Patent Protection in China 中国的专利保护

Patent Protection in China 中国的专利保护

Why file patent application in China Advantage Low Application fee with a huge geographic market Invention patent 950 RMB; (Maintaining fee: 300 per year)Substantial examination for Invention patent: 2500 RMBUtility model & Design 500 Disadvantage (a market not for everyone) Finding reliable and skilled Chinese patent attorneys 4500$ per Patent for translation and filing? 2000$ per mark? When product can easily be copied and where fixed costs of equipment represent a low barrier When you can effectively keep yr invention secret during its exploitation

Fee to Maintain a Patent (RMB)

Exclusive right of patent After the grant of the patent right for an invention or utility model, except where otherwise provided for in this Law, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, and use, offer to sell, sell or import the product directly obtained by the patented process, for production or business purposes. After the grant of the patent right for a design, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, offer to sell, sell or import the product incorporating its or his patented design, for production or business purposes.

Patent litigation in China Over 4,000 new patent infringement cases were filed with Chinese courts in each of 2007 and 2008. About 5 percent involved Western companies. In most of those cases, Western companies have won. Most patent litigations in China involve a patent infringement lawsuit before a specialized IPR tribunal of an Intermediate Court and a patent invalidation proceeding in the Patent Re-examination Board (PRB) of the State Intellectual Property Office (SIPO).

Court System : " four levels and two instance of trials" http://www.olemiss.edu/courses/pol324/chnjudic.htm Basic People's Court Intermediate People's Court Higher People's Court Supreme People's Court Special courts: military courts, railway courts and maritime courts

Patent Court System In which courts are patents enforced? Are they specialized patent courts? There have been no specialized patent courts handling patent relevant cases. First Instance: 70 intermediate Courts (在70个中级法院进行一审) (intermediate Courts in capital + special designated by Supreme Court) – Appellate Patent Court System in China 中国的专利上诉法院体系 Second Instance: 31 High Courts at provincial, municipal and autonomous region levels

Issue and Solution Identical patent issues can result in many possible different outcomes 相同的专利问题可能会产生许多不同结果 – One court decides invalidity - another court decides infringement ? 一个法院判决专利无效，而另一个法院判决侵权 Solution 解决方案 Establish Centralized Appellate Court for Patent Cases 建立集中的专利上诉法院

To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down in similar cases? Not a Common Law System, precedent (stare decisis) has no binding effect National Laws and its regulation: Patent Law; Implementing Regulation of the Patent Law Civil Procedural Law; Administrative Procedure Law Judicial Interpretation: 2009 Infringement of patent right 2004 Criminal cases involving IPR 2002 Standard of proof in civil procedure law 2001 Application of law to infringement of patent right 2001 Pre-trial injunctions on acts of patent infringement Rules Guidelines for examination issued by the State IP Office (SIPO) International Conventions and Treaties ( have priority over national law) Paris Convention Patent Co-operation Treaty TRIPs??? Source of Law

Parties to litigation Patent holder and successor Exclusive licensee Non-exclusive licensee: jointly with patent owner; or independently if… Distributor Evidence supported Does a licensee need to be registered to sue? An alleged infringer can bring a law suit to obtain a declaratory judgment on non-infringement Possible to add or subtract parties during litigation

Representative and language Who can represent parties b/4 the SIPO and Courts handling patent validity issue and litigation ? Chinese person; Lawyer; Patent attorney Before Re-examination Board: only Patent attorney The language of the proceeding: Only Chinese To what extent are court willing to grant cross-border and extra-territorialinjunctions? - Negative Other preparation: Where the patent infringement relates to a patent for utility model or design, the people's court or the administrative authority for patent affairs may ask the patentee or an interested party to furnish an evaluation report of patent right which is made by the SIPOafter conducting a search, analysis and evaluation for the related utility model or design, as the evidence to judge or handle patent infringement dispute. (Patent Law Art. 61, sec.2)

Separation of handling Infringement and Invalidity Do the courts deal with infringement and invalidity simultaneously? Patent infringement and invalidity are prosecuted in separate proceedings. Invalidity actions must be filed with the Patent Re-examination Board (PRB) in SIPO. Party unsatisfied with the decision by PRB may appeal to the Beijing No.1 Intermediate People’s Court, and then Beijing Higher Court

How is patent infringement accessed in China Three-step process 1. Determine the patent protection scope. The terms of the Claim – Description and drawing The independent claim outlines the maximum protection scope and every technical feature incorporated in the independent claim shall be considered to be necessary to settle any technical issues. 2. Determine the relevant “technical features” of the allegedly infringing product and then compare those technical features with those concluded from the patent 3. Established the existence of infringement, including literal infringement and infringement based on the doctrine of equivalents. Two principles to determine whether infringement exist:FULL-COVERAGE and DOCTRINE OF EQUIVALENTS.

FULL-COVERAGE & DOCTRINE OF EQUIVALENTS The full coverage principle means the alleged infringing article (product or process) reproduces and shares every necessary technical feature of the patent. If one or more features are different and does not constitute an infringement through full-coverage principle, the doctrine of equivalents may be applied. If the different technical features just use substantially identical means to achieve substantial the same functions and results as claimed in the patent, and any ordinary technical person skilled in the art is able to foresee such features without carrying out any creative works, the a equivalent infringement can be established. For design patent: customer should be the assumed person to tell whether the alleged design similar to design patent.

A; AC B; BC Scope of comprising A+B AB ABXYZ ABW Scope of comprising A+B+C ABC ABCXY ABCXYZ

Defences used by an alleged infringer (0) Jurisdiction defense. Patent infringement cases must be filed where the infringer is domiciled or in the place of infringement. Places of infringement include not only the places where the infringing acts actually have occurred but also any place affected by the consequences of infringement. To avoid litigation in a defendant's home court, plaintiffs may wish to join distributors of the infringing product located in jurisdictions more favorable to the plaintiffs as additional defendants.

Defences used by an alleged infringer (1) Affirmative defences by challenging the validity of the patent Require the court to suspend the legal proceeding by commencing the invalidation procedure against the patent with PRB

Invalidity On what grounds can a patent be invalidated? 1. Contrary to the laws of the State, social morality, public interest; 2. Does not possess Novelty, Inventiveness or practical application; 3. Description fail to disclose the invention sufficiently clear and complete to enable replicate 4. The claim does not supported by the description; or claim not clear 5. The amendment during the patent prosecution go beyond the scope of the original disclosure 6. Not conform with the principle of “one invention one patent right”

Invalidation Case: Pfizer’s Viagra In 1994, Pfizer Inc. filed a patent application for Viagra with the State Intellectual Property Office. On September 19, 2001, Pfizer was granted with the patent right for Viagra. Then 12 Chinese companies, who believed that viagra did not involve creativity, jointly filed an application for patent invalidation to the PRB. In July 2004, the PRB decided that the patent for viagra was invalid, for the description of the patent was not sufficiently disclosed.

In September 2004, Pfizer institute a proceeding against the PRB and the 12 Chinese companies were listed as the third party. In June 2006, the Beijing 1st Intermediate People's Court ruled that the description of Pfizer's patent had included experimental data and the decision made by the PRB should be revoked. After the first instance judgment, the 12 Chinese companies appealed to the Beijing Higher People's Court. On October 27th 2006, the Beijing Higher People's Court maintained the first instance judgment. The court revoked the decision made by the PRB, in which the patent for viagra was invalidated. According to the court, the PRB made a factual mistake by stating that there was lack of clear relation between the curative effect and experimental data.

Defences used by an alleged infringer (2) 2. Response based on statute of limitation Two years from the date the plaintiff became aware of, or should be aware of the infringement unless the infringing act is still ongoing. If the plaintiff misses the time limit, it will lose the rights to pursue the claim.

Defences used by an alleged infringer (3) 3. Response based on Prior Art If the technical features of the alleged infringing article are identical with the prior art or can be deduced from the prior art without carrying out any creative works for the technical person skilled in the arts, the infringement cannot be established.

Defences used by an alleged infringer (4) 4. Response based on the presumption of non-infringement (Exceptions) Exhaustion of the patent right Where, after a patented product or a product that was directly obtained by using a patented process was sold by the patentee or anyentity or individual with the authorizationof the patentee, any other person uses, offers to sell, sells, or imports that product

Right of prior use Where, before the date of filing of the application for patent, any person who has already made the identical product, used the identical process, or made necessary preparations for its making or using, continues to make or use it within the original scope only; Scientific research and experimentation Where any person uses the patent concerned solely for the purposes of scientific research and experimentation. Bolar Exception Where any person manufactures, uses or imports a patented medication or a patented medical apparatusfor the purposes of providing the information needed for the administrative approval, and any person manufactures, imports or sells a patented drug or a patented medical apparatus solely to the said person.

Temporarily Passing through China Where any foreign means of transport which temporarily passes through the territory, territorial waters or territorial airspace of China uses the patent concerned, in accordance with any agreement concluded between the country to which the foreign means of transport belongs and China, or in accordance with any international treaty to which both countries are party, or on the basis of the principle of reciprocity, for its own needs, in its devices and installations Non-intentional act Any person, who, for production and business purpose, uses, offers to sellor sells a patent infringement product made and sold without the authorization of the patentee, shall not be liable to compensate for the damage of the patentee if he can prove that he obtains the product from a legitimate channel.

In October 2008, Microsoft was sued by China E-Commerce Info-Tech Co. Ltd. for patent infringement at Xi’an Intermediate Court over Chinese invention patent ZL200510022721.3 relating to RSS information exchange. Patent litigation

In April 2007, Samsung was sued by Holley Communications Co. Ltd. for patent infringement at Hangzhou Intermediate Court over Chinese invention patent ZL02101734.4 relating to CDMA/GSM dual mode mobile communication devices. Patent litigation

Patent litigation In June 2006, a Chinese subsidiary of France-based Schneider Electric was sued by the Chint Group for patent infringement at Wenzhou Intermediate Court over Chinese utility model patent 97248479.5 relating to a miniature, low voltage circuit breakers. During the first instance Schneider tried to invalidate Chint’s patent at SIPO’s Patent Reexamination Board. The Board amended some of the claims but unheld the patent. Key issue: before patent law amendment 2008, only prior art use in China can invalidate a utility model patent. (Junk-patent based on products that have been used abroad) In September 2007, the Wenzhou court issued an injunction against Schneider Electric and awarded RMB 334.8 million ($49.2 million) in damages to Chint. Schneider Electric appealed to Zhejiang Province High Court. Before the appeal was concluded,on April 15, 2009, Schneider Electric and Chint announced a global settlement under which Schneider Electric agreed to pay Chint RMB 157.5 million ($23 million).

Advices 1. All Chinese Courts are Rocket Dockets! The usual time frame for resolution of a patent dispute where both parties are incorporated in China is six months from the filing of the complaint until the first instance trial. It takes only three months for the appellate court to hear an appeal. ensure that you are able to respond quickly to litigation! (record-keeping and evidence gathering)

2. Do Not Wait to Be Sued A party concerned about a potential patent infringement lawsuit by a competitor should consider declaration of non-infringement action and patent invalidation action to preempt the first-mover advantage of the patentee.

3. Do Not Look Down on Utility Model Patent and Design Patent Remarkable economic value ? A robust portfolio of utility model and design patents should be built alongside an invention patent portfolio to fully utilize the potential of the patent system in China.

Patent Protection in China 中国的专利保护