PATENT LITIGATION IN CHINA

The first Patent Law of new China was promulgated in March 12, 1984(note1), which built the first block of the patent system of China and made an important progress towards the science development and legal management of the country. Since the April of 1985(note2), Chinese courts started to hear cases of patent disputes. The Supreme Court of China had issued an announcement for regulating types of disputes acceptable to courts, jurisdiction, litigation procedure and appointment of competent judges(note3). This is the beginning of the patent litigation in P.R.China. Thereafter, the Standing Committee of the People's Congress of China revised the Patent Law of China in September of 1992 in order to carry out the Chinese government policies of open up and reform, as well as implementing the "Memorandum of IP between US and China"(note4). Chinese legislation body is working on the second revision of the Patent Law of People's Republic of China. It is believed that this second revision is going to follow the three principals adopting good experiences of other countries, fitting the Chinese conditions and adhering to the international treaties. Also, this revision will reflect the needs of China and the principals of the international standards. The patent law and its revision will have great impact on the patent litigation. Besides, the Organizational Law of Court, Civil Procedure, Administrative Procedure and the Judicial Interpretations of the Supreme Court also play very important role in establishing and improving the patent litigation system.

The Chinese patent litigation has a history of only 14 years. However, a patent litigation system with Chinese style has been formed as below:

A.Types of Patent Disputes and Jurisdiction

The Intellectual Property Tribunals(note5) of Chinese court receive 5 categories of cases as below(note6):

1.Patent Administrative Cases. These patent administrative cases are the one that the Reexamination Board or the Chinese Patent Office is the defendant, which includes: dispute on grant of patent, patent invalidation and upholding(note7), and compulsory licensing(note8).

2.Patent Infringement Cases. In these cases, patentee or relevant parties pursue damages against the infringement conduct of the alleged infringer. These cases may include infringement of patent for invention, utility model and design.

Disputes Relating to Ownership of Patent, including disputes regarding patent rights or right for application.

Patent Contractual Disputes, including contractual disputes of assignment of patent right, right of patent application, and patent licensing.

Other patent related disputes, including royalty of compulsory licensing, royalty for using the patented technology at the time between the publication of the application and grant of patent for invention, utility model and design.

Besides, Chinese courts also handle cases of criminal offense on passing off patents. Punishment of passing off patent can be up to 3 years prison and fine. For the cases of passing off patent, the criminal court with jurisdiction will handle them.

From the very beginning, Chinese court has specified the jurisdiction over patent related cases on the basis of international practice and the nature of the patent disputes. Various kinds of dispute mentioned above are assigned to the following courts:

1.For the patent administrative disputes relating to grant of patent, patent invalidation and upholding, and compulsory licensing and its royalty, the Beijing First Intermediate People's Court has the jurisdiction as the trial court because the Reexamination Board of patent and China Patent Office reside in Beijing(note9). The Beijing Higher People's Court is the appellate court for these cases.

2.For the rest kinds of disputes mentioned above(note10), the trial court are Intermediate People's Court(note11) residing in the locality of the corresponding municipal and provincial government in each of the municipalities, provinces, coastal special economic zones(note12), as well as the Intermediate People's Court assigned by the Supreme People's Court(note13). The corresponding Higher People's Court is the appellate court.

Except the above-mentioned jurisdiction, the most happened infringement disputes will also follow the general jurisdiction principal of locality of the civil law, i.e., the Intermediate People's Court of the residency of the infringer (including the locality where the infringing conduct carried out) has the jurisdiction as the trial court(note14).

B.Structure and Organization for Patent Litigation

According to the legislatures of China, the judicial system of China has four levels of courts and adopts two instances litigation for final. The four levels of courts are, District People's Court, Intermediate People's Court, Higher People's Court and the Supreme People's Court. Final judgement will have to be made through trial court and appellate court. Most patent disputes have been ended in the trial court or appellate court. However, there are few cases handled by High People's Court as the trail court due to the huge amount of damages and sever impact to the society. If these cases will appeal, the Supreme People's Court will be the appellate court. According to the law, the Supreme People's Court has the function of making Judicial Interpretation regarding patent litigation as well as the supervision and guiding to the adjudication of each level of People's Courts. If a erroneous judgement is found, the Supreme People's Court has the right to review the case or remind the case to the original court no mater at which level the error was happened(note15).

Within each court, there are tribunals for criminal, civil, economic, administrative, maritime claims, intellectual property, etc. The Chief Judge, judges and assistant judges of the IP tribunal will hear patent disputes(note16). According to law, each panel to hear the patent dispute case will consist of 3, 5, or 7 judges. In the trial court, people's juror who is an expert of law or technology may join the panel with the judge as the presiding judge(note17). However, panel must be consisting of only judges for the appealed cases.

Within each Chinese court, there is an adjudication committee consisting of experienced Judges. These committees will analysis and decide cases with great difficult and complexity. Each year, there will be 1-2 cases submitted to the adjudication committee of Supreme People's Court for discussion. For the cases submitted to the adjudication committee of Supreme People's Court for discussion, it normally has been decided through the panel of judges with a draft of decision. General Director and Deputy Director of each court have the right to submit a case to the adjudication committee upon the proposal of presiding judge of the panel. When the adjudication committee conducts its discussion, presiding judge normally will present the case to the committee, including facts, evidences and proposed judgement. Then, the members of the committee will discuss the case and vote for a final judgement on the basis of minority is subordinate to the majority. According to law, the decision of the adjudication committee is the final judgement of the court on that particular case. The presiding judge of the panel will have to obey the decision of the adjudication committee. The members of the adjudication committee have extensive judicial experiences and legal knowledge. Their decision is of great authority. All the Judicial Interpretation of Supreme People's Court (contents of these Judicial Interpretation are similar to those judicial principals in the case law decision) will have to be discussed and approved by the adjudication committee. All the members of these adjudication committees have made a great contribution to the legal system of China. However, during the reform of legal system of China, there is a trend that the function of such an adjudication committee tends to be lessened. More and more power and responsibility has been shift to the presiding judges when handling cases with difficulty and complexity for the purpose of efficiency. A newly established procedure for correcting cases with erroneous judgement will balance such a trend(note18). Besides, Chinese court has adopted the institution of engaging experts of Intellectual Property Law and technology. Expert from university and researching institutions who has the knowledge of relevant technical field and experiences will be engaged as People's Juror to join the panel to hear the cases(note19). All these measures have enhanced capability of Chinese court on handling difficult and complicated IP cases and the quality of their judgement.

C. General methods used by Chinese Judges in Patent Infringement Cases

Patent infringement disputes are often dealt with by intellectual property judges of China, and are the majority cases among various patent lawsuits. The general methods used by Chinese judges in deciding such type of cases are described below:

(I) Methods on Judicial Procedure

1.Parties concerned shall be notified in advance of the judicial rights they are entitled and the judicial obligations they shall comply with during lawsuits. After a case is accepted by the court, both the plaintiff and defendant shall be notified with a list of judges of the collegial panel, the rights they are entitled and the judicial obligations they shall comply with according to the Civil Procedure Law of China.

2.Conducting pre-trial Exchange of Evidences. While observing the burden of proof on the plaintiff, the parties concerned shall exchange evidences prior to opening of the trial. Thus, parties concerned will understand the bases of judicial pleads and claims between each other, and gain prior knowledge about evidences that are characterized by strong technical nature. On trial, facts and evidences that are disputed among parties concerned shall be verified and cross-examined. Hearings with respect to technical issues and conclusions of technical appraisals shall be held prior to the opening of the trial, so as to ensure quality and efficiency of the trial. The burden of introducing evidences for patent infringement lawsuits is usually following the rules of evidence as stipulated in the Civil Procedure Law of China, i.e. "Those who advance shall introduce evidences". When plaintiff accuses the defendant for infringement of patent rights of the plaintiff, then the plaintiff shall be responsible in the first place for proposing the rights that the plaintiff is entitled and relevant evidence about the patent infringement by the defendant. But it should be noted that, if the patent that the defendant should have been accused by the plaintiff to have infringed is a manufacture process of a new product, i.e. process invention patent, then according to the regulations in Clause 2, Article 60 of the Patent Law of China, reversal of burden of proof shall be implemented for the "manufacture process" that is disputed whereby the party who makes the same kind of product and who is accused of infringement shall be responsible for providing evidences for the manufacture process of such product.

3.The system of collegial panel is implemented. A patent litigation pertains to expertise and technologies of various disciplines, and is characterized by difficulty of trial. Generally, a patent case is tried by a Chinese court according to general procedures as stipulated in the Civil Procedure Law of China, i.e. a collegial panel is formed by several judges for trail of such a case instead of one single judge. All and any judge forming the collegial court shall review and examine the files of the case, participate in the trial and collegial discussion, and jointly understand the responsibility of conclusion of fact and application of law for the case.

4.Public trial is implemented. For any and all patent disputes cases, regardless of the first trial or the second trial, public trial(note20) is implemented whereby the public are allowed to observe, and the media are allowed to interview and report objectively. Such a doing can increase the transparency of the trial and ensure judicial fairness; and can educate and publicize legal knowledge about intellectual property rights to the mass and community, enhance citizen and legal person respect and the awareness of protecting the intellectual property rights(note21).

5.Limitation of Claims of Patent Infringements. The limitation of claims of any patent infringement litigation is two (2) years according to the regulations of the "Patent Law of China" and the "General Principles of the Civil Law of China", starting from the date when the patentee or the interested party knows or should have known about the infringement action. For those continued patent infringement actions, if the patentee fails to investigate within two (2) years after the date when the patentee knows or should have known about such patent infringement actions, and the patent rights of the said patentee are still within the term of protection as stipulated by law, and the infringer is still conducting patent rights infringement actions, judges in China generally make such a decision that the defendant shall stop its infringement actions, whereby the amount of compensation for loss due to such infringement actions shall be calculated for a maximum of two (2) years from the date when the said litigation is submitted by the patentee to the People's Court retrospectively, and the loss due to said infringement actions conducted two (2) years earlier shall not be protected.

6.Suspension of Patent Infringement Trial by the invalidation action file by alleged infringer. While investigating and examining cases of patent infringement actions regarding utility model patents and industrial design patents, once the accused infringer should have filed invalidation to the Patent Re-examination Board of the China Patent Office regarding the validity of the patent rights of the patentee, any court in China shall in general stop the on-going patent infringement litigation, and shall resume the said patent infringement litigation after a decision with respect to the validity of the patent of the patentee is made by the Patent Re-examination Board. But, any appeal that might be submitted by the accused infringer to announce that a patent is invalid should be proposed within the period of submission of defense(note22), and if such appeal should be submitted after the said period of submission of defense, then the People's Court reserves the right not to stop the litigation. For invention patents, since the system of substantive examination is implemented in China, if the accused infringer should appeal to announce that an invention patent is invalid, then the People's Court may choose not to stop the litigation in general.

(II) Facts Finding and Application of Substantive Law

1. For Patent of Invention and Utility Model Patents

Judges of China would adopt the "three steps judgment method" to make conclusions for infringement actions against patents of invention and utility model patents, i.e.:

(i)Determination of the protection scope of patent right. According to the regulations as stipulated in Article 59 of the Patent Law of China, the protection scope of patent of invention or utility model patents shall be based on the contents of claims. Therefore, the claims of a patent shall be the only basis for any judge in China to determine the protection scope of patent rights. According to the regulations of Article 21 of the "Implementing Regulations of the Patent Law of the People's Republic of China", any claims should have independent claim(note23) as well as dependent claims(note24). Therefore, the claims in the infringement judgment as stipulated in the Patent Law of China mean independent claims instead of dependent claims. To facilitate comparison, judges in China would usually divide the independent claims into several relatively independent indispensable technical characteristics. Such a doing would need interpretation of the claims. The legal documents for interpretation of claims are patent specification and attached diagrams. In addition, the file history is also deemed as important reference for interpreting the claims.

(ii)Determination of relevant technical characteristics of products accused of infringement. This means identifying the relevant technical characteristics of products accused of infringement on the basis of the indispensable technical characteristics of the claims.

(iii)Make one to one comparisons between the indispensable technical characteristics of the claims and that of the products accused of infringement. Results of such comparisons may lead to the following situations:1) The indispensable technical characteristics of the claims are entirely identical to that of the accused products of infringement, i.e. the protection scope of the patent rights fully covers the products accused of infringement, or the products accused of infringement completely fall into the protection scope of patent rights, whereby it would be decided by the judge that the said patent has been infringed. Such a patent infringement is the typical patent infringement, and is also called "literary infringement". 2) The characteristics of the products accused of infringement are more than the indispensable technical characteristics of the patent claims, whereby the relationship between the products accused of infringement and the patent could be one between the basic patent and dependent patent. Implementation of the dependent patent by the dependent patentee without permission by the patentee of the basic patent also constitutes patent infringement according to the regulations of the Patent Law of China. 3) The indispensable technical characteristics of the infringed patent claims are more than the characteristics of product accused of infringement. Typically, a judge in China would decide that the patent is not infringed, because the products accused of infringement lack the indispensable technical characteristics as recorded in the patented claims, and have not fallen into the protection scope of the patent rights. Only in extremely special situations would a judge in China decide that the patent is infringed by applying the "Redundant Determination Principle"(note25). 4) The indispensable technical characteristics as recorded in the patent claims are not entirely identical to the characteristics of the products accused of infringement, but the characteristics of products accused of infringement are the equivalents replacement of the indispensable technical characteristics as recorded in the patent claims, whereby the product accused of infringement still falls into the protection scope of the patent rights. In some cases, a judge in China would decide that the patent is infringed by applying the "Equivalents Principle"(note26).

2. Methods of decision of infringement against industrial design patents

There are also three steps for determination of infringement against industrial design patents:

(i)Determine the protection scope of industrial design patent rights(note27). According to the regulations stipulated in Article 59, Clause 2 of the Patent Law of China, the protection scope should be based on the said industrial design patent product as described in the graphics or picture submitted by the patentee to the Patent Office when applying for the said industrial design patent, including front view, top view, side view, etc. The front view is the most important because it can best represent the beauty of the said industrial design patent. Attention should also be given to finding out the various factors that can represent the beauty of the said industrial design patent from these views when determining the range of protection of the industrial design patent.

(ii)Determination on whether the industrials design patent product is the identical or similar products with the product accused of infringement. The methods of determination used by Chinese judges are usually based on the functions and uses of such product, with reference at the same time to classification of relevant commodities by international design classification list (i.e. Locarno Agreement). If the industrial design patent is identical to the product accused of infringement in terms of functions and uses, then it can be decided that both are identical or similar commodities, whereby the following comparison (3) should be made. If both are not identical in terms of functions and uses, then it should be decided that they are not identical commodity or similar commodity, and the steps of decision of infringement should be stopped and it should be decided that the patent is not infringed.

(iii)Comparing the industrial design patent with the product accused of infringement. This means to observe the key portions of the said industrial design patent and the product accused of infringement from the perspective of an ordinary consumer to conduct an overall judgement(note28). One or more of the following results may come up after such comparison: (1) the external design of the product accused of infringement is entirely identical to that of the said industrial design patent, whereby it should be decided that the patent has been infringed because the former falls into the protection scope of the patent rights. (2) important portions of the product accused of infringement are basically identical to the said industrial design patent in terms of external design, both are similar to each other in terms of integrity, it should be decided that the said industrial design patent has been infringed based on the "Equivalents Principle". (3) The external design of the product accused of infringement is neither identical nor similar to that of the said industrial design patent in terms of integrity, it should be decided that the patent is not infringed because the product accused of infringement does not fall into the protection scope of the patent rights.

3.Application of the Estoppel principle. Chinese judges apply the "Estoppel Principle" in patent litigation. Those contents abandoned by the patentee in order to obtain the patent authorization during the patent application process can no longer be used against the party accused of infringement during subsequent patent infringement litigation. The Estoppel principle is a patent infringement judgement principle often used in legal practices.

4.Judgement of contributory infringement. In legal practices, Chinese courts also prosecute legal responsibilities as infringement behaviors against the fact that the actor should manufacture parts or components used for a certain patented product for use by others to manufacture the patented product other than manufacture the whole patented product. The description of the "Contributory Infringement" is not stipulated in the Patent Law of China, but it has been regulated in Article 130 of the "Implementing Regulations of the Civil Law of China" and Article 148, Clause 1 of the "Advices on Some Problems of the Implementing Regulations of the Civil Law of China" that, those who might instigate or assist others to implement the infringement behaviors become contributory infringers and shall undertake joint and several civil liabilities. Important conditions constituting such behaviors include: parts or components made by the actor can only be used to manufacture the patented product instead of other purposes. If the parts or components made by the actor can be used not only to manufacture the patented product but also to manufacture other products, then such a behavior shall not be regarded as infringement. (2) There is existence of direct infringement behaviors, i.e. parts or components made by the actor are indeed used by others to manufacture the patented product. Unless the above mentioned two conditions co-exist, such doings shall not be regarded as infringement. Chinese courts had applied the legal regulations in terms of contributory infringement to handle relevant cases(note29).

5.Calculation of Damages In Patent Infringement Cases. Regarding calculation of the amount of compensation for losses due to patent infringements, the following three calculation methods have been stipulated by the Supreme People's Court as judicial interpretations: (1) the actual economic loss incurred to the patentee due to infringement behaviors is regarded as the amount of compensation against such a loss; (2) The total profit obtained by the infringer through infringement behaviors is regarded as the amount of compensation against such a loss. The arithmetic formula could be expressed as: profit obtained from each piece of infringed product * total number of infringed products sold = infringement profit. (3) A reasonable amount not less than the royalty of patent licensing is regarded as the amount of compensation against such a loss. Moreover, as influenced by legal compensation systems of some countries, the "Fixed Amount Compensation" method is used by Chinese courts for those intellectual property rights infringement cases whose amounts of compensation against losses are difficult to calculated. The magnitude of such fixed amount compensations is normally determined to be between 5,000 yuan and 300,000 yuan, whereby the specific amount should be decided by the People's Court case by case based on the economic value of the patent infringed, duration of the infringement behavior, extent that the patentee is affected by the infringement behavior.

D.Statistics Regarding Patent Dispute Cases and the Challenges Faced by Judges

According to the statistics, Chinese courts have received 5,955 patent dispute cases from January 1, 1993(note30) to June 30, 1999. 5,481 of 5,955 cases have been decided. Among the 5,955 cases, 4,743 are patent infringement dispute with 4,353 decided; 831 are ownership dispute with 570 decided; 554 are contractual dispute of patent licensing with 558 decided(note31). Thus, Chinese courts has punished the infringement, protected legitimate rights of patentees and facilitated the development of the market economy and technology of China.

With the increase of the amount of cases and complexity of the cases filed, defects of laws and legal procedure have been revealed gradually. All of the, plus the judicial reform undergoing in China, Chinese judges are facing many challenges. First of all, it is the adoption of unified applying of laws in patent dispute litigation to maintain the same standard and consistency of applicable laws in patent dispute cases. Some scholars have proposed that the cases decided by Supreme People's Court should have presidency power(note32). Lower courts may cite these cases. Others have proposed that Supreme People's Court should make more detailed Judicial Interpretation as remedies to the laws. Still others have proposed to set up a specialized patent appeal court in Beijing to exclusively handle the appeal cases of patent. Secondly, it is the problem of over long duration of patent dispute case, especially the infringement cases. One of the reasons for the long duration is that the utility model patents and design patents are granted without substantive examination. It is indeed that some of such patents should not be granted. On the other hand, some alleged infringer file invalidation of patent when they were accused of infringing patent right no matter whether they have any merits or not for just taking the advantage of breaking off the ongoing litigation in court. Since the invalidation cases in the Reexamination Board of Patent have already been piled up, the Board could not handle the invalidation cases promptly. Therefore, the litigation in court will have to be delayed again and again. Thus, the market of the patentee may have already gone after an upholding decision of patent issued finally by the Board. Some judges have proposed that the patentee may conduct a search for ensuring the validity of his patent before he files the litigation. Then, patentee may submit the search result when file his complaint in court to avoid the delay during the litigation. Some scholars have proposed that the court should handle both the validity of patent and the litigation in order to be more efficient. Thirdly, whether invalidation or upholding a granted patent is a case in nature of administrative patent case or a civil case? In an administrative patent litigation, should the issues involving both substantive law and procedure law be judged? Is it the responsibility of a judge to examine the patentability? How to define the third parties related to a litigation case? All these questions need to be studied and answered. Fourthly, in a patent infringement litigation, how the judge to define the scope of protection? Whether the principals of "" and "Equivalent" should be applied, and to what extent when applying these principals. How to judge the infringement conduct? How to conduct and evaluate a technical appraisal to solve the dispute on technology between the parties concerned? How to calculate the damages of patent infringement? Chinese judges need to solve these problems urgently.

The global trend of science and technology development has made the world "smaller". With the guidance of numerous international conventions and treaties, as well as the demand of the development of science and technology within each countries, the international cooperation and communication for protecting intellectual property right has become more and more inseparable. One thing I should particularly point out is that the experiences of the judges in the United States of America and Germany have great impact on Chinese judges. This is not only because they have handle many famous patent cases, but also many of them are good friends of Chinese judges with ardently devotion in helping us to improve quality of our work. We, the Chinese judges, are willing to exchange our views on protection of intellectual property rights and learn from other's strong points to offset our own weaknesses. Finally, please allow me to take this opportunity to express my gratitude to the Chairman, the host of this conference and everyone here again.

note1:The Second Meeting of the Standing Committee of the Sixth National People's Congress has passed the "Patent Law of the People's Republic of China" on March 12, 1984. This piece of legislature is the first one of the legislature relating to Patent system since the founding of the People's Republic of China.
note2: The article 69 of the Patent Law of the People's Republic of China stipulates that this Patent Law comes in to force on April 1, 1985.
note3: On February 16, 1985, the Supreme People's Court of China issued an "Announcement on Handling Patent Related Litigations " for implementing the judicial procedures of patent disputes and criminal conduct relating to patent disputes. This announcement specified the types of disputes acceptable to courts, jurisdiction, litigation procedure, and appointment of competent judges and, thus, implemented the Articles relating to patent litigation.
note4: On September 4, 1992, the 27th Meeting of the Standing Committee of the Seventh National People's Congress has passed the "Decision on Revising the Patent Law of the People's Republic of China". This revision has amended the relevant articles which are not in conformity with the TRIPS, i.e., ① extended the patent protection to chemicals and pharmaceuticals per se; ② strengthening the patent right of patentee for providing sufficient protection for their invention; ③ extended the term of patent right; ④ amended the article of compulsory license; ⑤ specified the burden of proof in litigation relating to method patent; ⑥ added the domestic priority; ⑺ replaced the opposition with post-grant revocation; ⑧ stipulated that the amendment to application documents should not go beyound the disclosures of the original specification and claims, etc.
note5: Since 1993, under the guidance of the Supreme People's Court, special tribunals have been established in Intermediate People's Court of municipalities of Beijing, Shanghai, Tianjin, various provinces such as Jiangsu as well as most of the coastal special economic zones for handling IP related cases. In October of 1996, the Supreme People's Court established its own special tribunal for handling IP related cases. All these special tribunals are called Intellectual Property Tribunal.
note6: < >, < > and the Judicial Interpretation of the Supreme People's Court are the basic law for Chinese courts to handling patent related cases. The Judicial Interpretations of the Supreme People's Court are the interpretation on how to applying specific law in handling relevant cases. The highest court of China makes these Judicial Interpretations with the authorization of legislation. All these Judicial Interpretations are legal authorities and published in the Bulletin of the Supreme People's Court.
note7: Since the Beijing Intermediate People's Court received the first patent administrative case against the Reexamination Board of Patent on January 29, 1989 up to December of 1998, this court has received 63 patent administrative cases. 56 of the 63 cases have been decided. Among the 56 cases, 47 cases had the decision in favor of Reexamination Board of Patent, including 30 reexamination cases and 17 invalidation cases. 9 cases had been decided against the Reexamination Board of Patent, including 2 cases of canceling the reexamination decision of the Board and 7 cases of canceling the invalidation decisions of the Board.
note8: The Chinese courts have never received any cases against China Patent Office relating to compulsory licensing since April 1, 1985.
note9: Since the China Patent Law came into effect, the Beijing Intermediate People's Court has the jurisdiction of administrative patent cases. On May 17, 1995, the Beijing Intermediate People's Court was replaced by two new Intermediate People's Courts, i.e., Beijing First Intermediate People's Court and the Beijing Second Intermediate People's Court. Since then, all administrative patent lawsuits have been handled by the Beijing First Intermediate Court because the Reexamination Board of patent and the China Patent Office reside with its geological jurisdiction.
note10: For certain period of time, among the rest kinds of patent disputes, the District People's Court may handle contractual disputes of patent licensing. Starting from the issuance of the <>, this kind of patent licensing dispute are also handled by the Intermediate People's Court as the trial court.
note11: Except Hong Kong, Taiwan and Macao, there are 31 higher People's Courts nationwide. There are 34 Intermediate People's courts locate in the capital of each province and municipality directly under the Central Government. These municipalities directly under the Central Government are Beijing, Shanghai and Tianjin. Each of them has two Intermediate People's Courts.
note12: There are four Intermediate People's Court in special economic zones of Shenzhen, Zhuhai, Xiamen and Shantou.
note13: With the approval of the Supreme People's Court, there are four Intermediate People's Courts with the jurisdiction of patent disputes. There are the Intermediate People's Court of Chongqing, Dalian, Wenzhou and Fushan. Later, Chongqing became a municipality directly under the Central Government. However, its Intermediate People's Court still has the jurisdiction over the rest kinds of patent disputes as it is an Intermediate People's Court residing in the municipality directly under the Central Government.
note14: This kind of court are the court that has the jurisdiction over of patent disputes as mentioned above, such as the Intermediate People's Court in Beijing, Shanghai, etc.
note15: The Law of Court Organization, Law of Administrative Procedure, Criminal Law and Criminal Procedure has all empowered the Supreme People's Court with the right to supervising the adjudication of People's Court at each level as well as the procedure for such supervision. Reviewing a case means that the case is brought up to the Supreme People's Court for litigation. Reminding a case means the Supreme Court order the lower court to retry the case that a wrongful ruling has taken effect.
note16: For a few courts without IP tribunal, a special IP group within economic tribunal will handle patent disputes.
note17: According to Chinese law, the General Director or Deputy Director of a court appoints presiding judge of a panel. General Director of Deputy Director will be the presiding judge himself if he join the panel to hear a case.
note18: During the recent years, many Chinese courts has established a system for pursuing the responsibility of a judge for his misconduct in handling cases in order to ensure the justice and quality of judgement and efficiency. For the damages caused by such a misconduct on the property and personal rights of a citizen or legal person, the court will have to make compensation on the basis of State Compensation Law.
note19: Some Chinese experts name this measure as "technical aid in finding patent infringement". Generally speaking, most judges in deciding patent infringement do not have the knowledge over vast technical field. But, these judges will face often technical questions, including interpretation of claims, defining the scope of protection, deciding the technical features of the alleged infringing product, judging the similarity, etc. All of these will need the assistance and aid of expert from relevant technical field. Normally, Chinese court will conduct a consulting conference, engaging certain institution for making a technical assay, engaging technical expert as People's Juror to join the panel to hear the case.
note20: Parties concerned may request a closed trial if patent disputes are related to technical secrets.
note21: A live broadcasting for the trail of an intellectual property rights infringement case investigated by the No. 1 Intermediate People's Court of Beijing was made by CCTV for nearly four (4) hours on June 11, 1998, which aroused significant response.
note22: According to the Civil Procedure Law of China, the period of 15 days after the next day of the date when the defendant receives the bill of indictment from the plaintiff is the term of submission of defense, during which the defendant may submit the bill of defense in written form to the court.
note23: Independent claims are the technical solution that can reflect an invention patent or utility model patent comprehensively, and the indispensable technical characteristics recorded toward realization of the said invention patent or utility model patent. Independent claims should be written before any dependent claims. The structure of independent claims should be comprised of two portions: preamble and characteristics, these two portions are combined to define the scope of protection for an invention patent or utility model patent. Such a structure can be expressed as: preamble characteristics + characteristics characteristics = protection scope of patent right.
note24: Dependent claims are the added technical characteristics for protection of an invention patent or utility model patent, and offer further limitation for the claims as cited, whose role is to allow the patentee to protect the patent rights against invalidation.
note25: There used to be some cases in legal practices among Chinese judges to decide patent right infringement by applying the "Redundant Determination Principle". However, some experts give criticisms today against such doing of deciding patent right infringement by applying the "Redundant Determination Principle", and think that the results of such doings would lead to that the public and society may not be able to judge what is the protection scope of patent rights and that benefits of the public and society may be harmed. Some case decisions have also aroused many disputes. Therefore, the restriction offered by Chinese courts on the conditions that are suitable for the "Redundant Determination Principle" is becoming more and more strict, in order to prevent abuse of such principle.
note26: It is a common belief among Chinese scholars that, as long as the technical means adopted, functions that are intended to realize, and technical effects that are intended to achieve in a product accused of infringement are the same to that of the patented claim, then the technical means adopted in the product accused of infringement would be regarded as the equivalent replacement for the indispensable technical characteristics as recorded in the patent claims, based on which it can be decided that the patent has been infringed. It is also the belief of Chinese judges that the "Equivalents Principle" is the concrete representation of the fairness principle as stipulated in the "General Principles of the Civil Law of China" in investigating and examining patent infringement cases. This principle is therefore applicable during investigation and trial of patent infringement cases by Chinese judges. The key to apply the "Equivalents Principle" lies in how to determine equivalents. The "Two Questions Method" is often used in the court for determining equivalents. The first question is: When technical characteristics in the product accused of infringement are not identical to that of the patent claims, is it possible for any ordinary skilled person in art to realize such an invention after carefully reading the patent specification, attached diagrams and patent claims without creative working? The second question is: is it true that the functions and effects of the product accused of infringement are identical or basically identical to the functions and effects to be achieved by the technical characteristics as recorded in the patent claims? If the answers to both above mentioned questions are positive, then the technical characteristics in the product accused of infringement that are not identical to those as recorded in the patent claims are equivalent, meaning the patent has been infringed. If the answer to any of the above mentioned two questions should be negative, then it is regarded that both are not equivalent, meaning the patent is not infringed. For example, in a case of patent infringement regarding a utility model patent of gas oven fissure eddy current combustor, the necessary technical characteristics as recorded in the patent claims of the plaintiff include: (1) it is comprised of a combustion body, a shield, and a gas outlet ring; (2) the gas outlet ring mentioned above is circular cone equipped with belt like eddy current fissures. The belt of the eddy current fissures as described in attached diagrams are straight. The product accused of infringement is characterized by: (1) it is comprised of a combustion body, a shield, and a gas outlet ring; (2) ) the gas outlet ring mentioned above is circular cone equipped with belt like eddy current fissures. But, the belt of the eddy current fissures are 45 degrees slanted. Functions and effects: the product accused of infringement is identical to patented product. It was decided by the court of the first trial that, no creative work is needed to change the straight belt of the eddy current fissures of the patented product into a 45 degrees slanted form in the product accused of infringement, meaning equivalents replacement, and it was judged by the court of the first trial that the patented product had been infringed. It was decided by the court of the second trial that, unimaginable technical effects were generated in the product accused of infringement by changing the eddy current fissures into the slanted form, meaning this was not an equivalents replacement, and it was judged by the court of the second trial that the patented product was not infringed. The patentee did not agree with the decision by the court of the second trial and submitted an appeal to the Supreme People's Court for re-trial. The Supreme People's Court agreed with the decision made by the court of the first trial and ordered the court of the second trial to make re-trial.
note27: The so-called industrial design means, according to the regulation of Clause 3, Article 3 of the "Implementing Regulations of the Patent Law of the People's Republic of China", new designs that are suitable for industrial applications due to their inherent beauty as well as the shapes, patterns and colors of the product.
note28: The so-called key portions observation means comparison of key points of portions that can best represent the beauty and comprehensive overall judgement.
note29: In this case, the defendant owned a utility model patent of a kind of "Magnetic Lens Type DC Electric Arc Furnace", whereby the purpose of his invention was to solve the arc skewing problem in then existing DC arc steel smelting furnaces. In the said patent, the "magnetizing coil" is the key part of the device, and is also one of the necessary technical characteristics recorded in the claims of that patent. The magnetic field generated by the magnetizing coil can restrict the electric arc so as to effectively solve the skewing problem of DC arcs. A company from Taiwan expressed the intention to purchase the said patent with 300,000 US dollars. Mr. Wang, plaintiff of the case and the service inventor of the said patent, started, after retirement, to work at an electronic systems engineering company, which is the defendant of the case, as an advisor. The defendant got to know about the situation and started to negotiate with the Taiwan company to allow the defendant to manufacture the key part "magnetizing coil" of the said patented product in mainland China, in order to supply the part to the said Taiwan company for its agent in Hong Kong to manufacture 8 pieces of the "magnetizing coil". The plaintiff, after acquiring about the situation, submitted a litigation which accused the said electronic systems engineering company and the said agent of the said Taiwan company in Hong Kong as the defendant, to an intermediate People's Court, appealing that the defendant stop infringement and compensate his loss. It was judged by the said intermediate People's Court that the defendant did not constitute an infringement because the "magnetizing coil" manufactured by the defendant did not fully cover the necessary technical characteristics of the said patent and rejected the litigation appeal of the plaintiff. The plaintiff, not agreeing with the decision of the first trial, submitted a litigation to a Supreme People's Court. It was then judged by the said Supreme People's Court that the said electronic systems engineering company was involved in manufacture and sales of key parts and components that could only be used in the said patented product for others to reproduce the patented product of the plaintiff, therefore the defendant possessed the subjective intention to assist others to directly infringe and harm the patent rights of the plaintiff, so that constituted contributory infringement against the plaintiff together with the direct infringer. Based on the above statement, the said Supreme People's court decided that: the defendant, including the said electronic system engineering company and the Hong Kong agent of the said Taiwan company, stop infringement behavior and make a compensation of more than 51,0,000 yuan against the economic loss of the plaintiff.
note30: The amended "Patent Law of the People's Republic of China" came into force on January 1, 1993.
note31: The number of decided case higher than that of received case is because there were undecided cases received prior January of 1993. Some of these cases were decided were decided within the period of time the statistic was conducted.
note32: According to Chinese laws, decisions made by People's Court are not case law's secondary authority. Judges cannot cite a previously decided cases even if both cases have similar facts. Judges can only cite laws and regulations. Therefore, cases with similar facts may end up with different judgement by various courts.