Trial of Patent Cases

In Shanghai Intellectual Property Court

(2017-2018)

Innovation is the No.1 driving force for development. With the improvement of innovation capability and the rise in R&D investment in China, innovative entrepreneurs have a stronger demand for judicial protection of patents. Shanghai Intellectual Property Court (SIPC) gives full play to its judicial function, strengthens the judicial protection of patents, and actively innovates the judicial mechanism, thereby providing strong judicial guarantee for creating a favorable environment for the developmentof innovation, entrepreneurship and invention. To improve the ability and level of patent creation, protection and application across the whole society, SIPCsummarizesitstrial of patent cases from 2017 to 2018, organizes and analyzes the problems found during the trial, and makes corresponding suggestions.

I. Overview of the trial of patent cases

From 2017 to 2018, SIPCaccepted 1,074 patent cases in total, up 6% from 2015 to 2016, of which 459 were accepted in 2017 and 615 in 2018. A total of 1,127 patent cases were concluded, up 72% from 2015 to 2016, of which 485 were concluded in 2017 and 642 in 2018 (see Fig. 1). In those concluded, 334 cases,or 29%, received a judgement; 688, or 61%, were withdrawn or mediated; 64,or 6%, were dismissed; 41,or 4%, were closed by other means (see Fig. 2).

Below are the characteristics of patent cases:

(1) High proportion of infringement cases

882 cases over infringement of patent rights were accepted, accounting for 82% of the total patent cases accepted. Among them, 241 concern the infringement of inventions, 223 the infringement of utility models and 418 the infringement of designs. 79, or 8%,are over patent ownership and the right to apply for patent; 55,or 5%, are over patent contracts; 58, or 5%, areover patent disputes (see Fig. 3).

(2) Significant increase in disputes over job-related inventions

The number of cases over job-related inventionsaccepted has been increasing year by year. From 2015 to 2016, 57 cases of this kind were accepted; from 2017 to 2018, 87 were accepted, up 53% from the previous two years. Among them, 35 were accepted in 2017 and 52 in 2018, mainly due to disputes between employees and employers caused by patent ownership or reward and remuneration.

(3) Increased number of cases over emerging technologies and cases of new types

A number of patent cases involving communications technology, biomedicine, mobile phone chips and other emerging technologies were accepted. For example, the case of Siemens vs. Zhuhai Meizu Science and Technology Co., Ltd. overthe infringement of invention concernsthe standard and necessary patents in communication technologies; the case ofMedivationvs. Guilin Pharmaceutical Co., Ltd. overthe infringement of invention concerns pharmaceutical patents; the case ofSilead Inc.vs. Shenzhen Goodixover the infringement of invention concernspatent for biometric sensors. In addition, a number of new types of cases were also accepted. For example, the case of Hangzhou Lute Construction Machinery Co., Ltd. vs. Shanghai Wanchao Automobile Skylight Co., Ltd. requesting confirmation ofnon-infringement of patent;the case of Shenzhen Jooan Technology Co., Ltd. vs.Zhanget al. over liability for damage caused by maliciously filing suit over intellectual property rights;the case of Changshu Inforay Technology Co., Ltd. vs. Sam Electric Appliances (Nantong) Co., Ltd. over liability for damage caused by applying for interim measures of intellectual property rights.

(4) New features of foreign-related cases

164 foreign-related patent cases were accepted. The parties involved,including Philips, Brent, Volvo and other world-famous companies, are from a dozen of countries such as the United States, Japan, Sweden and Germany. There are two new features in foreign-related patent cases: one, in some cases, the patentee and the manufacturer of the allegedly infringed products are foreign enterprises, only the seller is a domestic enterprise; two, the patented technology involved is rather complex, including the frontier technologies such as gene detection, communication technology, 3D printing and biomedicine.

II. Major Practices in the Trial of Patent Cases

To solve the problems including “the difficulties to get evidence of infringement, the long period to get protection for patent, and the low remedies awarded”complained by the patentee, SIPC has taken multiple measures to improve the trial mechanism, innovate trial thinking, guide patentee to enhance the ability to initiate litigation, and strengthen the crackdown on malicious and repeated infringement.

(1) Protect procedural rights

To solve the“difficulties to get evidence of infringement”complained by the patentees, SIPC has applied various procedural systems according to law to protect the patentee’s procedural rights. One, take preservation measures according to law. Because of the patentee’s application, SIPC has implemented for many times evidence preservation for the allegedly infringed products in exhibitions and other places. From 2017 to 2018, the court implemented 20 pre-litigation evidence preservations and 52 mid-litigation evidence preservations to reduce the burden of proof of the patentee. For example, in the case over infringement of invention filed by Oerlikon Textile GmbH & Co. KG, based on the patentee’s application, SIPCseized theallegedly infringed large mechanical equipment on exhibition topreserve the evidence. Two, support the application for a search warrant. Given that some evidence is held by a third party and is inaccessible to the patentee, SIPC, upon the patentee’s application, issues a search warrant to its attorney, which enables the patentee to obtain the transaction records of the allegedly infringedproducts from a third party such as the online transaction platform. That helps thepatentee a lot when submitting evidence for compensation. For example, in the case over infringement of design brought by Royal Dutch Philips Electronics Ltd., SIPC issued a search warrant to the plaintiff’s attorney to collect the transaction records from the defendant’s online store, which gave an exact transaction amount of the infringed products, so the court fully supported the plaintiff’s claim of RMB 300,000. Three, reasonably allocate the burden of proof. If the evidence is indeed under the control of the infringer and is closely related to the trial of the case, the infringer shall be ordered to submit relevant evidence. For example, in the case over infringement of invention filed by Mitsubishi Electric Co., Ltd., SIPC ordered the defendant to submit financial accounts, sales records and tax vouchers which are useful to the calculation of compensation amount, identified the actual sales of the infringed products and awarded a compensation of RMB 1.16 million.

(2) Innovate the working mechanism

As for“the long period to get protection for patent,” SIPC has been constantly optimizing the working mechanism to improve the efficiency of trial. One, apply a diversified technical fact-finding mechanism. The technical fact-finding mechanism, which includes technical investigation, technical consultation, expert jury and technical appraisal, has played an active role in patent cases. For example, from 2017 to 2018, technical investigators completed technical consultation, preservation and investigation and appeared in court for more than 200 times, which was a great help to the judges in hearing technical disputes. In the case over infringement of invention filed by Canon Inc., the technical investigator gave his review opinion on whether the allegedly infringed product falls into the scope of patent protection, assisting the judge to identify the infringement facts. Neither the plaintiff nor the defendant appealed after the judgment. Expert jurors participated in the trial of 121 patent cases. In the trial of many cases involving machinery, biomedicine and other specialized fields, the expert jurors used their technical expertise to accurately identify the technical facts for the patent involved. Two, apply the advance judgment mechanism according to law. In patent infringement cases, SIPC has attempted to make an advance judgment on the infringement facts that have been identified, so as to stop the infringement in time and safeguard the legitimate rights and interests of the patentee. For example, in the case over infringement of invention filed by Valeo Systèmes d’Essuyage, SIPC made an advance judgment on the infringement facts that had been identified and ordered the defendant to stop infringement immediately. The IP Tribunal of the Supreme People’s Court upheld the original judgment at the second instance. Three, give full play to the role of a diversified dispute resolution mechanism. SIPC has leveraged on the professional mediation organizations and trade associations to ensure the rapid and efficient resolution of patent cases. For example, in the 31 cases concerning the disputes over patent agency contracts filed by Evergreen Home Products Co., Ltd. Ningbo, SIPC entrusted the People’s Mediation Committee of Intellectual Property Disputes in Pudong New Area to mediate during litigation. Finally, the case was successfully settled with the plaintiff and the defendant reaching a package of mediation agreements and performing them in court.

(3) Strengthen protection

As for the “the low remedies awarded”complained by patentees, SIPC has made great efforts to establish a compensation mechanism which could help realize the patent value, and used various ways to calculate the compensation for damages, thereby effectively relieving the situation of “high legal cost and low infringement cost.”One, award high remediesfor malicious and repeated infringement. For example, in the case over infringement of utility model filed by Shanghai Ali-baby Infant Articles Co., Ltd., the defendant did not stop the production and sale of the infringed infant diet trainers after being warned by the plaintiff. Subjectively, subjectively it was malicious infringement and the infringed products were sold on a large scale. Therefore, SIPC fully supported the plaintiff’s claim of RMB 300,000. Two, entrust a third-party audit institution to identify the gains of infringement. For example, in the case over infringement of invention filed by Honda Motor Co., Ltd., the sales profit of the infringed products was calculated by a third-party audit institution, based on which SIPC ordered the defendant to compensate the plaintiff for an economic loss of RMB 2.4 million. Three, fully support reasonable legal expenditures. SIPC guarantees that the patentee shall be supported for the legal cost by considering the actual situation of the trial and the lawyer fees and the notarization service fees on the market. For example, in the case over infringement of invention filed by Nanjing Ecoway Energy Technology Co., Ltd., the plaintiff’s claim of fees for paying the lawyer, the infringed products and the notarization is reasonable, so SIPC fully supported the plaintiff’s claim of the reasonable expenditure of RMB200,000.

III. Major Problems Found in the Trial of Patent Cases

(1) Lack of legal awareness of patents

One, dealers sell commodities without legal origin. In patent infringement cases involving furniture, daily necessities and spare parts, the dealers are often found selling commodities with no indication of the producer’s information and they are unable to prove the source of such commodities, hence the accusation of infringement. Two, there is no clear agreement on the ownership of the job-related technical achievements. In the labor contract, the labor service contract or the technology development contract entered into between the employer and the employee, there is no or unclear agreement on the ownership of the job-related R&D achievements made by the employee and of the inventions and creations accomplished by the employee leveraging the material and technological conditions of the employer, which is likely to cause disputes. Three, the parties concerned fail to perform the contract accordingly. In the disputes concerning patent licensing contract and patent agency contract, default of patent licensing fee and patent service fee is common.

(2) Lack of awareness of risk prevention

One, enterprises do not pay attention to theexamination ofthe patent certificate. When purchasing patented products, some enterprises do not require patentee to provide the certificate, which leads to the risk of infringement. Two, enterprises cannot provide sufficient R&D materials. Claiming that the patent applied for by a former employee is job-related invention, the enterprise can only provide a little evidence for the R&D process of the technology involved, which leads to a disadvantageous position in the lawsuit. Three, enterprises do not manage properly. Some enterprises just lend POS machines, receipts and invoices freely, which causes them to be sued by the patentee as the seller of the infringed product, facing the risk of assuming liability for infringement.

(3) Lack of awareness of proper litigation

One, inadequate preparation for litigation. Before litigation, some patentees are not well-prepared in comparing the technical features, knowing the sale of the allegedly infringed products, and providing evidence for damages, which may lead to a lengthy litigation and the disempowerment of evidence. Two, improper choice of claims. The request for rights and the applicable calculation method for damages claimed by some patentees are inappropriate, or do not correspond to the facts that can be proved by their evidence, resulting in their claims cannot be supported by the court. Three, uncooperative attitude towards response. Some defendants would refuse to sign and receive litigation materials, refuse to communicate when they are contacted by the court, and refuse to appear in court by summons; some defendants do not defend according to law or do not actively collect relevant evidence, resulting in negative consequences.

IV. Suggestions

(1) Enhancing legal awareness of patents

The fundamental purpose of the patent system is to stimulate innovation. Only when patents are effectively protected can the patent system promote innovation. First, enterprises should organize trainings on studying the patent law, improve their identification ability in business activities, and resist infringed products by not manufacturing, purchasing or selling infringed products. Second, enterprises should strengthen the cultivation of legal awareness of patents, improve the internal R&D management system, guarantee the legal rewards and remuneration of inventors, and make independent innovations without plagiarism or counterfeiting. Third, enterprises should abide by the terms of the contracts and fulfill the rights and obligations stipulated in the contracts on patent transfer, patent licensing and patent agency. They should also avoid lending the POS machines, card switchers and other receiving terminals or receipt and payment vouchers at will, so as to reduce the risk of infringement accusation.

(2) Paying attention to the management and application of patents

Innovation and creation are indispensable to the vigorous development of enterprises. Patent system protects the innovation of enterprises. First, enterprises should attach importance to the creation of patents. Enterprises should actively explore patents, encourage patent applications for R&D achievements, and improve the quality of patents. Second, enterprises should strengthen the management of patents. Enterprises should pay patent fees in time, arrange special persons to manage the patents, and establish a patent early warning mechanism. Third, enterprises should standardize the transformation and application of patents. Enterprises should identify the ownership of technological achievements in technical cooperation development contracts, and go through registration formalities in time after patent licensing and transfer, so as to reduce the legal risks of patent transactions.

(3) Strengthening the ability for patent litigation

Patent litigations are highly specialized and technology-related, which can be more challenging for the parties involved and their agents. First, they should be well-prepared for the litigation. Patentees should prepare evidence of rights, technical comparison opinions and evidence of damages when filing the case, so as to improve the efficiency of litigation. Second, they should choose the reasonable strategy. Patentees should make appropriate and reasonable claims according to the evidence they have in hand, so as to promote the realization of the purpose of litigation. Third, they should respond actively. Defendants should participate in litigation actively and defend themselves according to law. They should fully understand the rules of evidence, be cooperative when the court preserves and seals up the evidence and requires the provision of financial accounts, timely collect evidence such as legal sources, existing technologies or existing designs for defense, and participate in litigation in good faith.

Typical Cases

1. M&G Stationery v. Deli et al. for infringement of design

[Case Review]

M&G Stationery, the plaintiff, is the patentee of design named “pen” (AGP67101). It claims that Deli, the defendant, has infringed its patent right by producing a gel pen with the model No. A32160, and Kunsen Company, another defendant, has infringed its patent right too by selling that gel pen in its online store. M&G requests the court to order the two defendants to stop manufacturing and selling the infringed products, and to compensate for its economic losses and reasonable expenses totalingRMB2 million.

After hearing, SIPC held that the principle of “overall observation and comprehensive judgment” should be followed in the judgment of similar designs. In specific cases, the court should examine both the similarities and the differences between the allegedly infringed design and the authorized design; analyze objectively the impacts of such similarities and differences on the overall visual effect, and avoid subjective factors.Deli has not paid any creative work. By changing or adding design elements, patterns and colors with no substantive differences based on the authorized design, Deli has infringed on the patent right of the design involved. SIPC ordered the two defendants to stop the infringement and compensate for the economic losses and reasonable expenses totaling RMB100,000. Neither party appealed.

[Case Study]

The pens involved in this case are common in our daily life, so the judgment of design infringement is often likely to be influenced by subjective factors. This case explores the objective criteria for identifying the similarities in appearance design, which can be concluded by analyzing objectively the impacts of the same design features of and the different design features between the allegedly infringed product and the authorized patent on the overall visual effect. The judgment of this case is an important reference for identifying the similarities in appearance design of the products which are commonly seen in our daily life.

2. Hu v. Mobike for infringement of invention

[Case Review]

The plaintiff Hu is the patentee of an invention named “an electric vehicle control system and its operation method.” Hu claims that the lock control system manufactured and used by the defendant Mobike has infringed the patent rights enjoyed by him, so he sued the company.

After hearing, SIPC held that the four components of the QR identifier in Claim 1 of the patent involved must be integrated, and the electrical connection does not include Wi-Fi connection. The allegedly infringed lock control system of Mobike has no such technical features as the “QR identifier” and “the electrical connection between the graphic decoder… and the QR identifier” provided under Claim 1 of the patent involved. Nor does it have this technical feature of “the controller making the alarm ring when the comparator signal is inconsistent.” The allegedly infringed lock control system of Mobike and its operation method do not fall within the scope of protection of the patent involved, so the court rejected all the plaintiff’s claims. The court of second instance upheld the original judgment.

[Case Study]

The court fully respects the patent rights enjoyed by the patentee according to law, and also protects the legitimate rights and interests of innovative enterprises according to law. The rules on determination and comparison of patent infringement have been followed in this case: first, the court has defined the scope of protection of the patent rights for the invention involved, laying a solid foundation for the trial of the case; second, the court has carried out comparison in a comprehensive manner: the court has compared each and every technical feature provided under the claims of the patentee; third, the court has identified that the differences between the accused technical program and the patent involved are not the same and cannot be regarded as equivalents.

3. Canon Inc. v. Muming for infringement of invention

[Case Review]

The plaintiff Canon Inc. is the patentee of the invention named “electronic photographic imaging equipment, developing device and coupled components.” It claimed that the defendant Muming had infringed upon its patent rights by manufacturing, selling and promising to sell the selenium drum concerned. It requested the court to order the defendant to stop the infringement and compensate for the economic losses and reasonable expenses totalingRMB1.2 million. During the trial, Muming claimed that the products involved were manufactured by others and it only sold them.

After hearing, SIPC held that, by comparison, the allegedly infringed products fell into the scope of protection of the patent rights involved. The court found that the defendant had infringed the plaintiff’s patent rights by manufacturing, selling and promising to sell the infringed products without permission. It ordered the defendant to stop the infringement and compensate for the economic losses and reasonable expenses totaling more than RMB590,000. Neither party appealed.

[Case Study]

In this case, the defendant only admitted the act of selling and promising to sell the infringed products. It did not admit the act of producing the infringed products. The court held that when processing the products involved, the model of the related products is determined by the defendant, and the package, which is provided by the defendant, indicates that the defendant is the manufacturer, suggesting that the defendant explicitly tells the buyers that it is the manufacturer of the product. Therefore, the defendant’s claim that it is the seller but not the producer is untenable.

4. Jiang et al. v. Wang over transfer contract on patent application right

[Case Review]

The plaintiff Jiang et al. signed a contract with the defendant Wang on the transfer of the patent application right. The contract stipulates that Wang should transfer his invention patent right to a biomedical company, an outsider in this case. If there is a breach of contract, he shall pay 30% of the total contract value (RMB15 million) as compensation to the non-fault party. But then Wang refuses to fulfill the obligation to transfer his patent right, which leads to the failure of the transfer contract signed byJiang and others. Therefore,Jiang suedWang and asked him to pay liquidated damages ofRMB 4.5 million.

After hearing, SIPC held that after the signing of the contract, the defendant had not fully fulfilled his obligation, which is transferring the right to apply for a patent to an outsider. The defendant’s behavior had constituted a breach of contract. When signing the contract, the compensation of 30% of the contract amount for breach of contract is the real intention of both parties, and the defendant’s breach of contract does bring direct economic losses to the plaintiff, so the liquidated damages stipulated in the contract are appropriate. Therefore, the court decided to give full support to the plaintiff’s claim for liquidated damages. In the second instance, the parties reached a settlement.

[Case Study]

In the dispute over the transfer contract on the patent application right, instead of being alone, the contract involved often comes along with a series of transfer contracts and technology project agreements. The failure of the purpose of the contract involved will lead to continuous litigations. Therefore, after considering the performance of the contract, the degree of the defendant’s fault and the plaintiff’s expected returns, and the fact that the agreed amount of liquidated damages is not too large, the court supported the plaintiff’s claims.

5. Fengjing v. Ciying for infringement of invention

[Case Review]

The plaintiff Fengjing is the patentee of an invention named “a device that constitutes a permanent magnet full-action surface.” Fengjing claims that by manufacturing, selling and promising to sell a magnetic separator, the defendant Ciying has infringed upon its patent rights. Fengjing requests the court to order the defendant to stop the infringement and compensate for the economic losses and reasonable expenses totaling more than RMB3 million. After investigation, it is found that Ciying has produced and sold three infringed products, one sold to the plaintiff’s former customer and two sold after the company won the bid.

After hearing, SIPC held that the allegedly infringed products fell into the protection scope of the patent right involved, and that the defendant’s behavior constituted infringement. Considering the profits under the original contract between the plaintiff Fengjing and an outsider company and the profits gained by the defendant Ciying by selling the two infringed products after winning the bid, the court determined that the total compensation for economic losses and reasonable expenses shall be some RMB1.2 million. The court of second instance upheld the original judgment.

[Case Study]

In this case, the infringer has damaged the interests of the patentee by improperly blocking the normal cooperative relationship between the patentee and the outsider, and the infringer has also made profits from selling the infringed products. The court separately determined the amount of compensation based on the above two situations.

6. Philips v. Baixiang Jitian Factory et al. for infringement of design

[Case Review]

The plaintiff, Philips, is the patentee of the design named “three segmentshavers.” It found that a shop named “phllibus Genuine Store” on Taobao. com selling the “three segmentshavers,” the package of which is marked with the trademark PHLLIBUS registered by the defendant Baixiang Jitian Factory. Philips claims that the appearance of the allegedly infringed product is similar to that of the plaintiff’s design patent, and that Baixiang Jitian Factory has manufactured and sold the product without permission. Philips requests the court to order the defendant to stop the infringement and compensate for the economic losses and reasonable expenses totalingRMB300,000. During the trial, Philips applied to the court for a search warrant to prove the defendant’s gains out of infringement.

After hearing, SIPC held that there is no substantive difference between the appearance of the allegedly infringed product and the design involved. They are similar. So the appearance of the allegedly infringed product falls into the protection scope of the plaintiff’s design patent. With regard to the amount of compensation, the court further checked the total sales and profits of the products based on the transaction records of the online store obtained by the plaintiff according to the search warrant, and finally gave full support to the plaintiff’s claim for compensation. The court of second instance upheld the original judgment.

[Case Study]

In patent infringement litigation, both parties should give effective proof of the actual losses or gains out of infringement. Especially in cases involving online stores selling infringed products, the sales records kept by a third-party e-commerce platform are complete and objective. The parties can gain support from the court for its claims by using that as evidence for compensation.

7. MicroPort v. Newmed et al. for ownership of patent application right

[Case Review]

Yu was the head of the Frontier Technology Department of the plaintiff MicroPort. After leaving the company in August 2010, he worked in several medical technology companies. During this period, he applied for a number of invention patents involving the valve transport system. In early 2015,Yu joined the defendant Newmed.Qin andWang were also former employees of MicroPort, respectively serving as the Clinical Director and a technician of Frontier Technology Department. Both of them left the company and joined Newmed in early 2015. During his stay in MicroPort,Wang participated in the R&D of the “transcatheter aortic valve transport system.” In July 2015, Newmed applied for a patent for the invention involved “a heart valve transport device,” which is invented byYu,Wang andQin. MicroPort claims that the patented technology involved is a job-related invention byWang andQin, and requests the court to order the right to apply for the patent involved to the owned by MicroPort.

After hearing, SIPC held that the plaintiff has no evidence to prove that the patented technology involved is related toQin’s job or assignment at MicroPort, but it has a strong correlation withWang’s job at MicroPort, and it is applied for within one year afterWang’s resignation from MicroPort. In addition, considering thatYu, the first inventor of the patent application in question, has a strong capability of technological research and development in the field of medical devices, he should have a strong correlation with the patented technology involved. Also, there is a big difference between the patented technology involved and the technology of MicroPort in the specific technical programs.Yu is the first inventor of the patent application involved, and the evidence in the case is not enough to prove that the patented technology involved is onlyWang’s personal technological achievement. Therefore, SIPC decided that the right to apply for the patent involved shall be shared by MicroPort and Newmed. The court of second instance upheld the original judgment.

[Case Study]

This case concerns the dispute over the ownership of patent rights, involving the determination of standards for job-related inventions. The judgment of this case makes it clear that the contribution of the employee inventors to the R&D of the inventions should be considered when the employer claims that one of the multiple inventors of a job-related invention is its former employee. If other inventors have strong R&D capability in the field concerned, and there is a big difference between the invention in question and the employer’s technology, it cannot be simply decided that the invention in question is a job-related invention owned by the former employer.

8. Materion v. Jixin et al. for ownership of patent

[Case Review]

Zhou X Xin andQian are former employees of the plaintiff Materion. Their positions were chief engineer and sales manager, and they left the company in December 2013 and December 2012 respectively. DuringZhou’s stay, Materion was engaged in the research and development of the phosphor wheel technology, in whichZhou X Xin played an important role. The defendant Jixin was founded in October 2013. The legal representative of Jixin is Zhou X Rong, father of Zhou X Xin. Zhou X Xin provides technical support for Jixin.Qian indirectly financially invests in Jixin. In February 2014, Jixin applied for a patent for the invention involved, named “a phosphor wheel and its production method.” The inventors areZhou X Xin,Qian,Yang and Zhou X Rong. Jixin confirmed that Zhou X Rong (Zhou’s father) andYang had no technical contribution to the patent involved. Materion argues that the patent involved is a job-related invention byZhou X Xin andQian, and requests the court to order the patent involved to be owned by Materion.

After hearing, SIPC held that, first of all, there is no evidence showing thatQian had any technical background regarding the R&D of the phosphor wheel, so it cannot identify the patented technology involved asQian’s job-related invention. Secondly, although the related technology of Materion does not involve the assembly technology of multi-sector substrates, it and the patented technology involved both belong to the field of phosphor wheel technology. Both solve the same technical problems and the raw materials involved are basically the same. The differences only lie in the manufacturing process, and such differences can be inherited to some degree. Therefore, the court found that the patented technology involved has a strong correlation withZhou X Xin’s job at Materion. Also, considering thatZhou X Xin is the first inventor in patent application, and the date of patent application is less than one year sinceZhou X Xin left the company, SIPC found that the patented technology involved is identified as Zhou X Xin’s job-related invention. Accordingly, the court decided that the patent for the invention involved shall be owned by Materion. The court of second instance upheld the original judgment.

[Case Study]

The identification of job-related inventions involves the balance of interests between inventors and companies, especially the balance between the employee’s ability to be reemployed and the protection of company’s interests. This case is a typical case over job-related invention. The focus of the dispute and the difficulty of hearing lie in the determination of the relevance between the patented technology and the inventor’s own work. The judgment of this case clarifies the determination of the relevance of job-related inventions, which is different from the same or equal standards of technical characteristics in the judgment of patent infringement and does not require the invention points of the patented technology to be reflected in the inventor’s work. Instead, it should suit the relevant standards of technical program: whether they belong to the same technical field, whether they solve the same technical problems, and whether the technical means can be inherited.

9. Dachuang v. Xinbaiqin et al. for damages caused by malicious initiation of intellectual property litigation

[Case Review]

In January 2015, Xinbaiqin, the defendant, filed a lawsuit against the plaintiff Dachuang for infringement of its utility model patent for a bulk feed tank. During the lawsuit, the defendant also reported to the Ministry of Industry and Information Technology that Dachuang had infringed its intellectual property rights. In September 2015, Xinbaiqin withdrew its lawsuit after the above-mentioned patent was invalidated. Dachuang claimed that Xinbaiqin had applied for and obtained its utility model patent by using a publicly known technology and maliciously filed an intellectual property lawsuit, which resulted in Dachuang not being qualified for production of bulk feed trucks. Unable to operate normally for two years, Dachuang had suffered considerable economic losses, so it sued Xinbaiqin.

After hearing, SIPC held that, first of all, the reason for the invalidation of patents involved enjoyed by Xinbaiqin is that they lack creativity, not novelty, so it is not enough to prove that Xinbaiqin had maliciously applied for the two patents knowing that the patented technologies are existing technologies. Secondly, it is justified for Xinbaiqin to bring a lawsuit based on the lawful and effective patent rights. It just applied the right of action according to law. Thirdly, the evidence shows that there are other reasons why the Ministry of Industry and Information Technology refused to grant a access permit for Dachuang’s production of bulk feed trucks. Therefore, the existing evidence is not sufficient to prove that Dachuang’s failure to obtain access permit for the product involved has a causal relationship with the lawsuit filed by Xinbaiqin. Accordingly, SIPC decided to reject all the claims of Dachuang. Neither party appealed.

[Case Study]

This case concerns damages caused by malicious initiation of intellectual property litigation, which is essentially a tort dispute. The identification of prosecution as tort should conform to the elements of the general tort: the illegality of the act, subjective fault, damages caused and the causal relationship. In this case, the key to determining whether the defendant is malicious is whether it knows that its claim lacks factual and legal bases and whether it has the intention to infringe on the legitimate rights and interests of the other party by filing a lawsuit.

10. Mikabo v. Yujin Lanyou for counterfeiting patent

[Case Review]

Mikabo, the plaintiff, is the patentee of an invention named “a kind of freeze-thaw-resistant starch glue and its preparation method.” It argues that Yujin Lanyou, the defendant, claims that it has a “patent for freeze-resistant technology” in the “Commodity Details” of a “glutinous rice glue product” sold in its online store on Tmall and uses the plaintiff’s patent certificate number. Therefore, it requests the court to order the defendant to stop the infringement and compensate for its economic losses and reasonable expenses totaling more than RMB150,000.

After hearing, SIPC held that the product involved is produced by the plaintiff, which is commissioned by the defendant’s affiliated company. And according to the relevant contract, the defendant’s trademark should be shown on the product involved. During the trial, the plaintiff failed to prove that the product involved did not use its patented technology, so it was difficult to determine that the defendant’s use of the plaintiff’s patent number on the relevant commodity webpage constitutes counterfeit of patent. Accordingly, SIPC decided to reject all the plaintiff’s claims. Neither party appealed.

[Case Study]

According to the Patent Law of China, the use of the patent number of others in the sale and circulation of products without the permission of the patentee is counterfeiting the patent of others. In this case, the defendant submitted evidence to prove that the product originates from the plaintiff, while the plaintiff failed to provide sufficient evidence to prove that the product sold by the defendant is not the patented product produced by the plaintiff itself. Therefore, the plaintiff’s claim cannot be supported by the court.