Opinion: IP Report shows Supreme Court's changing attitude
July 16, 2013 | BY
clpstaff &clp articles &The Annual IP Report from the Supreme People's Court reveals how its stance on key issues is evolving. Owners of low quality patents may find it harder to enforce or defend their rights
Every year, intellectual property rights owners and legal professionals eagerly await the release of the Supreme People's Court, Annual Report on Intellectual Property Cases (Abstract) (最高人民法院知识产权案件年度报告 (摘要)). While none of the cases are binding legal precedents, the lower courts are reluctant to go against the rules set out in the Report.
This year, the Court publicised 34 cases in its case report, which is roughly 10% of the total number of IP cases it adjudicated in 2012. In its summary, the Court noted the following trends exhibited in the IP cases that came before the Court: (a) patent cases involved a significant number of issues related to claim construction; (b) most of the disputes in patent validity cases relate to determining inventiveness; (c) in most of the trademark prosecution cases the key issues relate to the conflicts of rights; and (d) new business models and the use of internet technologies often appear in unfair competition cases.
As a result, we have seen from the Report that the Supreme Court delved into basic claim construction rules and took the opportunity to stake out some new positions. For example, the Court clarified what is a technical element in construing claims. The Court had never decided this issue in all of its prior judicial interpretations. In another case, the Court stated that obvious typos or errors in claims shall be corrected if those ordinary-skilled in the art are able to directly, definitely and unquestionably tell and correct such mistakes based on the written description. The Supreme Court also took up another case to explain how to construe the preamble: the language in the preamble suggests that the claimed technology may be used in this environment, but does not mean that the claimed technology must be used in it unless otherwise required so in the specification. Whether or not all these rulings are universally agreed upon in practice or not, the wide scope of issues dealt with in these cases will greatly enrich the current body of patent legal rules.
Some other changes, while not as groundbreaking, indicate a shift in the Court's attitude. For example, 60% of the published patent cases addressed utility model patents and some of the decisions impose substantial barriers around utility model patent owners with respect to both enforcement and invalidation proceedings. In one case involving the utility model patent anti-electromagnet contamination uniform, the Court ruled that a patent shall not be enforceable when the court is unable to ascertain the meaning of the claims and the scope of protection through exhausting all the construction methods. In another case related to an ultrasonic monitor for female planning reproduction, the Court rejected the argument that the commercial success of this device is a proof of inventiveness. The Court required an additional showing of evidence to prove that such commercial success resulted from claimed features. Arguably, a net result of these cases is that those owners of low quality or abnormal patents may find it harder to enforce their respective patents, or may encounter greater difficulties in defending these patents.
The Report also includes several cases in the areas of design patents, trade secret protection and online copyright protection that multinational companies may find useful. The Supreme Court clearly defined what constituted non-patentable functionality features in a design patent, which again helps invalidate some of the more annoying junk patents. In a case involving Baidu, the Supreme Court clearly required Baidu to bear the liability even if it turns out that the rightful owners' take-down notices have defects. The Supreme Court stated that the internet service provider (ISP) must proactively communicate with the right holders in taking reasonable measures after gaining knowledge about the infringement in spite of imperfect take-down notices. This can be encouraging to rightful owners, while ISPs may view this new ruling as overly burdensome. Furthermore, in a trade secrets case, the Supreme Court followed its previous decision by holding that the general confidentiality obligation in commercial contracts (distributorship contract) is not regarded as sufficient measures to protect trade secrets. In other words, if a company only relies on confidentiality clauses and fails to take any affirmative action to protect supposedly secret information, this information may not qualify for trade secret protection.
He Jing, AnJie Law Firm, Beijing
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