China: The Application Of Judicial Appraisal In Patent Infringement Litigation Zhejiang Huali Communication Group Co., Ltd. v. Shenzhen Samsung Kejian Mobile Communication Technology Co., Ltd. (Article No. 17 From "China Patent Case Review 2015" By Beijing

GSM/CDMA Dual-mode Mobile Communication Method

Zhejiang Huali Communication Group Co., Ltd. v. Shenzhen Samsung Kejian Mobile Communication Technology Co., Ltd. - The Application of Judicial Appraisal in Patent Infringement Litigation (Civil Judgment (2009) Zhe Zhi Zhong Zi No.64 by the Zhejiang High People's Court on March 5, 2012)

Appraisal conclusions are professional and technical written evidences provided by appraisal institutes, thus their legality, authenticity, and probative force are usually higher than those of other civil evidences. Especially for patent infringement litigations, the appraisal conclusions are usually one of the essential means to ascertain technical problems, and therefore become an important factor affecting judgment conclusions.

Zhejiang Huali Communication Group Co., Ltd. (hereafter referred to as "Huali Communication") is the sole and exclusive licensee of a licensing contract for exploitation (in which the patentee does not retain any right to exploit its technology) of an invention patent titled "CDMA/GSM dual-mode mobile communication method and communication device thereof" with Patent No. ZL02101734.4 (hereafter referred to as "the involved patent"). Claim 1 of the involved patent is as follows:

"A GSM/CDMA dual-mode mobile communication method, characterized in that:

a main CPU in a main printed circuit board deciding to start a main communication module or an auxiliary communication module, according to a hardware detection determination or a user's menu selection;

a) the main CPU automatically starting the main communication module in the main printed circuit board if there is no auxiliary communication module;

b) if the auxiliary communication module is inserted into the device, the main CPU automatically prompting the user to select a desired communication mode through a keyboard or a specific switch, to start the selected communication module, and the main CPU causing common components and the selected operating module into the selected GSM or CDMA operating mode through a corporation between a power supply switch, an audio switch, an antenna switch and a connector;

c) under a function of a keyboard instruction 'mode selection', the main CPU exchanging data with the main communication module and the auxiliary communication module through the power supply switch, the audio switch, the antenna switch and the connector;

the main CPU exchanges data with the main communication module if the instruction 'mode selection' is a main communication mode; and

the main CPU exchanges data with the auxiliary communication module through the power supply switch, the audio switch, the antenna switch and the connector if the instruction 'mode selection' is an auxiliary communication mode."

Huali Communication sued Shenzhen Samsung Kejian Mobile Communication Technology Co., Ltd.(hereafter referred to as "Samsung Kejian Communication") and DAI Gang (an individual) for manufacturing and selling the infringing mobile phone SCH-W579 before the Hangzhou Intermediate People's Court on April 11, 2007, and requested Samsung Kejian Communication to stop the infringement and pay an economic loss of 50 million Yuan (around USD8 million), and ordered DAI Gang to stop selling the infringing mobile phone.

During the first instance, the Hangzhou Intermediate Court held that the evidences, including patent claims, live demonstration for switching on a physical mobile phone, product description, block diagrams of the radio frequency and the base band of the mobile phone SCH-W579 had clearly demonstrated communication manners of both the involved patent and the mobile phone sued for infringement. Therefore, the court rejected the request by Samsung Kejian Communication for judicial appraisal.

Based on the existing evidence, the Hangzhou Intermediate Court deemed that the technical solution of the mobile phone SCJ-W579 was the same as or equivalent to that of claim 1 and thus falling into the scope of the involved patent right. The Hangzhou Intermediate court held the civil judgment (2007) Hang Min San Chu Zi No.108 on December 19, 2008, ordering Samsung Kejian Communication to stop making and selling the infringing mobile phone immediately, ordering DAI Gang to stop selling the infringing mobile phone made by Samsung Kejian Communication immediately, and ordering Samsung Kejian Communication to compensate Huali Communication with an economic loss of 50 million Yuan.

Samsung Kejian Communication was not satisfied with the judgment of the first instance, and appealed to the Zhejiang High People's Court.

During the second instance, Samsung Kejian Communication put forward an application for judicial appraisal to evaluate the technologies related to the involved patent and the product sued for infringement. The second-instance court held that the technical features of claim 1 of the involved patent were not simple operation steps. Interface demonstration of the mobile phone can only determine the operation steps of the mobile phone, while the same operation steps could be implemented by different technical methods. Therefore, it was necessary to reveal the underlying technical solution of the mobile phone SCH-W579 by technical appraisal from professional technical institute, so as to further determine whether the method of the involved patent was implemented.

The second instance court appointed the Shanghai Technology Consulting Service Center to conduct technical appraisal. Based on the appraisal conclusion, the Zhejiang High Court held the civil judgment (2009) Zhe Zhi Zhong Zi No.64, concluding that the mobile phone SCH-W579 produced by Samsung Kejian Communication did not adapt the patent method owned by Huali Communication, and thus did not infringe the involved patent right. Therefore, the second instance court reversed the judgment of the first instance court, and rejected the appeal by Huali Communication.


Appraisal conclusion plays an important role in patent infringement litigation whose technical solution is very complex, e.g. communication. We will discuss three aspects of appraisal conclusion as follow.

The first aspect is the legal status of appraisal conclusion. Appraisal conclusions per se are not official conclusions that can be used to decide a case, but are written opinions made upon evaluation and determination of specific issues. Having the same status and usage effect as all evidences, appraisal conclusions need to be cross-examined by the opposing party and examined by the judge. Therefore, the wording "appraisal conclusions" was amended to "appraisal opinions" in Article 63 of the Civil Procedure Law of the People's Republic of China effective as of January 1, 2013 (hereafter referred to as the "Amended Civil Procedure Law").

Nowadays, the appraisal institutes are separated from the judicial system, and become separate specific institutes providing paid judicial appraisal services. The concerned party must pay certain fee and provide related materials for the appraisal. Accordingly, the appraisal opinions are not original firsthand evidence, but evidence generated by appraiser upon evaluation of technology and related materials.

The second aspect is the initiation requirements for the judicial appraisal. Samsung Kejian Communication won the second instance mainly because the second instance court allowed its application for the appraisal, and the appraisal institute appointed by the court offered a conclusion beneficial to Samsung Kejian Communication. Therefore, it can be seen from this case that the judicial appraisal conclusions are crucial evidences influencing outcome of a civil litigation.

In the present judicial practice, usually the court makes the decision whether to start a judicial appraisal. Taking the present case as an example, the defendant Samsung Kejian Communication raised an application for appraisal during the court hearing, which need to be permitted by the court. In the author's opinion, the above provision not only breaks the balance between the prosecuting party and the defending party, but also departs from the judicial doctrine of "burden of proof on claimant".

It should be noticed that amendment about the initiation requirement for the appraisal procedure was made in Article 76 of the Amended Civil Procedure Law,1 wherein a party may apply to the court for appraisal. According to this Article, it is a party's right to apply for appraisal, which should be protected by the court.

The third aspect is the judicial examination of the appraisal opinions. In this case, there is only one appraisal opinion, and the court did not conduct strict examination on it. Although Huali Communication questioned the appraisal opinion in the second instance, the second instance court did not accept such a questioning.

In practice, sometimes appraisal opinions per se are not credible, or even questionable. In some circumstances, different appraisal institutes provide contrary appraisal opinions. Therefore, the author is of the view that:

(1) It is necessary to conduct strict examination on appraisal opinions. The appraisal opinions cannot be totally adopted just because they relate to specialized knowledge and technology. Considering their crucial role in a case, the appraisal opinions, as one of many civil evidences, should be examined fully and completely.

(2) The appraiser should appear in court to be questioned. In present practice, the appraisers are not questioned in most cases wherein appraisal opinions are used as evidences. During the trail, the plaintiff and the defendant make argument for their own benefits. The judge makes a judgment as a neutral party, but may lack specialized technical knowledge to understand the appraisal opinion. In this situation, there is no way to interpret the appraisal opinion properly when concerned parties or the judge has any doubt or question about such opinions.

Therefore, the author deems that the appraiser must appear in the court to be questioned for any controversial or doubtful appraisal opinions. The judge should have the right to question the appraiser in or outside the court when there is a problem need to be further explained by the appraiser, even if both parties agree with the appraisal opinions. Only in this way, the reliability of appraisal opinions as effective evidences in civil litigations can be enhanced.

Despite the foregoing, Article 78 of the Amended Civil Procedure Law stipulated that where the appraiser refuses to testify at court, the appraisal opinions shall not be taken as the basis of ascertaining the facts.2 In addition, an expert assistant system is added in Article 79 that it is possible to question the appraisal opinions and find out the facts in a better way.3


1 Article 76 of the Civil Procedure Law recites, "The parties may apply to the people's court for an appraisal as regards a technical problem which is important to ascertain the facts. Where one party applies for the appraisal, both of the parties shall confirm a qualified appraiser through negotiation; if they fail to reach an agreement, the appraiser shall be designated by the people's court.

If the people's court deems it necessary to make an expert appraisal for a problem of technical nature while the parties fail to do so, it shall refer the problem to qualified expert for the appraisal."

2 Article 78 of the Civil Procedure Law recites, "Where the parties have objections to the appraisal opinions or the people's court deems it necessary for the appraiser to appear in court, the appraiser shall give testimonies in court. If the appraiser refuses to give testimonies in court upon notice by the people's court, the appraisal opinions shall not serve as the basis of ascertaining the facts; the party which pays for the appraisal fee may ask for the appraisal fee back."

3 Article 79 of the Civil Procedure Law recites, "The parties may apply to the people's court for calling for an expert in court who can put forward his conclusions about the appraisal opinions made by the appraiser or some technical problems."

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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