court for an injunction, the People's Court shall support his claim, but the court may, in light of national interests or public interests, not grant the injunction against the defendant, and order the defendant to pay reasonable fees instead.

Article 27 Where it is difficult to determine the actual loss suffered by the right holder due to infringement, the People's Court shall ask the right holder to provide evidence on the profit gained by the infringer from the infringement according to Article 65(1) of the Patent Law. Where the right holder has provided preliminary evidence on profit gained by the infringer, and the account books and documents on the patent infringement are mainly held by the infringer, the People's Court may order the infringer to provide such books and documents. If the infringer refuses to provide those books and documents without justification or provides false books and documents, the People's Court may determine the profit gained by the infringer from the infringement according to the right holder's claim and evidence provided by the right holder.

Article 28 Where a right holder and an infringer have agreed on the amount of damages or the ways of calculating damages according to law, and in a patent infringement lawsuit, it is requested to determine the amount of damages based on the agreement, the People's Court shall support the request.

Article 29 After a decision for declaring the patent invalid has been made, if a party files a petition for retrial according to law based on the invalidation decision and requests to revoke the infringement judgment or mediation document that was made by the People's Court before the invalidation decision but has not yet been enforced, the People's Court may rule to suspend the retrial examination, and rule to suspend the enforcement of the original judgment or mediation document.

Where the patentee provides a sufficient and valid guarantee with the People's Court and requests to continue to enforce the judgment or mediation documents mentioned in the preceding paragraph, the People's Court shall continue to enforce; where the infringer provides a sufficient and valid counter guarantee with the People's Court and requests to suspend the enforcement, the people's court shall approve. Where an effective judgment of the People's Court has not withdrawn the decision for declaring invalidity of a patent right, the patentee shall compensate the losses caused to the other party due to continuation of enforcement; where the decision for declaring invalidity of a patent right has been withdrawn by the effective judgment of the People's Court and the patent right is still valid, the People's Court may directly enforce the above counter guaranteed properties according to the judgment or mediation documents mentioned in the preceding paragraph.

Article 30 Where no action is filed with the People's Court against an invalidation decision within the legally prescribed time limit, or where an action has been filed but the effective judgment does not revoke the invalidation decision, if a party files a petition for retrial according to the law and requests to revoke the infringement judgment or mediation document made by the People's Court before the invalidation decision but has not been enforced, the People's Court shall grant the retrial. If a party requests to terminate the enforcement of the infringement judgment or mediation document made by the People's Court before the invalidation decision but has not been enforced, the People's Court shall rule to terminate the enforcement.

Article 31 This interpretation shall take effect on April 1st, 2016. In case of any inconsistency between relevant judicial interpretations previously released by the Supreme People's Court and this Interpretation, this Interpretation shall prevail.

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