Supreme People's Court, Annual Report on Intellectual Property Cases (2012) (Abstract)

(Published by the Supreme People's Court on April 25 2013.)

In 2012, the Intellectual Property Division of the Supreme People's Court accepted a total of 359 new intellectual property cases, and concluded 366 cases (including cases remaining from previous years). The aforementioned cases reflected the following characteristics: the characteristics and trends of the intellectual property and competition cases heard by the Supreme People's Court in 2012 were as follows: there was some slowing in the explosive growth trend in cases, with the total number of cases accepted tending basically to remain similar to before; the number of new types and difficult cases continued to increase, with the number of cases involving the ascertainment of complex technical facts and cases requiring the clarification of legal definitions or the filling in of legal gaps continually increasing; there was an increasingly greater breadth in the fields involved in patent cases, the technical content and market value involved were increasingly greater, the legal issues involved increasingly broader and deeper and the proportion of difficult cases higher, with both civil patent cases involving the rules of interpretation of claims and administrative patent cases involving determination of an inventive step relatively numerous; the proportion of trademark cases remained basically similar to before, with cases involving conflicts of rights being the most numerous, and particularly so in administrative trademark cases; in copyright cases, cases involving new fields, such as the internet, software and animation, continued to increase, and the commercial value of the works involved was increasingly greater; and in unfair competition cases, disputes involving network technologies and new business models and passing off disputes increased. This year's report has derived 37 law application issues with general guiding significance from 34 typical cases carefully selected from the intellectual property and competition cases completed by the Supreme People's Court in 2012. They reflect the trial standards, adjudication methods and judicial policy direction of the Supreme People's Court in handling new, difficult and complicated cases in the intellectual property and competition trial fields.

I. Trial of Patent Cases

1. Trial of Civil Patent Cases

(1) Method of demarcating technical characteristics in claims

In the Zhang Qiang v. Dayi Industrial & Trade et. al. patent infringement case [(2012) Min Shen Zi No.137], the Supreme People's Court stated that, when demarcating the technical characteristics in the claims, in general, a technical unit that is capable of realising a relatively independent technical function should be treated as one technical characteristic, and it is inappropriate to delimit several technical units that realise different technical functions as one technical characteristic.

(2) Whether the description can be used to revise the clear meaning of terms in the claims?

In the Xi'an QinBang “method for making a composite metallic shielding belt” patent infringement case [(2012) Min Ti Zi No.3], the Supreme People's Court stated that, when a person having ordinary skill in the art can clearly determine the meaning of the relevant language in the claims and the description does not give a special definition of the meaning of terms in the claims, the understanding of the person having ordinary skill in the art of the contents of the claims themselves should prevail, and the content recorded in the description should not be used to negate what is recorded in the claims, unless the description of a specific term in the claims contains an obvious error and a person having ordinary skill in the art can correct the meaning of the specific term in the claims clearly, directly and beyond all doubt based on the corresponding portion of the description and figures, in which case the interpretation should be made in light of the corrected meaning.

(3) Size parameters derived by measuring the figures in the description cannot limit the scope of protection of the claims

In the Shinning v. Amphenol East Asia utility model patent infringement dispute [(2011) Min Shen Zi No.1318], the Supreme People's Court stated that, in general, size parameters not recorded in the claims and derived solely by measuring the figures in the description cannot be used to limit the scope of protection of the claims.

(4) Interpretation of use environment characteristics

In the Shimano v. Sunrun invention patent infringement dispute [(2012) Min Ti Zi No.1], the Supreme People's Court held that use environment characteristics that have been written into claims are necessary technical characteristics and function to limit the scope of protection of the claims; the extent to which the use environment characteristics limit the scope of protection of the claims is to be specifically determined based on the circumstances of each case, but in normal circumstances should be understood as meaning that it is acceptable as long as the subject for which protection is requested may be used in the use environment in question, not that it must be used in such use environment, unless a person having ordinary skill in the art, after reading the patent claims, description and patent review file can unequivocally and reasonably learn that the protected subject must be used in the use environment in question.

(5) Interpretation of closed claims

In the Hu Xiaoquan “adenosine disodium triphosphate and magnesium chloride for injection” patent infringement case [(2012) Min Ti Zi No.10], the Supreme People's Court stated that, in general, closed claims should not be interpreted as including structural component parts or process steps other than those stated in the claim in question; as for closed claims for compounds, in general, they should be interpreted as meaning that the compound only contains the indicated components and that all other components are excluded, but can contain normal quantities of impurities. Excipients are not deemed impurities.

(6) Application of the doctrine of equivalents in determining infringement of closed claims

In the aforementioned “adenosine disodium triphosphate and magnesium chloride for injection” patent infringement case, the Supreme People's Court additionally clarified the application of the doctrine of equivalents in determining infringement of closed claims. The Supreme People's Court stated that the choice by a patentee of a closed claim indicates that it expressly excludes from the scope of protection of the patent other structural component parts or process steps that have not been delimited, and it would be inappropriate to re-insert the same into the scope of protection by applying the doctrine of equivalents.

(7) Application of the doctrine of estoppel in circumstances where a portion of the claims has been declared invalid

In the Flying Tian v. Nine Eagles utility model patent infringement dispute [(2011) Min Ti Zi No.306], the Supreme People's Court stated that the doctrine of estoppel normally applies where a patentee has itself abandoned a technical solution through revision or a statement of opinions; if an independent claim is declared invalid and the validity of the patent is maintained on the basis of its dependent claims and the patentee has not itself abandoned the same, it is not appropriate to apply the doctrine of estoppel to the said dependent claims and limit the application of the doctrine of equivalents in the context of infringement only for this reason.

(8) Accusations of infringement against patents where the scope of protection is manifestly unclear should not be upheld

In the Bo Wanqing v. Goods Search Centre and Tianxiang utility model patent infringement dispute [(2012) Min Shen Zi No.1544], the Supreme People's Court stated that accurately delimiting the scope of protection of a patent is a precondition for determining whether an alleged infringing technical solution constitutes infringement, and if the scope of protection of a patent is manifestly unclear, the alleged infringing technical solution should not be determined to be infringing.

(9) Comparison and review methods for an argument of prior art

In the Zetian v. Greater utility model patent infringement dispute [(2012) Min Shen Zi No.18], the Supreme People's Court stated that, when conducting a review for an argument of prior art, the comparison method is contrasting the alleged infringing technical solution with prior art, and where the two are not identical, when conducting the review, reference may be made to the patent claims to determine the technical characteristics in the alleged infringing technical solution that are alleged to fall within the scope of protection of the patent and determine whether prior art has disclosed technical characteristics that are identical or equivalent.

(10) Determination of product type in design patent protection

In the Arc International v. Lanzhiyun Factory design patent infringement dispute [(2012) Min Shen Zi No.41 and No.54], the Supreme People's Court stated that, when determining the type of a product that incorporates a design patent, the purpose of the product that has an independent existence and can be sold as an independent item should serve as the basis; and the scope of protection of a design patent is limited to the design on identical or similar product types.

(11) Determination of the point in time that a patent is declared invalid for the purposes of the second paragraph of Article 47 of the Patent Law

In the Dongming v. Qinfeng utility model patent infringement dispute [(2012) Min Ti Zi No.110], the Supreme People's Court held that, for the purposes of the second paragraph of Article 47 of the Patent Law, the date of the decision of the review of a petition for a declaration of invalidity should be determined as the point in time that the patent is declared invalid.

2. Trial of Administrative Patent Cases

(12) When interpreting claims, the scope of protection should be made to be consistent with the scope disclosed in the description

In the administrative case for the invalidation of a utility model patent for a “mercury-free alkaline button-type battery” [(2012) Xing Ti Zi No.29], the Supreme People's Court stated that, when using the description and figures to interpret claims, the claims should be taken as the basis and their scope of protection made to be consistent with the scope disclosed in the description.

(13) Determination of, and considerations concerning, the field of the prior art when judging an inventive step in utility model patents

In the administrative case for the invalidation of a utility model patent for a “dynamometer” [(2011) Zhi Xing Zi No.19], the Supreme People's Court held that, when evaluating an inventive step in a utility model patent, in general weight should be placed on comparison with the prior art in the technical field to which the utility model patent belongs; however, where the prior art has provided clear technical inspiration, consideration can also be given to the prior art in similar or related technical fields; the term “similar technical field” generally means a field in which the function of the product incorporating the utility model patent and the specific use thereof is similar; and the term “related technical field” generally means the function field in which the differentiated technical characteristics of the utility model patent and its closest prior art are applied.

(14) Determination of an inventive step in novel crystalline compounds

In the administrative case for the invalidation of an invention patent for “tiotropium bromide monohydrate” [(2011) Zhi Xing Zi No.86], the Supreme People's Court held that “compounds with a similar structure”, as used in the Patent Review Guidelines, only specifically means that the compounds must have identical core portions or basic rings, and does not involve a comparison of their microcrystallographic structures themselves; in a determination of an inventive step of novel crystalline compounds, not all changes in microcrystallographic structure will necessarily have a salient substantive feature or be a marked advance, and whether it results in an unexpected technical effect must be taken into account.

(15) Moment for considering and method of determining commercial success in determination of an inventive step

In the administrative case for the invalidation of a utility model patent for a “B-type ultrasound monitor used in female family planning operations” [(2012) Xing Ti Zi No. 8], the Supreme People's Court held that, in normal circumstances, commercial success can serve as an assisting factor in determining an inventive step only when determining an inventive step in a technical solution or rendering an assessment of no inventive step is difficult using the “three-step method”; with respect to a consideration of commercial success, relatively stringent criteria need to be adhered to, and only when the technical characteristics of a technical solution that are an improvement as compared to the prior art are the direct reason for the commercial success, can they be deemed to be an inventive step.

(16) When determining the contents of a drawing of the structure of a product disclosed in comparative documents, account may be taken of its structural features and common knowledge

In the administrative case for the invalidation of a utility model patent for a “moulded nylon pipe with a flange” [(2012) Xing Ti Zi No.25], the Supreme People's Court stated that, when the comparative documents only disclose a drawing of the structure of a product without a written description thereof, its meaning may be determined by taking into account its structural features and the common knowledge of a person skilled in the art.

(17) Criteria for determining that technical characteristics in claims have been disclosed by comparative documents

In the administrative case for the invalidation of a utility model patent for a “rapid in, slow out flexible damper buffer” [(2012) Zhi Xing Zi No.3], the Supreme People's Court stated that disclosure by comparative documents of technical characteristics of a claim not only requires that the comparative documents contain the corresponding technical characteristics, but also that the effect to which such corresponding technical characteristics in the comparative documents give rise is substantively similar to that of the technical characteristics in the claims.

(18) Handling of typographical errors in claims when determining whether claims are supported by the description

In the administrative case for the invalidation of a utility model patent for a “precision rotating compensator” [(2011) Xing Ti Zi No.13], the Supreme People's Court stated that typographical errors in claims do not necessarily result in the description denying support thereto; if claims contain an obvious error but a person having ordinary skill in the art could determine the sole and correct interpretation based on the corresponding text in the description and figures, the technical solution protected by the claims should be determined based on the corrected interpretation and then, on this basis, a determination made as to whether the claims are supported by the description.

(19) Determination and significance of functional design characteristics

In the administrative case for the invalidation of a design patent for a “logical programmable switch (SR14)” [(2012) Xing Ti Zi No.14], the Supreme People's Court stated that the term “functional design characteristics” means those design characteristics of a product incorporating the design in question that, from the perspective of the average consumer, are determined solely by the specific functions that they are to realise without consideration for aesthetic factors; the criteria for determining functional design characteristics lie not in whether such design characteristics are not optional due to limits imposed by function or technical conditions, but rather whether such design characteristics, from the perspective of the average consumer, are solely determined by their specific functions, thereby obviating the need to consider whether such design characteristics are aesthetically pleasing; and functional design characteristics usually do not have a marked effect on the overall visual effect of the design.

(20) Conditions for acceptance, in a determination of an inventive step, of additional experimental data submitted after the filing date

In the administrative dispute over the invention patent for a “pharmaceutical composition for the treatment of diabetes” [(2012) Zhi Xing Zi No.41], the Supreme People's Court stated that, in a determination of an inventive step, when the patent applicant or patentee submits, after the filing date, supplementary comparative experimental data to show that the patent's technical solution produced an unexpected technical effect, the precondition for acceptance of such experimental data is that the technical effect that they substantiate was expressly recorded in the original application documents.

(21) Circumstances that are to be considered when rendering a judgment asking the Patent Re-examination Board to decide anew

In the administrative case for the invalidation of a utility model patent for an “oil retention device for a helical gear set in the sharpening mechanism of a cutting machine” [(2012) Xing Ti Zi No.7], the Supreme People's Court held that, when a people's court is rendering a judgment to quash or partially quash the specific administrative act against which an action has been brought, determining whether a judgment asking the administrative authority in question to do the administrative act anew is to be rendered is dependent on the specific circumstances of the case.

II. Trial of Trademark Cases

1. Trial of Civil Trademark Cases

(22) A registered trademark the registration of which is restored after an erroneous cancellation should be deemed as having existed throughout

In the Haiyang v. Qingdao Xinyuan et. al. trademark infringement case [(2012) Min Ti Zi No.9], the Supreme People's Court stated that a registered trademark the registration of which was restored after an erroneous cancellation should be deemed as having existed throughout and that use of such trademark by a third party without a licence constituted infringement, except in the case of a bona fide third party that used the same in the belief that it had been cancelled.

(23) Determination, in a trademark infringement judgment, of reasonable use of a trademark by an authorised distributor

In the Wuliangye v. Tianyuan Tonghai dispute over infringement of the exclusive right to use a registered trademark and unfair competition [(2012) Min Shen Zi No.887], the Supreme People's Court stated that the good faith use of a trademark by an authorised distributor to indicate its authorised status and publicise and promote the trademark rights holder's goods does not constitute trademark infringement, provided that such use does not undermine the trademark's identification function.

(24) The reasonable and compliant use by a member enterprise of the group's marks in the course of its business activities does not constitute trademark infringement

In the Myande v. Muyang Group dispute over infringement of the exclusive right to use a registered trademark [(2012) Min Ti Zi No.61], the Supreme People's Court held that the reasonable and compliant use by a member enterprise of a group in its business activities to highlight its status as a member of the group does not constitute trademark infringement.

2. Trial of Administrative Trademark Cases

(25) Review and determination of distinctiveness when applying for a three dimensional trademark for a portion of the external appearance of a good

In the Hermes v. Trademark Review and Adjudication Board trademark rejection administrative re-examination case [(2012) Min Shen Zi No.68], the Supreme People's Court held that, when applying to register the three dimensional shape of a part of the external appearance of a good as a trademark, as the relevant public is more likely to view it as a constituent part of the good rather than a trademark due to the fact that such three dimensional shapes usually cannot be isolated from the good itself and used independently, the application for registration thereof should be dismissed unless the external appearance of the good itself has distinctive characteristics that set it apart from the external appearance of the same class of goods, or the applicant can show that, through use, it has caused the relevant public to associate the external appearance of the good in question with the specific good supplier.

(26) Whether the registration as a trademark of the name of a deceased famous person can be deemed to have other negative effects

In the Guizhou Meijiuhe v. Trademark Review and Adjudication Board and Li Changshou trademark dispute administrative case [(2012) Zhi Xing Zi No.11], the Supreme People's Court stated that if registering the name of a famous person who has a significant degree of notoriety and influence in the relevant industry as a trademark for goods related to the industry is likely to cause relevant consumers to associate the quality features of the goods in question with the production process for famous products related to the industry, thereby misleading consumers, it can be determined that the foregoing has other negative effects.