Patent Invalidity Visited by Supreme People's Court

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In September 2005, the Supreme People's Court rendered its first formal case decision on the issue of patent invalidity in the case of Xu Wenqing vs Patent Re-examination Board. Under Chinese patent law, an issue of invalidity goes to the Patent Re-examination Board (PRB), which will make a decision on whether the patent is invalid, partially invalid or upheld. Judicial review of PRB decisions is also available under China's World Trade Organization membership obligations. When the PRB is a party to a lawsuit, it is regarded as an administrative lawsuit. An appeal to the Beijing No. 1 Intermediate People's Court, which has jurisdiction over such cases, may be made by parties dissatisfied with a PRB decision. Any further appeal may then be made to the Beijing High People's Court.

The Xu case did not stop at the Beijing High People's Court. The patent in question is an anti-corrosion technique for the interior and exterior surfaces of steel tube bundles, invented by Xu. Various third parties challenged the validity of the patent, on the grounds that the claims are not supported by the specification. The PRB conducted a hearing and invalidated the patent.

The case was eventually heard by the Supreme People's Court and it was held that the patent claims are supported by the specification. The court held that the requirement for claims to be supported by the specification means that the scope of the claims should not exceed the content of the specification.

The role of the specification is a significant topic in Chinese patent law. In addition to the requirement that claims be supported by the specification, there is also a second requirement. This requirement states that during prosecution, a patent specification must describe the invention or technical solution seeking protection by the claim in a sufficiently clear and complete manner. In other words, a person skilled in the relevant art should be able to reproduce the same technical solution on the basis of the specification, without the need for any further creative work. The PRB cited this requirement in its high-profile 2004 decision to invalidate Pfizer's Viagra patent. Pfizer subsequently filed an appeal with the Beijing No. 1 Intermediate People's Court. However, while the court has heard the case, it has not yet rendered a judgement.

This requirement was applied by the Beijing High People's Court in another recent case, that of Ningbo Shuangkang Kitchen Equipments vs PRB. The court stated that the specification and drawings description are not sufficiently clear and complete, if two people skilled in the art read the claims, specification and drawings and come to different understandings.

The role of the specification is also highlighted during enforcement, when the courts carry out claim construction. Under Chinese patent law, the extent of patent protection is determined by the terms of the claims; specification and appended drawings may be used to interpret the claims.

In one of its recent opinions, the High People's Court of Jiangsu Province stated that the irrelevant features described in the specification and drawings should not be deemed as extra limits to the technical features cited in the claims. This opinion would be acceptable to the Supreme People's Court which, in its 2001 decision addressing the doctrine of equivalents, indicated that the extra technical features of an example used in the specification should not be read as extra limits to the claims.

The 2005 Supreme People's Court patent decisions, particularly its decision on the Xu case and another infringement case, Dalian Xinyi Construction Materials Company vs Dalian Renda New Wall Construction Materials Plant, with their comparatively long sections of legal analysis, reveal a trend that Chinese courts are trying to bring about more deliberation on the patent law doctrines.

In 2003, the Supreme People's Court issued for comment a draft judicial interpretation on patent infringement adjudication. Most issues discussed recently, including the role of specification and the doctrine of equivalents, were addressed in that draft judicial interpretation. The Supreme Court currently appears to be seeking to settle some of the doctrines with its explicit court opinions. Though China is not a common law country, the court's opinion is expected to influence the development of Chinese patent law.

In a recent administrative conference between China's IP courts, one of the justices made various proposals for IP adjudication work in 2006, three of which are noteworthy. First, the public availability of the courts' opinions should be improved; second, preliminary injunction should be more frequently used; and third, statutory damages should be requested directly. These proposals will hopefully lead to a more transparent and enforceable patent law regime in China.