China: Condition To Apply The Doctrine Of Estoppel (DOE) Zhongyu Electronics (Shanghai) Co.,Ltd. v. Shanghai Nine Eagle Electronic Technology Co.,Ltd.(Article No. 9 From "China Patent Case Review 2014" By Beijing East IP Ltd.)

Steering Engine

Zhongyu electronics (Shanghai) Co.,Ltd. v. Shanghai Nine Eagle Electronic Technology Co.,Ltd.- Condition to Apply the Doctrine of Estoppel (DOE) (Civil Judgment (2011) Min Ti Zi No.306 by the Supreme People's Court on April 12, 2012)

The Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases stipulates, in Rule 6, "where the applicant or patent right owner abandons a technical solution through amendments to the claims and/or specification or observations during the prosecution of the application or the invalidation proceedings of the patent, the court shall not support the right owner's claim of reclaiming the abandoned technical solution back into the protection scope in the infringement litigation case." Therefore, application of the DOE is premised with a condition that the right owner has abandoned the technical solution through amendments or observations during the patent prosecution or invalidation proceedings. The key issue presented in this case is that abandonment is not justified unless the patent owner has the intention to abandon by amendments or observations.

The patent owner, Zhongyu electronics (Shanghai) Co.,Ltd. (hereinafter referred to as "Zhongyu"), brought a lawsuit for patent infringement against Shanghai Nine Eagle Electronic Technology Co.,Ltd. (hereinafter referred to as "Nine eagle"). The patent owner holds a patent for utility model No. ZL200720069025.2 titled "Steering Engine" including six claims. Its claim 3 recites,

"The steering engine of claim 2 wherein a strip of carbon film and silver film is printed on the driving circuit board of the steering engine, said bracket is secured to the driving circuit board of the steering engine via a securing aperture thereon, and the electric brush on the bottom side of the slider keeps in touch with the carbon film and the silver film."

Claim 2 depends from the independent claim 1 whereas neither of them has defined the driving circuit board or any parts thereon. The allegedly infringing product differs from claim 3 in that a strip of carbon film and a gilded copper strip, instead of the silver film, are printed on the driving circuit board of the allegedly infringing product. Both the plaintiff and defendant agreed that the silver film and the gilded copper strip were equivalent to each other. The defendant made a prior art defense.

In the invalidation proceedings of the asserted patent, claims 1-2 and 4-6 were declared invalid while claim 3 was maintained valid in the Decision on Request for Invalidation No. 13717 made by the Patent Reexamination Board.

The first instance judgment ascertained the equivalent infringement of the alleged product based upon claim 3, but rejected the plaintiff's claim on merit of the defendant's prior art defense.

The second instance judgment rejected application of the doctrine of equivalence on merit of the DOE, although it concurred that the silver film and the gilded copper strip constituted equivalent technical features. In particular, the second instance court held that maintenance of validity of claim 3 by the Decision on Request for Invalidation essentially implied amendment to claim 1 by adding the features of claims 2 and 3 to claim 1. On such ground, the second instance court identified it as restrictive amendment to the claims for a purpose of maintaining validity of the patent. The added feature restricted the current conducting strip, used as a straight line-type variable resistor on the driving circuit board of the steering engine, to the silver film, implying the patentee's abandonment of other types of material to be used as the current conducting strip. Therefore, equivalent infringement cannot be established. Nevertheless, the second instance court sustained the prior art defense.

The patentee filed for a retrial upon dissatisfaction with the second instance's judgment. The Supreme Court rejected application of the DOE by the second instance court and concluded equivalent infringement. First, the Supreme Court set forth that the DOE is based upon the principle of good faith. The patent applicant usually tends to expedite granting of patent right by restrictive observation or amendment during the prosecution, and hopes to reclaim the abandoned technical solution back into the protection scope on merit of equivalent infringement during the litigation. To keep the stability and certainty of the granted patent right, the legal system prevents the patentee from benefiting from both sides by abusing the DOE. Second, the Supreme People's Court clarified the condition upon which the DOE is applied. Generally, the DOE is triggered by abandonment of technical solution(s) through either amendments to the specification and/or claims or observations. The Supreme People's Court pointed out that the subject matter and protection scope of a dependent claim would not change with invalidation of the claim from which it depended, and accordingly overruled the grounds of the second instance judgment that maintenance of validity of claim 3 essentially equaled amendment to claim 1. Moreover, it was elaborated by the Supreme People's Court that abandonment stems from restriction to the protection scope of a claim by adding technical feature(s) or restrictive observations on the protection scope of a claim made by the patent applicant voluntarily or in response to the examiner's requirement during the prosecution or invalidation proceedings. In a situation where the independent claim is declared invalid while the dependent claim is maintained valid by the Patent Reexamination Board and the applicant has never made any abandonment as described above, full attention should be paid to the condition that the applicant has not intended to abandon, and thus a strict criteria should be taken to determine abandonment while applying the DOE. If the additional feature of a dependent claim is not encompassed by the independent claim it depends on, it is not justified to say that any technical solutions excluding the additional feature have been totally abandoned, as the additional feature does not have a basis in the original independent claim. Specifically, the silver film recited in claim 3 of the asserted patent had not been defined in claims 1-2. The patentee didn't abandon any technical solutions using other conducting materials than the silver film as the current conducting strip by amendments to the specification and claims or observations. Therefore, it was inappropriate to prevent the doctrine of equivalence from being applied to interpret the additional feature concerning the silver film simply because claims 1-2 were declared invalid. Meanwhile, the Supreme People's Court held for the infringement instead by rejecting the defendant's prior art defense.

Remarks

This case elucidates the conditions upon which the DOE is applied in China, especially where independent claims are declared invalid but dependent claims are maintained valid.

The Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases stipulates, in Rule 6, "where the applicant or patent right owner abandons a technical solution through amendments to the claims and/or specification or observations during the prosecution of the application or the invalidation proceedings of the patent, the court shall not support the right owner's reclaiming of the abandoned technical solution back into the protection scope in the infringement litigation case." In other words, application of the DOE is premised with a condition where the right owner has abandoned the technical solution(s) through amendments or observations during the prosecution or invalidation proceedings of the patent.

First of all, this case clarifies that the claims should not be interpreted as having been narrowed in the protection scope when the independent claims are declared invalid but the dependent claims are maintained valid. Each of the claims, either independent or dependent, defines a separate and complete technical solution, despite the difference in drafting format. Accordingly, it is inappropriate to pose any restriction to the protection scope of a dependent claim simply because the independent claim on which the dependent claim depends is declared invalid.

Second, this case restates the condition on which abandonment of technical solution(s) by the patentee is ascertained. Specifically, the condition is that the patentee has restricted the protection scope of the claims, either voluntarily or in response to the examiner's requirement, through claim amendments or restrictive observations during the prosecution or invalidation proceedings of her/his patent. In a situation where the independent claim is declared invalid while the dependent claim is maintained valid by the Patent Reexamination Board and the applicant has never made any voluntary abandonment as described above, full attention should be paid to the condition that the applicant has not made intentional abandonment and a strict criteria should be taken when determine abandonment while applying the DOE. If the additional feature of a dependent claim is not encompassed by the independent claim which it depends on, it is not justified to determine total abandonment of any technical solutions excluding the additional feature, because it does not have a basis or counterpart in the original independent claim.

Here, it is also noted that the DOE should not be applied in a rigid manner, but depending on the genuine intention and purpose for which the patent owner makes claim amendments or observations in individual cases. The Interpretation II of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases (Draft for Public Comments), released on July 31 2014, stipulates, in Rule 16, "where the applicant or patentee makes amendments to the claims and/or specification or observations during the prosecution and affirmation of the patent right, the court should repudiate abandonment of any technical solution(s) due to the amendments or observations if the right owner can prove that the amendments and observations were not adopted by the examiner or had nothing to do with the granting or affirmation of the patent right despite the alleged infringer's allegation that the abandoned technical solution in this scenario should be excluded from the protection scope of the patent right."Attention will be continuously paid upon the application of the DOE.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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