Return News

Some Key Rules Set Out in the Latest Supreme Court Interpretations on the Application of China’s Patent Law

Release time:2016-08-05


The Interpretations by the Supreme People’s Court on Several Issues Relating to the Application of Law over Patent Infringement Disputes II (hereinafter as the Interpretations) was promulgated on March 22, 2016 and came into effect on April 1, 2016(Interpretations I was released in 2009). The purpose is to fix various knotty issuesthat exist in current patent litigation disputes, such as lengthy time period, difficulties in obtaining proofs, and insufficient monetary damages. It is expected that the Interpretations will greatly impact the practice of patent litigation law.

The Interpretations focus on providing specific rules for the determination of the infringement as well as of the liabilities of the infringer, in order to ensure the appropriate application of the patent law and give consistency to court decisions. This article will focus on four aspects of the Interpretations: 1) Principles applied to claim construction; 2) The provisions of "indirect infringement;" 3) Exceptions to injunctions; 4) Rules of evidence; and 5) A newly introduced practice of “dismiss and re-file of a lawsuit.”

a.Claim construction shall combine protection for the patentee with certainty for third parties, with more stress on the defining power of the claims


Articles 5 through 12 of the Interpretationsprovide that, the extent of the patent protection is defined by the preamble section of the independent patent claims and all those features relating to product functions, use environment, preparation method, and modifier terms attached to numerical features.

Article 6 states, examination filesof divisional patent applications and effective court decisions can be used to interpret the scope of patent protection. Patent examination files include two types: first, all written submissions made by the patent applicant or patentee in the course of the patent examinations, reexaminations, and validity reviews; second, written documentsissued by the State Intellectual Property Office (SIPO) and the Patent Reexamination Board (the Board), e.g. office actions, minutes of meetings and hearings, effective decisionson requestsfor reviewand invalidation.A point worth noting is the inclusion of meeting and oral hearing records made out the patent administration authorities.

Article 7 focuses onclose-ended claims for composition products. It affirms the past practice of the patent law and the provisions of theGuidelines for Patent Examinationsince 1993.

Article 8 defines “functional feature” and application of the doctrine of equivalents. In assessing whether a functional feature is identical with or equivalent to the patent claim, reference of time shall be the time whenthe alleged infringement occurs. In general, the Interpretations limit the effect of functional features by setting for a stricter standard, “performing the same function and achieving the same result with substantially the same means,”than the general doctrine of equivalentsthat requires “substantially” the same function and“substantially” the same result.

b.Guideline in respect to "Indirect Infringement" leaves room for improvement.


Article 21 of the Interpretations, based on Article 9 of the TortLaw, clarifies two types of indirect infringing acts: first, one who knowingly, and for business purposes, providesto others materials, equipment, parts, intermediates, etc., which have a particularuse for the implementation of a patent; second,one who knowingly, and for business purpose, actively induces others to infringe upon a patent.Regardless thetypesof the indirect infringement, it is not a strict liability tort. Indirect infringement can only arise when the accused indirect infringer has at least some knowledge and intent regarding the patent and the infringement.A patentee also needs to prove direct infringement to establish liability for indirect infringement.

Asdirect infringement is the precondition for establishing indirect infringement, in the case where the end user orreproducer of the patentee’s a technical solution is not for production or business purposes, that individual or entity cannot be held liable for directinfringement; and thus, the inducer or contributor is not liable for indirect infringement either.

c.Exceptions to injunctions put restriction on a patentee’s rights


With respect to injunction, the most common remedy in intellectual property litigation, the Interpretations provide two exceptions in articles 25 and 26 to prevent over-stretch of the patentee’s monopolistic rights.

Article 25, built uponArticle 70 of the Patent Law, and allowscontinuing use of the infringing products by “good faith users”who satisfy the following three conditions: 1) they are unaware that the products infringe upon other’s patents; 2) they can prove the products come fromlegitimate sources; and 3) theycan prove that reasonable consideration has been paid.

According to the previous Supreme Court interpretations released in 2009, “use”may cover the casewhere a product infringing upon a patent for invention or utility model is used as a component or part to manufacture another product. However, selling such other product constitutesas “infringing sale.” Therefore, the “user”under Article 25 of thenew Interpretationsshall only “use,”but not “offer for sale or sell”infringing products to avoid a cease order.

Article 26 provides for the national interests and public interests exception where the defendant(s) may give reasonable compensation to the patentee, without discontinuance of what has been found as infringing acts.

d.The rules of presenting proof in determining the amount of damages are amended to redress difficulty in obtaining evidence and low award of damages.


Article 27 is a highlight of theInterpretationsand a hopeful attempt to solve current problems relating to evidence submission and low compensation in patent litigation.It follows the basic principle that “the burden of proof is on him who claims” but provides forthe transfer of such burden and lowers the standard of proof in special circumstances.

Pursuant to Article27, if actual losses, caused to the claimant, are in dispute and difficult to be determined; claimant has presented preliminary evidence - includes, but not limited to, annual reports, marketing and publicity materials, and online transaction records - that the infringer gained interests from the infringement; and relevantfinancial documents are in the sole possession of the infringer, the court may order the infringer to disclosethese documents. If the infringer refuses to oblige the court order without cause or provides false documents, the court can then calculate the infringer’s gains based on the arguments and evidences presented by the claimant, even ifpreponderance of the evidence has not been met.

e.“Dismiss and re-file” system is introduced to prevent lengthy litigation.


China has bifurcated proceedings for patent litigation.While infringement is determined by the courts, invalidity challenges are heard by the Patent Reexamination Board (the “Board”), but the Board decisions are subject to court review. This often leads to prolonged litigation shuttling between the Board and the court. However, as the chance is small for the court to overturn a Board decision (less than 20% as shown in a 2015 study report),Article 2 of the Interpretationsstates, court may directly dismiss a patent infringement case, if the involved patent is declared invalid by the Board. Should the Board decision be overturned in subsequent judicial review, the claimantcan re-filea lawsuit against the alleged infringer. Though it may help reducing litigation length and costs, new framework in patent legislation is required to better fix the problem.



In addition to the above, other major issues are also covered in response to demands from judicial practice. For instance, Article 13 of the Interpretationsimproves application of estoppels; Article 18 specifiesprovisional protection periodforinvention patents;Article 24 provides for essential patents inrecommendatorynationwide, local, and industry standards; and Article 14 introduces the“design space”concept into the assessment of infringement upon industrial design patents, to adjust the effect of varied attention given to different products by the average consumer.

To sum up, the Interpretationshave addressed some salient issues in current patent law practice and are expected to have profound significance for the future.

By Lifang Patent Team


IP Protection at Trade Fairs in China

It is known by many IP right owners that there are various remedies in China to protect their IP rights, including litigations, administrative complaints, Customs IP protection, etc. This Article aims to introduce another remedy– Exhibition Intellectual Property Protection (EIPP), which may not be so well-known but is more straightforward and efficient for IP right owners. The EIPP provides an easiest and most direct way for IP right owners who can file a complaint with the organizers of such exhibitions claiming for a prominent protection against infringement or passing off.

What is EIPP
The EIPP comes from the Protection Measures for Intellectual Property Rights (Measures) during Exhibitions, which was published and came into force on March 1, 2006. Following the Measures, many local authorities issued their supplemental regulations to implement the EIPP in a more efficient way. The EIPP applies to the protection of patents, trademarks and copyrights in all kinds of exhibitions, trade fairs, expositions, commodity fairs and trade shows (collectively “exhibitions”) concerning the economic and technical trade held in mainland China.

According to the EIPP, the organizer of an exhibition or trade show shall intensify the coordination, supervision and investigation regarding the IPRs protection during the exhibition dates and safeguard the legitimate rights and interests of IPR owners. For an exhibition lasting for at least 3 days, an IP Protection Office (IPPO) inside of the Exhibition place must be set and start working since its first day. The IPPO is composed of personnel from the organizer of the exhibition, the administrative department of exhibition, the local IPRs administrative department in charge of patents, trademarks and copyrights, and performs the functions and duties of IP protection, such as reviewing IPR complaints, investigatingaccused infringing products and exhibitors, and taking necessary actions to stop infringement activities in the exhibition.

Due to the structure of the IPPO, the EIPP is somehow considered as a special model of an administrative complaint during the whole exhibition time, and specializes in its efficiencyand convenience for the IP owners. Below is a brief flowchart of the EIPP.


Flowchart of EIPP










Generally the complaint will be examined and processed in afast way and measures will be taken right after the complaint is accepted. Thus, the IP owner’s rights are protected timely and effectively before the close of the exhibition. 

EIPP in China Import and Export Commodity FairCanton Fair
Since its first opening in 1957, Canton Fair has become the most influentialexhibition in China, with fame of its longest history, highest level, largest scale, most complete kinds of products, broadest distribution and largest business turnoverto overseas buyers. The Fair is held biannually in Guangzhou in spring and autumn. 
Due to its significant influence, more and more Chinese manufacturers attend the Fair, showing, promoting or selling their products to international buyers. However,some products involve infringement or passing-off disputes. In order to protect IP rights, the organizer of Canton Fair has implemented strict EIPP rules to investigate or raid booths of theexhibiters whose products are complained, and has achieved great success. Table 1 below gives a statistic of IP investigations and decisions made by the organizer of Canton Fair since 2010.


Table 1

Canton Fair


Number of IP Complaints

Number of Complained Exhibiters

Number ofinvestigated infringers

No. 113

April 2013




No. 112

Oct. 2012




No. 111

April 2012




No. 110

Oct. 2011




No. 109

April. 2011




No. 107

April 2010




An Example of EIPP Protection
We have represented many international companies to enforce their IP rights in the Canton Fair. For instance, we successfully helped one of our clients, which is a leading appliance company based in UK, protected its IP rights in the Canton Fair.
The companydeveloped a range of novelappliances with a great business success in the world, andapplied forglobal patent protection. In China, it has received tens of design, invention and utility model relevant to its bladeless fans.
The company noticed that productsidentical or similar to its designs and patentshad been sold in Europe, America,Australia and other regions, and that a large percentage of the products were originally made in China. Retained by the company,we thoroughly reviewed the evidence we obtained and took an integrated IP protection tactic of administrative and legal remedies. In view of the fact that the infringing products were made in China and exported to other countries, we decided to take advantage of the EIPP in Canton Fair so as to reduce possibilities that those products were introduced to overseas buyers. We filed complaints and requested the IPPO to investigate infringing products and expel them out of the Fair. This strategy has been proved of great success. Table 2 below shows our achievementsin four consecutive Canton Fairs.
Table 2

Fair session

Infringing exhibitors found

Complaints filed

Infringements confirmed

















Followed up with the EIPP actions, we sentwarning letters to those exhibitors whose infringement activities were confirmed and settled with themwith favourable results to the company. Furthermore, we sued 10 infringers, andevidence acquired through the EIPP actions contributed a lot to our evidence lists.
Via theadministrative EIPP protection and other legal proceedings,the number of infringers declined remarkably andthe company found that infringing products in international markets wereless and less.
Though it is comparatively complicate and takes time to enforce IP rights in China, the IP right owners can think about integrating administrative and legal remedies in order to stop infringing activities efficiently. Because of its efficiency and roles in evidence collection,the EIPP protection shall draw more attention of the owners.

By Lifang Patent Team

manufacture another product, the People's Court shall hold that such act constitutes the use as prescribed in Article 11 of the Patent Law; where such another product is sold, the sale shall be held by the People's Court to constitute the sale as prescribed in Article 11 of the Patent Law.
Whoever manufactures another product by using the products that infringe upon the patent right for industrial design as components and parts and sells the same shall be held by the People's Court to constitute the sale as prescribed in Article 11 of the Patent Law, except that such products infringing the patent right for industrial design only have technical functions in such another product.
Under the circumstances as stipulated in the preceding two paragraphs, if there is division of labor and cooperation between the sued infringers, the People's Court shall hold that such infringers have committed joint infringement.

Copyright © 2020      Lifang Partners    京ICP备09037220号-1      京公网安备11010102000452号