ARTICLE
27 November 2024

PurpleVine Released The China Patent Guide 2024

Purplevine IP

Contributor

PurpleVine IP Group, based in Shenzhen, is a China-based and internationally-oriented IP service provider. Founded in 2018, Purplevine currently has 10 offices worldwide with more than 400 full-time employees. We provide full-chain, one-stop IP services that include global prosecution, IP consultancy, IP transactions, licensing, enforcement, and dispute resolution.
Welcome to the 2024 edition of our China Patent Guide, designed to help you navigate the evolving patent landscape in China. Building on our 2022 edition, this guide addresses key issues such as patent enforcement, prosecution, licensing, and recent developments shaping the Chinese patent system.
China Intellectual Property

Introduction

YOUR ULTIMATE GUIDE TO CHINESE PATENT APPLICATIONS AND ENFORCEMENT

Welcome to the 2024 edition of our China Patent Guide, designed to help you navigate the evolving patent landscape in China. Building on our 2022 edition, this guide addresses key issues such as patent enforcement, prosecution, licensing, and recent developments shaping the Chinese patent system. We've also added answers to new questions that are likely to be of interest to you, ensuring you have the latest insights and practical advice. Whether you're protecting innovations or exploring licensing opportunities, this guide will serve as a valuable resource for your patent strategies in China.

Chapter 1

Patent Enforcement

  • Before what tribunals can a patent be enforced against an infringer? Is there a choice between tribunals and what would influence a claimant's choice?

Patent cases in China are typically handled by Intermediate People's Courts, which oversee complex intellectual property (IP) cases. The competent court is determined by the defendant's domicile (where the infringer is located) or the location of the infringement.

Patentees have multiple options to file the case depending on the location and complexity of the case:

  • Specialized Intellectual Property Courts:

These courts, located in regions such as Beijing, Shanghai, Guangzhou, and the Hainan Free Trade Port, exclusively handle IP disputes, including patent infringement. They are particularly suited for invention patents, which often involve complex technical issues. Judges in these courts have significant experience in patent law and technical analysis, making them a preferred option for high-stakes cases.

  • Specialized IP Tribunals within Intermediate People's Courts:

In areas without specialized IP courts, certain Intermediate People's Courts have designated IP tribunals (or IP panels).

These tribunals are found in regions with significant economic or technological activity, such as Shenzhen, Hangzhou, and Suzhou. They handle both invention and utility model patent cases, with judges experienced in IP law.

  • Other Intermediate People's Courts:

In regions without specialized IP courts or tribunals, general Intermediate People's Courts handle patent cases. These courts may lack the technical expertise of the specialized courts, but they have jurisdiction over patent cases in their regions.

Several factors influence the choice of tribunal, including:

  • Judicial Expertise: Specialized IP courts and tribunals typically have judges with more experience in patent law and technical matters, making them ideal for complex cases.
  • Trial Speed: Courts with lighter caseloads can resolve cases faster. For example, the Beijing IP Court, while highly experienced, often has longer delays due to its high volume of cases.
  • Compensation Potential: Certain courts, such as those in Beijing, are known for awarding higher compensation to patentees, but this may come with longer wait times due to caseloads.

Economic Considerations: Courts in economically developed regions may award higher damages, making them attractive for patentees seeking substantial financial recovery.

  • Can the parties be required to undertake mediation before commencing court proceedings? Is mediation or arbitration a commonly used alternative to court proceedings?

In China, mediation and arbitration are both available as alternative dispute resolution mechanisms for patent disputes, but neither is required before filing a lawsuit.

Mediation is voluntary but often encouraged by the courts. It can occur before or during litigation. Some courts suggest pre-litigation mediation, where the parties have one to two months to negotiate before the case is formally accepted. If mediation is successful, litigation can be avoided; otherwise, the case proceeds. Mediation can also take place during litigation, and agreements reached can be formalized with the same legal effect as a judgment.

Arbitration, though less common in patent infringement cases, may be used if stipulated in a prior contract (e.g., patent licenses). Arbitration is more typical in contractual disputes related to patents and offers benefits like confidentiality and faster resolution. However, patent validity issues generally cannot be resolved through arbitration, as they fall under the jurisdiction of the China National Intellectual Property Administration (CNIPA).

  • Who is permitted to represent parties to a patent dispute in court?

In Chinese patent litigation, representation is not limited to licensed attorneys. Lawyers and non-lawyers can represent a party in court under certain circumstances.

  • Lawyers:

Licensed attorneys are the primary representatives in patent disputes. They must hold a valid legal license to practice law in China. While patent agents can represent parties before the CNIPA, they are less involved in courtroom litigation and focus mainly on patent applications and validity disputes.

  • Close Relatives:

Chinese civil procedure law permits close relatives (spouses, parents, adult children, or siblings) to represent a party in court.

This option is more frequently used in personal or small scale cases but is allowed in patent litigation as well.

  • Employees of the Party:

In business-related patent disputes, an employee can represent their company in court. To qualify, the employee must provide proof of an employment contract and social security contributions to confirm their legitimate connection to the company.

  • Recommended Non-Lawyers:

Non-lawyers recommended by certain organizations can represent a party in court. These include:

  • Community Representatives: Citizens recommended by the local community.
  • Work Unit Representatives: Representatives recommended by work unit.
  • Social Group Representatives: Citizens recommended by social groups.

These representatives do not require a legal license, but their appointment must be approved by the court. However, in complex patent disputes, courts may encourage the involvement of professional legal counsel to ensure effective representation.

The court retains discretion to accept or reject non-lawyer representatives, especially in cases requiring significant legal or technical expertise.

  • What has to be done to commence proceedings, what court fees have to be paid and how long does it generally take for proceedings to reach trial from commencement?

To initiate a patent infringement lawsuit in China, the following steps must be taken:

  • File a complaint: The plaintiff must submit a written complaint to the competent court. The complaint should detail the infringement claim, the specific patents involved, and the relief sought (such as damages or injunctive relief).
  • Submit supporting evidence: Along with the complaint, the plaintiff must provide evidence to support their claims, such as patent registration certificates, records of infringement, and expert opinions if technical aspects of the patent need explanation.
  • Power of Attorney: If the plaintiff is represented by a lawyer, a power of attorney must also be submitted.
  • Pre-acceptance Review: The court will conduct a preliminary review to check the completeness of the documentation and whether the case meets the formal requirements for acceptance.

Court fees in China for patent litigation are primarily based on the claim amount (the damages being sought) and are calculated on a sliding scale. These fees are governed by the Measures for the Payment of Litigation Fees. The main components of the costs include:

  • Case Filing Fee: This is a percentage of the claimed amount. If the claim amount is low, a fixed base fee is applied. For example:
    • For claims under CNY 100,000, a fixed fee of around CNY 500-1,000 applies.
    • For claims exceeding CNY 100,000, the fee is a combination of a base fee plus a percentage of the excess amount, generally ranging from 0.5% to 4% depending on the total sum.
  • Other Costs: These include appraisal fees, preservation fees (for asset freezing or evidence preservation), and service of process costs.

The time it takes for proceedings to reach trial in patent infringement cases depends on several factors, including the complexity of the case, the jurisdiction, and the court's caseload. Generally:

Pre-trial Review: After the case is accepted, the court typically schedules a pre-trial hearing to examine the merits and clarify the issues. This process can take around 3 to 6 months from the date of filing.

Trial Date: Most patent infringement cases will go to trial within 6 to 12 months after the lawsuit is filed, depending on the court's schedule and complexity of the case. In some IP courts with heavier caseloads, such as the Beijing IP Court, cases may take longer to reach trial, sometimes extending up to 18 months.

Delays: Factors like mediation attempts, requests for technical appraisals, or the defendant filing for patent invalidation before the CNIPA can extend the timeline.

  • Can a party be compelled to disclose relevant documents or materials to its adversary either before or after commencing proceedings, and if so, how?

In China, broad discovery does not exist as it does in some other jurisdictions. However, recent amendments to the Civil Procedure Law have enhanced the court's ability to compel disclosure at various stages.

  • Before Commencing Proceedings:

Although China lacks formal pre-trial discovery, parties can request pre-litigation evidence preservation if there's a risk that key evidence may be lost or destroyed by the defendant. This tool is often used to secure technical or financial documents prior to filing a case.

  • After Commencing Proceedings:

Once litigation begins, the court can issue an Order to Produce Evidence under Article 112 of the Civil Procedure Law (amended in 2021). If a party refuses without valid reasons, the court can impose sanctions, including adverse inferences or ruling against the non-compliant party. Additionally, evidence preservation orders can be issued to secure documents that might otherwise be destroyed, which is particularly important in IP cases.

  • Exceptions:

Sensitive information, such as state secrets or trade secrets, may be protected under strict controls, with courts allowing only limited or redacted disclosures under confidentiality agreements.

Download the full guide here.

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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