China: The Application Of Prior Art Defense In Patent Infringement Litigation Yancheng Zetian Machinery Co., Ltd. V. Yancheng Greater Machinery Co., Ltd.(Article No. 15 From "China Patent Case Review 2015" By Beijing East IP Ltd.)

Direct-Connected Hydraulic Control Apparatus for a Hydraulic Rocker Cutting Machine

Yancheng Zetian Machinery Co., Ltd. v. Yancheng Greater Machinery Co., Ltd. – the Application of Prior Art Defense in Patent Infringement Litigation (Civil Ruling (2012) Min Shen Zi No. 18 by the Supreme People's Court on July 11, 2012)

The principle of prior art defense established in patent infringement litigation means that the scope of protection of a patent right shall not encompass the prior art. The rationale of the principle is that the public have the right to freely practice the prior art known to the public, and no one is entitled to claim the prior art into the scope of an exclusive patent right, or else the public interest will be damaged. In addition to examining the legal validity of the patent right in the patent invalidation procedure, examining an accused infringer's assertion of the prior art defense in the patent infringement litigation is advantageous for timely resolving disputes, reducing litigation exhaustion of the parties, and realizing unification of equity and efficiency. The prior art defense and its difference from determination of novelty judgment or inventiveness in the patent invalidation procedure are articulated in this case, which facilitate the parties' understanding the standards of application of the prior art defense by the courts in China.

The patentee, Yancheng Zetian Machinery Co., Ltd. (hereafter referred to as "Zetian Machinery"), owns a utility model patent No. ZL 200420109343.3, titled "Direct-Connected Hydraulic Control Apparatus for a Hydraulic Rocker Cutting Machine" (hereafter called "the control apparatus"). The independent claim of the utility model patent reads:

"A hydraulic control apparatus for a hydraulic rocker cutting machine, comprising a hydraulic cylinder, a rod piston installed in the hydraulic cylinder, an electromagnetic valve, an oil pump and a relief valve, characterized in further comprising a regulating valve and a flexible shaft, wherein an upper oil chamber channel, a lower oil chamber channel and an unloading channel are provided on the rod piston, a regulating valve chamber, in which the regulating valve is provided, is provided at an upper portion of the unloading channel, the regulating valve is connected to one end of the flexible shaft, a handle is provided on the other end of the flexible shaft, an output of the electromagnetic valve is directly connected to an outer end of the rod piston, the electromagnetic valve is connected to the oil pump via a square flange and a connective pipe, and the relief valve is provided at a side of the square flange."

Zetian Machinery brought a lawsuit against Yancheng Greater Machinery Co., Ltd. (hereafter referred to as "Greater Machinery") for infringing the utility model patent at issue. Greater Machinery argued that the accused product was the same as the F45 hydraulic rocker cutting machine in the prior art, and thus did not infringe the patent right. The Intermediate People's Court of Yancheng city, Jiangsu province (hereafter referred to as "the court of the first instance") held that Greater Machinery failed to provide adequate evidence to prove that the accused product was the prior art and the prior art defense was not justifiable, and upheld the infringement.

Both Zetian Machinery and Greater Machinery refused to accept the judgment of first instance and appealed. The Jiangsu High People's Court (hereafter called "the court of the second instance") found that the prior art defense was justifiable via on-scene investigation and held in favor of Greater Machinery.

Zetian Machinery refused to accept the judgment of second instance and applied for retrial to the Supreme People's Court. As to the prior art defense, the retrial petitioner, Zetian Machinery, argued that the accused product possessed all technical features of the asserted patent, and several technical features such as the electromagnetic valve in the accused product were different from those of the F45 hydraulic rocker cutting machine in the prior art, so the second instance court erred in its judgment.

The Supreme People's Court set forth the following opinions in retrial.

"The rationale of the principle of prior art defense established in patent infringement litigation is that the scope of protection of a patent right shall neither encompass the prior art, nor be obvious or as an equivalent technique with the prior art. In addition to examining the legal validity of the patent right in the patent invalidation procedure, examining an accused infringer's assertion of the prior art defense in the patent infringement litigation is advantageous for timely resolving disputes, reducing litigation exhaustion of the parties, and realizing unification of equity and efficiency. When the prior art defense is examined, it is the accused technical solution, rather than the technical solution of the patent, that is compared with the prior art. The manner of examining the prior art defense is as follows: comparing an asserted patent claim with an accused technical solution, identifying the technical features of the accursed technical solution that are alleged as meeting the limitations of the asserted claim, and determining as to whether the same or equivalent technical features are disclosed in the prior art. Establishment of the prior art defense does not require that the accused technical solution is exactly the same as the prior art, and any technical feature of the accused technical solution that is irrelevant to the claim scope of the patent right shall not be considered when judging whether the prior art defense is justifiable. Whether the accused technical solution is the same as or equivalent to the technical solution of the patent is not necessarily relevant to whether the prior art defense is justifiable. Therefore, even if the accused technical solution is exactly the same as the technical solution of the patent and different from the prior art, it might be found that the prior art defense is justifiable."

In this case, the independent claim of the asserted patent defines the connection mode of the electromagnetic valve, i.e. "an output of the electromagnetic valve is directly connected to an outer end of the rod piston," and does not define the specific structure of the electromagnetic valve. Therefore, the specific structure of the electromagnetic valve is irrelevant to the scope of protection of the patent right, and hence irrelevant to whether the prior art defense is justifiable. Although the electromagnetic valve disclosed in the F45 hydraulic rocker cutting machine as the prior art comprises three portions, and its specific structure is obviously different from that of the electromagnetic valve in the accused product, however the prior art has already definitely disclosed that the output of the electromagnetic valve is directly connected to the outer end of the rod piston. Accordingly, the Supreme People's Court affirmed that the judgment of the court of the second instance.

The Supreme People's Court further pointed out that,

"In the patent invalidation procedure, the technical solution of the patent is compared with the prior art to examine whether the prior art has already disclosed the technical solution of the patent, i.e. whether the technical solution of the patent possesses novelty and inventiveness as compared with the prior art. However, in the patent infringement litigation, the object of examination of the prior art defense is whether the accused technical solution is the same as or equivalent to the prior art, rather than whether the prior art has already disclosed the technical solution of the patent. Therefore, both their object of examination and legal application are different."

Remarks

We will discuss the differences between the prior art defense and invalidation.

First, the difference in legal status. The prior art defense is a defense to an assertion of patent infringement by arguing that an allegedly infringing product falls into the prior art in a specific patent infringement litigation case, the decision of which is merely applied for the specific patent infringement litigation case. However, the invalidation procedure is to judge whether a patent right is valid, and the conclusion of declaring invalidation of a patent right is to fundamentally cancel the patent right - the patent right declared invalid shall be deemed non-existent from the beginning.

Second, the difference in manners of examination. The manner of examining the prior art defense is based on the comparison between an alleged product and the prior art. And the manner of examining the prior art defense is as follows: comparing an asserted patent claim with an accused technical solution, identifying the technical features of the accused technical solution that are alleged as meeting the limitations of the asserted claim, and determining as to whether the same or equivalent technical features are disclosed in the prior art; any technical feature of the accused technical solution that is irrelevant to the claim scope of the patent right shall not be considered when judging whether the prior art defense is justifiable. However, the determination of novelty and inventiveness in the patent invalidation procedure is made by comparing a patent at issue with the prior art and examining as to whether the technical solution of the patent at issue is disclosed by the prior art.

Last, the difference in standards of evaluation. The prior art defense can compare an accused technical solution with one prior technical solution, or an obvious combination of one prior technical solution and common knowledge in the art. However, the determination of novelty or inventiveness in the patent invalidation procedure can compare the patent with one prior technical solution or an obvious combination of one prior technical solution and other prior art and/or common knowledge in the art. Apparently, the requirements of the prior art defense are more stringent.

How to draft claims with the consideration of prior art defense. In order to seek an assured and reliable protection of a patent right for an invention-creation, the patentee shall draft multiple claims in as many levels as possible to progressively define protection scopes. Although the retrial petitioner in this case alleged that the electromagnetic valve in the patented technique was a particular electromagnetic valve, the internal structure and output of which were improved, however the improvements are not recited in the claims. Therefore, although the specific structure of the electromagnetic valve in the accused product is exactly the same as that of the electromagnetic valve in the patented product and different from the prior art, it is not considered when judging whether the prior art defense is justifiable. If the patentee had further defined the specific structure of the electromagnetic valve in the patented product in dependent claims, it would likely to obtain a totally different outcome.

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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