Kelly Yao

What emerging trends do you expect to see shaping the Chinese patent litigation landscape in the next few years?

China’s amended Anti-Monopoly Law came into effect on 1 August 2022. As well as regulating market competition, it also provides fresh options for both sides involved in patent infringement litigation. Patent holders, especially of SEPs, may be encouraged to reach a FRAND licensing agreement to avoid accusations of abuse of IP rights. It is believed that future IP disputes and resolutions will be more complex and changeable.

It used to be frustrating for the plaintiff during infringement litigation because it was unfeasible to collect a defendant’s sales data. However, more and more cases are showing that defendants that refuse to provide such evidence will have to bear adverse consequences.

There will be more court decisions conforming to precedent, especially cases issued by Chinese high courts. This is different from Western case law, as these cases are not intended to introduce a new source of law, but rather to provide references for guidance for courts at various levels.

What aspect of your work do you enjoy most and why?

Everyone at China PAT enjoys communicating with our clients from all over the world, and with authorities in different jurisdictions. We believe that proper communication is fundamental for completing high-quality work and winning clients’ trust. Such communication requires an accurate understanding of their potential concerns. Thanks to our experience handling many thousands of applications, registrations and litigations on the various types of intellectual property, we are able to consistently grasp the needs of our clients, and thus deliver a satisfactory experience to them.

Which recent decisions/legislative developments have had the biggest impact on IP strategy in China during the past few years?

The Chinese Patent Law was amended in 2020 and came into effect on 1 June 2021. This involved many noteworthy changes, especially with regard to industrial designs and drug patents.

This amendment finally accepted partial designs, which can significantly broaden the scope of protection and are indispensable for protecting increasingly popular graphical user interfaces. For foreign applicants that make a first filing with a partial design, instead of reluctantly amending drawings as usual, drawings to be filed in China can remain the same as those in the priority documents. Another welcome change is that the term of protection of a Chinese design patent has been extended to 15 years.

The current Chinese Patent Law has also introduced a drug patent linkage system that provides an early resolution approach for disputes between patented drugs and generic drug makers. Further, an extension of the term of a drug patent is also possible now.

What are your top tips for companies trying to put new products into the market?

To date, there are over 17 million enforceable patents in China. It is always worth conducting an investigation before launching a new product into the market. One may consider revising the product or negotiation of an assignment or licence if a risky patent is found, but this can be impractical or unaffordable. In practice, a better option would be to challenge the patent right. For a granted patent, invalidation can be requested, while for a pending patent application, a third-party observation can be submitted. The desirable result would be invalidation of the patent or a narrower scope of protection, or rejection of the application.

How is invalidation of a patent involved in a patent infringement lawsuit?

Once an infringement lawsuit is initiated, especially in an influential case or a case involving a well-known company, an invalidation request against a patent has become an essential step of the infringement defence strategy.

During an invalidation procedure, the patent holder may have to interpret the scope of protection, which could directly and significantly affect a relative infringement establishment. Strategy formulations are thus crucial for both parties. Drafting invalidation reasoning and responding to accusations from the rights holder should be done carefully depending on technologies, the types of products involved and the different natures of parties on both sides.