China: Patent litigation
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Injunctions at a glance
|Preliminary injunctions – are they available, how can they be obtained?||If the judgment may become impossible to enforce, the conduct of one party may damage the other party or another compelling reason exists, the court may, upon the request of the party, order the preservation of the property of the other party, specific performance or injunction. In the absence of such request, the people’s court may also, where it deems necessary, order property preservation measures.|
|Permanent injunctions – are they available, how can they be obtained?||There is no specific regulation on permanent injunctions, but the Patent Law, the Copyright Law, the Trademark Law and the Anti-Unfair Competition Law, among similar legislation, have provided for cessation of infringement, which is essentially a permanent injunction.|
|SEP injunctions – are they available, how can they be obtained?||China has no separate legal provisions for SEPs; only the Civil Procedure Law has provided for preservation and preliminary execution. See Huawei v Conversant.|
|Is payment of a security/deposit necessary to secure an injunction?||The applicant shall provide security. If the party refuses to provide such security, the court shall reject the application.|
|What border measures are available to back up injunctions?||The applicant can register their intellectual property at the customs office or directly apply to the customs office for detention of imported and exported infringing goods.|
Q: How can patent owners best enforce their rights in your jurisdiction?
After discovering an infringement, the patentee can file a civil lawsuit before a court, requesting cessation of the infringement and compensation for economic losses, etc. Alternatively, it can file a complaint with or report to an administrative body to request the administrative body to take administrative measures and impose penalties after investigating and verifying the existence of the infringement.
Q: Are mediation and arbitration realistic alternatives to litigation?
Courts and administrative authorities actively advocate mediation between the parties, and almost all cases have corresponding mediation procedures; therefore, the parties could settle their dispute through mediation conducted by a court or an administrative body, especially in patent infringement cases in which the infringer is only a seller. If the infringer is the manufacturer, the two parties may have very different opinions on the amount of compensation, in which case it would be difficult to settle their dispute through mediation.
The Patent Law does not explicitly stipulate that patent infringement disputes can be settled through arbitration; therefore, to date, there is no case precedent regarding resolution of a patent infringement dispute by arbitration.
Q: Who hears patent cases – for example, individual judges, a panel of judges, a mix of judges and technical experts, judges and juries?
Since there are people’s assessors – not juries – in China, patent cases are generally heard by a panel of judges, by a mix of judges and technical experts, or by judges and people’s assessors, depending on the complexity of the case.
Q: What level of expertise can litigants expect from courts?
The courts openly recruit full-time technical investigators from different fields to deal with technical issues encountered in patent cases. For difficult cases, the courts may also recruit and consult experts from institutions such as universities and research institutes to deal with technical issues in patent litigation.
Q: Are validity and infringement dealt with together in proceedings?
The court does not rule on validity in an infringement case; however, if the plaintiff abuses the patent right or there is an obvious defect in the right, the court may reject the plaintiff's claim.
In addition, because the Supreme Court is the court of last resort for both utility model and invention patent infringement litigation and patent invalidation administrative litigation, in some cases in which one patent is involved both in a patent infringement litigation and in a patent invalidation procedure and its corresponding patent invalidation administrative litigation, the Supreme Court may hear the patent infringement case of second instance and the patent invalidation administrative litigation case of second instance at the same time, and deal with the patent validity and the infringement at the same time, to improve trial efficiency and unify case judgment standards.
Q: Who may represent parties engaged in a dispute?
In patent cases, generally a practising lawyer or a patent attorney recommended by the All-China Patent Attorneys Association will appear in court to participate in the litigation, and others cannot represent the parties in the litigation.
Q: To what extent is forum selection possible in your jurisdiction?
District jurisdiction is generally based on the location of the defendant and the place where the infringement occurred. Regarding jurisdiction by forum level, the law clearly provides that, in addition to the IP courts of Beijing, Shanghai, Guangzhou and the Hainan Free Trade Port, the intermediate people’s courts in provincial capital cities can try patent cases.
Q: To what extent is pretrial discovery permitted?
There is no corresponding pretrial discovery process in China. Both parties should provide evidence within the time limit specified by the court. Because of the complexity of patent cases, the time limit for producing evidence is relatively long, but all evidence must be submitted before the trial.
Before the trial, the two parties exchange evidence and issue cross-examination opinions on the authenticity, relevance, legality and probative force of the other party’s evidence.
Q: To what extent is evidence written and oral at proceedings?
According to the Provisions of the Supreme People’s Court on Evidence in Civil Procedures and the Provisions of the Supreme People’s Court on Evidence in Civil Procedures Involving IP Rights, both written and oral evidence can be used in litigation; however, in patent infringement litigation cases, the evidence used by both parties is mainly documentary evidence, and the oral evidence mostly concerns inviting experts to clarify specific issues or is auxiliary evidence for the case.
Q: What role, if any, can expert witnesses play?
A party may apply to invite one or two experts to appear in court to conduct cross-examination of the expert opinions on behalf of the party or propose opinions on the specialised issues involved in the facts of the case, before the deadline for adducing evidence. Opinions put forward by experts on specialised issues in court are regarded as statements of the parties. Experts are not allowed to participate in court proceedings other than in respect of the specialised issues.
Q: Is the doctrine of equivalents applied by courts in your jurisdiction and, if so, what form does it take?
Regarding balancing the publicity of claims and the doctrine of equivalents, the Judicial Interpretation stipulates that the determination of equivalent features must meet the requirements of “using basically the same means to achieve basically the same function and achieve basically the same effect” and “a person of ordinary skill in the art [being able to] think of it without paying creative labour”.
At the same time, the doctrine of equivalents will be limited by the contribution rules, explicitly excluded solutions and background technology solutions, foreseeability rules and the principle of estoppel. In general, the courts are relatively cautious in applying the doctrine of equivalents, and both parties must actively provide evidence for this.
Q: Are there problems in enforcing certain types of patent relating to, for example, biotechnology, business methods or software?
Owing to the rapid development of China’s communications industry, Huawei, ZTE, Oppo and other companies have a relatively large market share, so China has gradually become one of the main battlegrounds for global SEP disputes in the communications industry.
Q: To what extent are courts obliged to consider previous cases that have covered issues similar to those pertaining to a dispute?
Chinese courts generally adopt the principle of the same judgment for similar cases, especially the guiding cases issued by the Supreme People’s Court. The effective judgments of the Supreme People’s Court have a high reference value. Further, a court will often handle similar cases in the same way and will rarely make contradictory judgments.
Q: To what extent are courts willing to consider the way in which the same or similar cases have been dealt with in other jurisdictions? Are decisions from some jurisdictions more persuasive than those from others?
Owing to differences in social and legal systems, the courts generally do not consider cases in other jurisdictions; however, for relatively cutting-edge patent litigation cases, such as SEP-related cases, reference will be made to relevant cases in the United States and Europe.
Q: What realistic options are available to defendants seeking to delay a case? How might a plaintiff counter these?
The defendant can raise a jurisdiction objection to delay the lawsuit, but the effect is limited; the plaintiff can actively communicate with the court and request the court to dismiss it as soon as possible.
Q: Under what circumstances, if any, will a court consider granting a preliminary injunction? How often does this happen?
When evaluating whether to order the respondent to cease a certain action or behaviour, the court will comprehensively consider whether the applicant is the patentee or a stakeholder, the possibility of the respondent’s behaviour constituting infringement, whether the situation is urgent, and whether the legal rights and interests of the applicant may be irreparably damaged if measures are not taken immediately, as well as the balance of damage and the public interest, etc. There are relatively few cases in judicial practice in which a preliminary injunction has been successfully granted by the courts. It is very difficult, and the requirements for the applicant’s evidence are very high.
Q: What is the realistic timescale to get a decision at first instance from the initiation of proceedings?
Since the defendant in a patent case will often file a request for invalidation of the patent, the court will make the judgment after the invalidation decision is made and base it on the invalidation decision to protect the rights and interests of the parties. Given that the patent invalidation procedure generally takes more than six months and because of the complexity of patent cases, judges will spend more time analysing patent cases than other cases, so the first instance of a patent case will take around six to 10 months.
Q: How much should a litigant budget for in order to take a case through to a decision at first instance?
The cost mainly depends on the monetary amount of the subject matter of the case and its complexity. Further, the agency fees charged by lawyers vary greatly. In patent infringement cases, the infringer often files a request for invalidation of the patent, and both parties must entrust an agent to participate, which costs a lot of money. In general, the overall cost for an ordinary patent infringement case will generally not exceed Rmb150,000, whereas the cost for a design patent infringement case will be a little lower.
Q: To what extent are the winning party’s costs recoverable from the losing party?
The losing party in a patent case pays the winning party’s reasonable expenses for rights protection. The reasonable expenses generally include attorney’s fees, notarisation fees and other investigation and evidence collection fees, audit fees, transportation, board and lodging expenses and printing fees for litigation materials. The court reviews the rationality and necessity of the above expenses. Overall, it is possible for all the winning party’s costs to be recovered from the losing party.
Q: What remedies are available to a successful plaintiff?
The defendant must stop the infringement immediately and compensate the plaintiff for its loss and reasonable expenses for defending its rights, including attorney’s fees and notarisation fees. The court may also let the defendant bear a corresponding part of the case acceptance fee, depending on the circumstances of the case.
Q: How are damages awards calculated?
According to the provisions of the Patent Law and related judicial interpretations, the amount of compensation for the damage caused by infringement of the patent right shall be assessed on the basis of the loss actually suffered by the patentee or the profits that the infringer earned through the infringement. If it is difficult to determine the losses that the patentee has suffered or the profits that the infringer has earned, the amount may be assessed by reference to the appropriate multiple of the patent licence fee.
For wilful patent infringement, if the circumstances are serious, the compensation may be calculated as the amount equivalent to more than one time and less than five times the amount calculated by the above methods. If it is difficult to determine the losses that the patentee has suffered, the benefits that the infringer has earned or the exploitation fee of patent licence, the people’s court may award compensation of no less than Rmb30,000 and no more than Rmb5 million, depending on factors such as the type of patent right, and the nature and gravity of the infringing act.
Q: Under what circumstances will courts grant permanent injunctions?
There is no permanent injunction in China, but if the court determines that the defendant’s infringement is established, the infringer must stop the infringement; therefore, in terms of actual legal effect, an order to stop infringement could essentially be considered a permanent injunction. This permanent injunction-like effect will not be achieved until the court’s order to stop the infringement takes effect.
Q: Does the losing party at first instance have an automatic right of appeal?
No. If a party disagrees with a first instance judgment of a patent dispute case, the party has the right to lodge an appeal with a higher court within 15 days of the date on which the written judgment was served. If a party disagrees with a ruling made by a court, the party has the right to lodge an appeal with the higher court within 10 days of the date on which the written ruling was served.
Q: How long does it typically take for the appellate decision to be handed down?
Similar to the first instance trial, during the second instance appeal case, the defendant files a request for invalidation of the patent involved in the infringement litigation case, and this invalidation procedure takes at least six months. The judge assesses the possibility of the patent being invalidated. If the possibility is high, a trial is conducted after the invalidation decision has been made. In this case, the second instance lasts around six to eight months. If the possibility of the patent right being invalidated is low, the judge will hear the case as soon as possible, and the second instance will only take three months at least.
Q: Is it possible to take cases beyond the second instance?
A party can apply for a retrial within six months of the date on which the second instance judgment takes effect, under any of the following circumstances:
- the main evidence for determining the facts in the original judgment or ruling was insufficient;
- there is new evidence sufficient to overturn the original judgment or ruling;
- the people’s court violated legal procedures, which may affect the correct judgment or ruling of the case;
- the application of law in the original judgment or ruling was wrong; or
- the judicial officer was involved in corruption, bribery, malpractice for personal gain or perversion of the law when trying the case.
Q: To what extent do the courts in your jurisdiction have a reputation for being pro-patentee?
Chinese courts emphasise the protection of scientific and technological innovation; therefore, on the premise of neutrality and objectivity, when hearing patent cases, the courts are more inclined to protect the rights and interests of patentees. In particular, amendments to the Patent Law have introduced a punitive damages system, which will curb intentional patent infringement to a greater extent and will also greatly promote the transfer and licensing of patent rights.
Q: Are there other forums outside the court system in which it is possible to assert patents in your jurisdiction? If so, under what circumstances might it be appropriate to use them?
The patentee can request the administrative authority for patent affairs to handle patent infringement disputes. However, the administrative authority cannot judge whether patent infringement has occurred; it can only punish the infringer. Further, the patentee would have to conduct additional litigation to obtain compensation; therefore, few patentees resolve patent infringement issues through administrative means.
Q: In what circumstances do courts in your jurisdiction accommodate remote hearings, for example during pandemic-related lockdowns?
In recent times, most second instances of patent infringement litigation cases, the oral hearings of patent invalidation cases, and the first and second instances of patent invalidation administrative litigation cases have been tried remotely. According to the latest information, remote hearings should continue to be a trend in the future, even if the lockdown-related restrictions are relaxed.
Q: Are there any other issues relating to the enforcement system in your country that you would like to raise?
In the latest amendments to the Patent Law, the upper limit of statutory compensation has been raised to Rmb5 million, and clear provisions on punitive damages have been provided. There have also been many reference cases regarding punitive damages, so the patentee can actively provide evidence and may obtain higher compensation.