Supreme People's Court, Annual Report on Intellectual Property Cases (2017) (Abstract)

The basic patterns and characteristics of the intellectual property and competition cases tried by the Supreme People's Court in 2017 are as follows: patent and trademark-related intellectual property cases continued to account for the largest percentage of all of the accepted cases, with civil patent cases showing a relatively large increase and administrative trademark cases continuing to maintain a relatively rapid increase. The issues over which there were relatively numerous disputes in civil patent cases were the division of technical features and the interpretation of claims; and associated cases involving disputes over the rewarding and remuneration of service invention/creation inventors were relatively numerous. The focus of disputes in administrative cases on the grant and confirmation of patents continued to be centered on the assessment of novelty and inventiveness, and there was an increase in the percentage of cases involving procedural issues. Administrative patent law enforcement cases involving the issue of illegal procedure were relatively numerous, and the judiciary's function of monitoring administrative law enforcement acts is being continuously strengthened. In civil trademark cases, fair use, lawful provenance and prior rights have become defense grounds that are commonly used. Issues such as trademark similarity, similarity of goods and protection of prior rights remain the principal focal issues in administrative trademark cases. There was a decrease in the number of copyright cases, with the determination of originality remaining the main focus and difficulty in cases. In competition cases, trade secret infringement disputes and disputes involving the use of the proprietary name, packaging and trade dress of a well-known good without authorization accounted for a relatively large proportion. The leading role of trials of competition cases to the order of market competition was more prominent. The number of monopoly cases was relatively small, with the means of determining the relevant market and the issue of whether a business operator has a dominant market position being the main difficulties faced by courts at trial. New plant variety cases increased relatively quickly, and mainly involved the determination of sales infringement and the issue of infringement comparison. In technology contract and franchising contract dispute cases, such issues as breach of contract and contract termination were relatively prominent.

This year's report carefully selects 33 typical cases (associated cases in which the facts and legal issues were essentially identical are counted as one case) from among the intellectual property and competition cases concluded by the Supreme People's Court in 2017. From amongst them, we derived 42 law application issues with a certain guiding significance that reflect the Supreme People's Court's trial approaches and adjudication methods in handling new-type, difficult and complex cases in the intellectual property and competition fields, and hereby publish them.

I. Trial of Patent Cases

1 . Trial of Civil Patent Cases

(1) Reference value of opinions expressed by a party in a grant and confirmation procedure for another patent that has common priority with the patent in question

In retrial applicant, Dyson Technology Limited, v. respondent, Suzhou Su-Vac Electric Motor Co., Ltd. [(2017) Zui Gao Fa Min Shen No.1461], an invention patent infringement dispute, the Supreme People's Court pointed out that, when determining the meaning of a term in the claims, if the same patent applicant or patentee has given a clear statement on the same term in a grant and confirmation procedure for another patent that has common priority with the patent in question, reference may be made to the aforementioned statement.

(2) Restrictive conditions on application of the doctrine of estoppel in patent infringement cases

In retrial applicants, Cao Guilan, Hu Meiling, Jiang Li and Jiang Haotian, v. respondents, Chongqing Lifan Automobile Sales Co., Ltd. et al. [(2017) Zui Gao Fa Min Shen No.1826], an invention patent infringement dispute, the Supreme People's Court pointed out that, when a people's court applies the doctrine of estoppel in a patent infringement case, in determining whether the statement of opinions given by the rights holder satisfies the phrase “expressly denied” as specified in Article 13 of the Supreme People's Court, Interpretation on Several Issues Concerning the Application of the Law in the Trial of Patent Infringement Disputes (2), it shall conduct a comprehensive objective determination of the examination of the technical features at the patent grant or confirmation stage, and place emphasis on whether the narrowing statements made by the rights holder in respect of the technical solution were ultimately accepted by the adjudicators and whether this led to the patent application being granted or the patent rights being upheld.

(3) Criteria for dividing the technical features in claims in determining patent infringement.

In retrial applicant, Liu Zonggui, v. respondent, Taizhou FengLiLai Plastic Co., Ltd. [(2017) Zui Gao Fa Min Shen No.3802], a utility model patent infringement dispute, the Supreme People's Court pointed out that the appropriate division of the technical features in the patent claims is the basis for carrying out an infringement comparison. The division of the technical features should be done in light of the overall technical solution of the invention and consideration should be given to the smaller technical units that can relatively independently realize certain technical functions and generate relatively independent technical effects.

(4) Parts and components that only have a technical function do not constitute infringement of a design

In retrial applicant, Ou Jieren, v. respondent, Taizhou Jinshen Household Article Co., Ltd. [(2017) Zui Gao Fa Min Shen No.2649], a design patent infringement dispute, the Supreme People's Court pointed out that, where a product that infringes a design patent is used as a part or component in the manufacture and sale of another product and such part or component only has a technical function in the other product, such act does not constitute infringement.

(5) Determination of an act of manufacturing in a patent infringement case

In retrial applicant, Shenyang Zhongtie Safety Equipment Co., Ltd., v. respondents, Retarder and Speed Control System Research Center of the Harbin Railway Bureau and Ningbo Zhongtie Safety Equipment Manufacturing Co., Ltd., and plaintiff at first instance, Harbin Railway Bureau [(2017) Zui Gao Fa Min Zai No.122], a utility model patent infringement dispute, the Supreme People's Court pointed out that, although the alleged infringer did not directly manufacture the alleged infringing product, it can be assumed, based on factors such as its control over the manufacturing acts of the third party and the alleged infringer's enterprise name and proprietary product model numbers indicated on the final finished products, that the alleged infringer performed the manufacturing acts.

(6) In principle, no consideration given to technical features not of a shape or structural nature of a utility model patent when rendering a determination on a prior art defense

In retrial applicant, Tan Xining, v. respondent, Zhenjiang New Area Hengda Silica Gel Co., Ltd. [(2017) Zui Gao Fa Min Shen No.3712], a utility model patent and design patent infringement dispute, the Supreme People's Court pointed out that the target of protection of a utility model patent is a technical solution consisting of the shape, structure and the combination thereof and therefore the technical features not of a shape or structural nature in the claims do not contribute to the novelty or inventiveness of the claims. Accordingly, in a utility model patent infringement case, the rendering of a determination on a prior art defense does not, in principle, take into consideration whether the prior art discloses the technical features not of a shape or structural nature recorded in the claims.

2. Trial of Administrative Patent Cases

(7) Determination and handling of illegal procedure in patent administrative law enforcement

In retrial applicant, Xixia Longcheng Special Materials Co., Ltd., v. respondents, Yulin Municipal Intellectual Property Office and Shaanxi Coal and Chemical Industry Group Shenmu Tianyuan Chemical Industry Co., Ltd. [(2017) Zui Gao Fa Xing Zai No.84], a case involving the administrative handling of a patent dispute, the Supreme People's Court pointed out that, where the members of the collegial panel have been expressly changed but nevertheless sign the administrative decision in question, this is substantively equivalent to a situation where the “adjudicators did not render a ruling, and the renderers of the ruling did not adjudicate”, which constitutes a serious violation of the statutory procedure. In principle, the collegiate panel that rendered the administrative decision in question should have been composed of working personnel of the administrative authority who have patent administrative law enforcement qualifications. Even if they are law enforcement personnel assigned from elsewhere, they are likewise required to carry out official and complete document procedures.

(8) Determination of the start of the time limit for instituting an administrative legal action

In retrial applicants, Beijing Tailong Automatic Equipment Co., Ltd. and Wang Yu, v. respondent, Henan Provincial Intellectual Property Office [(2017) Zui Gao Fa Xing Shen No. 2778], a miscellaneous administrative dispute, the Supreme People's Court pointed out that the time limit for instituting an administrative legal action starts to run from the date on which the details of the specific administrative act are known or ought to have been known or on the date on which the specific administrative act is carried out, not from the date on which it is learned or ought to have been learned that the specific administrative act is illegal.

(9) Determination of whether the description is clear and complete

In retrial applicant, Staubli Faverges SCA, v. respondent, Changshu Textile Machinery Works Co., Ltd., and defendant at first instance and appellee at appeal, Patent Reexamination Board of the State Intellectual Property Office [(2016) Zui Gao Fa Xing Zai No.95], an administrative dispute involving the invalidation of an invention patent, the Supreme People's Court pointed out that, in determining whether the patent description is clear and complete, the criteria for such determination are whether a person skilled in the art understands the technical solution and whether he/she can realize the same. If a person skilled in the art, when reading the information disclosed in the description, can understand, discover and correct errors therein, and such understanding and correction would not result in a change in the technical solution set forth in the claims, then permission should be given to correct and understand the errors existing in the patent description.

(10) Determination of whether claims are based on the description

In retrial applicant, Sensing Electronics Co., Ltd., v. respondent, Patent Reexamination Board of the State Intellectual Property Office, and third party at first instance, Ningbo Xunqiang Electronic Technology Co., Ltd. [(2016) Zui Gao Fa Xing Zai No.19], an administrative dispute involving the invalidation of an invention patent (the “electronic article surveillance marker” invention patent invalidation dispute), the Supreme People's Court pointed out that the rights holder has the right on the basis of the specific embodiments fully disclosed in the description to write up the claim by means of reasonable generalization so as to secure a suitable scope of protection. The scope of protection delimited in the claims should be consistent with the technical contribution of the patent in question and the scope fully disclosed in the description.

(11) Determining the technical issue that the patent in question proposes to solve when determining whether the claims are based on the description

In the aforementioned “electronic article surveillance marker” invention patent invalidation dispute, the Supreme People's Court pointed out that, when determining whether the claims are based on the description, consideration may be given to the background technology recorded in the description and the defects existing therein, the “objective of the invention”, the “technical issue to be solved” and the “beneficial effect” recorded in the details on the invention and the content in the specific embodiments relating to the “technical issue” and “beneficial effect” in determining the technical issue that the patent in question is to solve and the technical effect it is to achieve. The “technical issue actually solved” as determined anew based on the technical features that distinguish the claims from the “closest prior art” may be different from the technical issue that the patent in question is intended to solve and cannot directly serve as the basis for determining whether the claims are based on the description.

(12) Relationship between whether the claims are based on the description and whether the claims constitute an inventive step

In the aforementioned “electronic article surveillance marker” invention patent invalidation dispute, the Supreme People's Court pointed out that, even if the claims constitute an inventive step, whether the various technical features, including the distinguishing technical features, recorded therein are properly generalized and whether the technical solution delimited by the claims is on the whole properly generalized still require determination based on the fourth paragraph of Article 26 of the Patent Law.

(13) Nature of Markush-type claims

In retrial applicant, Patent Reexamination Board of the State Intellectual Property Office, v. respondent, Beijing Winsunny Pharmaceutical Co., Ltd., and third party at first instance, Daiichi Sankyo Company, Limited [(2016) Zui Gao Fa Xing Zai No.41], an administrative dispute involving the invalidation of an invention patent (the “Markush-type claim” patent invalidation dispute), the Supreme People's Court pointed out that a Markush-type claim for a compound should be understood as a generalized technical solution, not an assemblage of numerous compounds.

(14) Principle for revising a Markush-type claim in an invalidation procedure

In the aforementioned “Markush-type claim” invention patent invalidation dispute, the Supreme People's Court pointed out that the principle for permitting a revision to be made to a Markushtype claim is that such revision may not generate a class of compounds or a single compound with a new function or effect, while, however, also fully taking into consideration the factors of the case in question.

(15) Method of determining the inventiveness of a Markush-type claim

In the aforementioned “Markush-type claim” invention patent invalidation dispute, the Supreme People's Court pointed out that the determination of the inventiveness of a Markush-type claim for a compound should comply with the basic method for determining inventiveness, i.e. the “three-step method” specified in the Patent Examination Guidelines. An unexpected technical effect is a secondary factor in determining inventiveness and, in general, the “three-step method” should not be skipped over in directly applying an unexpected technical effect in determining whether a patent application constitutes an inventive step.

(16) Determination of distinguishing technical features in a design patent invalidation case

In retrial applicant, YKK Corporation, v. respondent, Patent Reexamination Board of the State Intellectual Property Office, and third parties at first instance, Ideal Fastener (Guangdong) Industries Limited and KEE (Guangdong) Garment Accessories Limited [(2016) Zui Gao Fa Xing Shen No.3687], an administrative dispute involving the invalidation of a design patent, the Supreme People's Court pointed out that where a feature is not embodied in any manner in the main view of a design patent and is not clearly shown in the 3D view, it does not constitute a technical feature that distinguishes the design patent from the design being compared.

II. Trial of Trademark Cases

1 . Trial of Civil Trademark Cases

(17) Relationship between the protection of a registered trademark and the notoriety of the trademark on the alleged infringing goods

In retrial applicant, Cao Xiaodong, v. respondent, Yunnan Xiaguan Tuocha Tea (Group) Co., Ltd. [(2017) Zui Gao Fa Min Zai No.273], a trademark infringement dispute, the Supreme People's Court pointed out that, a registered trademark being a representativetype of civil right, the holder of the rights therein not only has the right to bar others from using representations of such registered trademark for identical or similar goods, but more importantly has the right to use representations of its registered trademark to establish among the relevant public an association between representations of the trademark in question and the source of its goods. Whether there will be confusion among, or misidentification by, the relevant public not only includes its misidentification of goods bearing the alleged infringing representation as goods of the trademark rights holder or mistaken belief that they have a certain connection with the trademark rights holder, but also includes its misidentification of goods of the trademark rights holder as goods of the alleged infringer or mistaken belief that there is a certain connection between the trademark rights holder and the alleged infringer.

(18) Factors to consider in the coexistence of a trademark and a trade name against a special historical background

In complainant, Taiyuan Da Ning Tang Pharmaceutical Co., Ltd., v. respondent, Shanxi Medicinal Materials Co., Ltd. [(2015) Min Ti Zi No. 46], a trademark infringement and unfair competition dispute, the Supreme People's Court pointed out that, against a special historical background, in determining whether the use of a trade name that is identical to another's trademark constitutes trademark infringement and unfair competition, comprehensive consideration needs to be carried out from perspectives such as the historical heritage, current situation, application of the law and social effect.

(19) Determination of statutory generic name

In retrial applicant, Fuzhou Rice Mill, v. respondents, Wuchang Jinfutai Agriculture Co., Ltd., Fuzhou Jinshan Dajingcheng Branch of Fuzhou Xinhuadu General Merchandise Co., Ltd. et al. [(2016) Zui Gao Fa Min Zai No.374], a trademark infringement dispute (the “Daohuaxiang” trademark infringement dispute), the Supreme People's Court pointed out that the meaning of “generic name” as specified in the measures for the approval of crop varieties and of the same phrase for the purposes of trademark law are not entirely identical, and determination of whether the name of a variety is a statutory generic name for the purposes of trademark law should not solely be based on the name of the variety appearing in the approval announcement.

(20) Determination of a generic name established by usage

In the aforementioned “Daohuaxiang” trademark infringement dispute, the Supreme People's Court pointed out that the relevant market for a product is not restricted to a specific region but rather is national in scope and whether a name is a generic name established by usage should be determined based on the common knowledge of the relevant public nationwide.

(21) Fair use of the name of a crop variety

In the aforementioned “Daohuaxiang” trademark infringement dispute, the Supreme People's Court pointed out that, where the prior registered trademark right of another exists, the name of a crop variety appearing in the approval notice may be used in a standardized fashion for goods processed from the cultivated and harvested variety in question, but such usage is limited solely to indicating the source of the crop variety and may not be used in a prominent manner.

(22) Determination of fair use in a trademark infringement case

In retrial applicant, Feng Yin, v. respondent, Xi'an Qujiang Yuejianglou Catering, Leisure and Cultural Co., Ltd. [(2017) Zui Gao Fa Min Shen No. 4920], a trademark infringement dispute, the Supreme People's Court pointed out that, where: the main objective of the alleged infringer in using the relevant symbol in its enterprise name and other commercial activities is to objectively describe and indicate the features of its services, in the course of actual use the alleged infringer never uses as a whole a device and text combination identical to the trademark in question, and there is no evidence showing that the alleged infringer's objective in using the relevant symbol and text was to take advantage of the commercial reputation of the trademark in question, it may be determined that the alleged infringing act could not possibly cause confusion among, and misidentification by, the relevant public and therefore does not constitute infringement of the trademark rights in question.

2 . Trial of Administrative Trademark Cases

(23) Factors to consider in determining the similarity of trademarks

In retrial applicant, Sichuan Yibin Wuliangye Group Co., Ltd., v. respondents, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce and Gansu Binhe Food Industry (Group) Co., Ltd. [(2014) Zhi Xing Zi No. 37], an administrative dispute involving the review of a trademark opposition, the Supreme People's Court pointed out that, in determining whether the opposed trademark and the reference mark constitute similar trademarks used for identical or similar goods, comprehensive consideration needs to be given to factors such as the constituent elements of the opposed trademark and reference mark, and the prior use and notoriety of the opposed trademark. If the same would not cause confusion among, and misidentification by, the relevant public, a determination that the opposed trademark and the reference mark are not similar should be rendered.

(24) Proof of the subject qualified to claim prior copyright

In retrial applicant, Wenzhou Yijiuliang Optical Co., Ltd., v. respondent, Dama SpA, and appellee at appeal, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce [(2017) Zui Gao Fa Xing Shen No.7174], an administrative dispute involving a petition for the invalidation of a trademark, the Supreme People's Court pointed out that both a copyright holder and a party with an immediate interest in a copyright may claim prior copyright in accordance with Article 31 of the Trademark Law. A copyright registration certificate dated later than the filing date for the disputed trademark cannot independently serve as the title certificate for the prior copyright. A registered trademark certificate dated before the filing date for the disputed trademark cannot serve as the title certificate for the copyright but may serve as preliminary evidence for determining that the trademark rights holder is an immediately interested party with the right to claim copyright in the trademark representation.

(25) Review and determination of whether a third party has prior copyright

In retrial applicant, Jiejie Co., Ltd., v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce, and third party at first instance, Jinhua B&F Cosmetics Co., Ltd. [(2017) Zui Gao Fa Xing Zai No.35], an administrative dispute involving review of a trademark opposition, the Supreme People's Court pointed out that, with respect to whether a party has prior copyright, it is necessary to comprehensively consider the relevant evidence in making the determination. When the copyright registration certificate is dated later than the filing date for the disputed trademark, consideration may be given to the trademark registration certificate, website pages that include representations of the trademark, content of the newspaper/periodical that records the process of creating the work, the physical product, proof of transfer of the copyright and other such evidence. When confirming that the relevant evidence is mutually corroborating and has formed a complete evidence chain, a determination that the party in question has prior copyright in the trademark representation may be rendered.

(26) An “image” that is subject to protection as a prior right should be identifiable

In retrial applicant, Michael Jeffrey Jordan, v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce, and third party at first instance, Qiaodan Sports Co., Ltd. [(2015) Zhi Xing Zi No.332], an administrative trademark dispute, the Supreme People's Court pointed out that the “image” that is protected by the right to one's image should be identifiable. It should include personal features that allow the public to identify the corresponding subject of the rights, i.e. the specific natural person, and thereby can expressly substitute for such specific subject of the rights.

III. Trial of Copyright Cases

(27) Criteria for the determination of model works

In retrial applicant, Shenzhen Feipengda Product Manufacturing Co., Ltd., v. respondent, Beijing AVIC Zhicheng Technology Co., Ltd. [(2017) Zui Gao Fa Min Zai No.353], a copyright infringement dispute, the Supreme People's Court pointed out that, when determining whether a model constitutes a model work subject to the protection of the Copyright Law, the provision on model works of item (13) of Article 4 and the provisions on works of Article 2 of the Implementing Regulations for the Copyright Law may not be applied separately. Where only the provision of Item (13) of Article 4 of the Implementing Regulations for the Copyright Law is satisfied, a determination that a model work subject to the protection of the Copyright Law is constituted may not be rendered.

(28) Calculation of the measure of damages for infringement when another's work is used as trademark

In retrial applicant, Li Yanxia, v. respondent, Jilin Yongpeng Non-Staple Agricultural Products Development Co., Ltd., and third party at first instance, Nanguan District Benyuan Design Studio [(2017) Zui Gao Fa Min Shen No.2348], a copyright infringement dispute, the Supreme People's Court pointed out that, where the use of another's work as a trademark without authorization constitutes infringement of another's copyright, calculation of the measure of damages should not be based on the losses of the rights holder or the benefits derived by the infringer, but should mainly take into consideration the copyright royalties. The alleged infringer's trademark design expenses may serve as reference in determining those copyright royalties.

IV. Trial of Unfair Competition Cases

(29) The “good” and the “packaging and trade dress” in the proprietary packaging and trade dress of a well-known good should have a specific one-to-one relationship

In appellant, Guangdong Jiaduobao Beverage & Food Co., Ltd., v. appellees, Guangzhou Pharmaceutical Holdings Limited and Guangzhou WangLaoJi Great Health Industry Company Limited [(2015) Min San Zhong Zi No.2 and No.3], two disputes involving the use of the proprietary packaging and trade dress of a well-known good without authorization (the “Red Can” proprietary packaging and trade dress disputes), the Supreme People's Court pointed out that there is an intimate and inseparable relationship between the “well-known good” and “proprietary packaging and trade dress” specified in Item (2) of Article 5 of the Anti-unfair Competition Law and it is only goods on which the proprietary packaging and trade dress is used that can become a target addressed by the Anti-unfair Competition Law. An abstract description of a good or a product concept that lacks a certain connotation is divorced from the specific good on which the packaging and trade dress is reliant, lacks a specific act of usage that is available for evaluation and lacks the significance for carrying out an evaluation based on Item (2) of Article 5 of the Anti-unfair Competition Law.

(30) Factors to consider in determining the vesting of the rights and interests in the proprietary packaging and trade dress of a wellknown good

In the aforementioned “Red Can” proprietary packaging and trade dress disputes, the Supreme People's Court pointed out that, when determining the vesting of the rights and interests in proprietary packaging and trade dress, it is not only necessary to encourage honest labor, subject to compliance with the principle of good faith, but also to respect the consumer's knowledge of the one-toone relationship of the provenance of the goods objectively arising based on the distinctive features of the packaging and trade dress themselves.

V. Trial of New Plant Variety Cases

(31) Meaning of “sale” as specified in Article 6 of the Regulations for the Protection of New Varieties of Plants

In retrial applicant, Laizhou Yongheng Sophora Japonica Research Institute, v. respondent, Ge Yanjun [(2017) Zui Gao Fa Min Shen No.4999], a new plant variety infringement dispute, the Supreme People's Court pointed out that, with respect to interpretation of the meaning of the term “sale” as specified in Article 6 of the Regulations for the Protection of New Varieties of Plants, account should be taken of the first paragraph of Article 5 of the International Convention for the Protection of New Varieties of Plants (1978 Edition), to which China has acceded. Based on the principle of consistent interpretation of international and domestic law, the term “sale” as used in Article 6 of the Regulations for the Protection of New Varieties of Plants should include the act of offering to sell.

VI. Trial of Technology Contract Cases

(32) Determination of the contractual objectives in an agreement for the industrial application of a technology

In retrial applicant, Shaanxi Tianbao Soya Food Technological Research Institute, v. respondent, Fenzhou Yuyuan Native Produce Co., Ltd. [(2016) Zui Gao Fa Min Zai No.251], a technology contract dispute, the Supreme People's Court pointed out that, whether products complying with the contract can be produced and whether such products can be placed on the market for sale, whether they are good for sale, whether they present room for profit, etc. are not questions at the same level. If, in a contract involving the industrial application of a technology, there is no express provision to that effect, the commercialization of the product should not be determined as being one of the objectives of the contract.

VII. Intellectual property litigation procedure and evidence

1 . Civil intellectual property procedure and evidence

(33) The place where goods are received after an online purchase should not be deemed the place of infringement in an intellectual property and unfair competition case

In appellants, Guangdong Martniel Clothing Co., Ltd. and Zhou Lelun, v. appellee, New Balance Trading (China) Co., Ltd., and defendant at first instance, Nanjing Orient Department Store Co., Ltd. [(2016) Zui Gao Fa Min Xia Zhong No.107], a case involving an opposition to jurisdiction in an unfair competition dispute, the Supreme People's Court pointed out that, in an intellectual property infringement and unfair competition case, where the plaintiff purchases the alleged infringing product online, Article 20 of the judicial interpretation for the Civil Procedure Law on treating the place where goods purchased online are received as the place of infringement should not be applied when determining territorial jurisdiction in a case.

(34) Review and determination of the evidence for a notarial certificate involving a market statistical survey

In retrial applicant, Hebei Liurenkao Beverage Co., Ltd., v. respondent, Hebei Yangyuan Zhihui Beverage Co., Ltd., and defendant at first instance, Jinhua Jindong District Ye Baosen Non-Staple Food Store [(2017) Zui Gao Fa Min Shen No.3918], a dispute involving the use of the proprietary packaging and trade dress of a well-known good without authorization, the Supreme People's Court pointed out that, in the review and determination of the evidence for a notarial certificate involving a market statistical survey, the objectivity, scientific basis and legitimacy of the market statistical survey should be specifically reviewed, and it should not be automatically accepted just because it has been notarized.

(35) A prior art defense asserted in an application for a retrial procedure on the grounds of new evidence should be rejected

In retrial applicant, Tangshan Xianfeng Printing Machine Co., Ltd., v. respondent, Masterwork Machinery Co., Ltd., and defendant at first instance, Changzhou Hengxin Packing & Printing Co., Ltd. [(2017) Zui Gao Fa Min Shen No.768], an invention patent infringement dispute, the Supreme People's Court pointed out that, in a patent infringement case, where the alleged infringer in its application for a retrial procedure claims a prior art defense on the grounds of new evidence, although it appears on the surface that it is applying for retrial on the grounds of new evidence, in essence this is equivalent to a separate presentation of a new prior art defense. If an alleged infringer were permitted in an application for a retrial procedure to present without limitation new prior art defenses, this would clearly be unfair to the patentee that is required to solidify its claims before the conclusion of arguments in the court of first instance, and would constitute an ambush on the patentee's lawsuit. Additionally it would vitiate the procedures at first instance and appeal.

(36) For a defense of lawful provenance, the provision of relevant evidence that is in keeping with trade practice is required

In retrial applicant, Ningbo Oulin Industry Co., Ltd., v. respondent, Ningbo Bosheng Valve and Pipe Fitting Co., Ltd., and appellant at appeal, Ningbo Oulin Kitchen Utensils Co., Ltd. [(2017) Zui Gao Fa Min Shen No.1671], a design patent infringement dispute, the Supreme People's Court pointed out that a “representation” issued by a party concerning its production and provision of the alleged infringing product to another party is a statement by such party, and if the patentee does not accept such representation and there is no other objective evidence corroborating it, a finding that the defense of lawful provenance is untenable should be rendered.

2 . Administrative intellectual property procedure and evidence

(37) Qualifications of a petitioner lodging a petition for invalidation where a design patent conflicts with another's lawful rights secured at an earlier date

In retrial applicant, Staples Inc., v. respondent, Luo Shikai, and defendant at first instance, Patent Reexamination Board of the State Intellectual Property Office [(2017) Zui Gao Fa Xing Shen No.8622], an administrative dispute involving the invalidation of a design patent (the “paper shredder” design patent invalidation dispute), the Supreme People's Court pointed out that grounds for the invalidation of patents may be divided into two types: absolute invalidation grounds and relative invalidation grounds. These are very different in terms of the essence of the object that they address, the legislative objective, etc. The grounds for invalidation in a conflict between a design patent and another's prior lawful rights are relative grounds. When the provision of Article 45 of the Patent Law concerning the scope of petitioners is applied to the grounds for invalidation in a conflict of rights, based on such factors as the essential attribute and legislative objective of the relative invalidation grounds as well as the legal order effect, the subject qualifications of the petitioner for invalidation should be subject to limitations, such that, in principle, only the holder of the prior lawful rights and materially interested parties can make such a claim.

(38) The principle of invariability of parties may be applied in administrative procedures for the invalidation of patents

In the aforementioned “paper shredder” design patent invalidation dispute, the Supreme people's court pointed out that, in an administrative legal action, after the People's Court has accepted the relevant lawsuit and in order to ensure the stability of the procedure and avoid the occurrence of uncertainties, the subject qualifications of a party are not lost if there is a subsequent change in the legal relationship relating to the subject matter of the lawsuit. An administrative procedure for the invalidation of a patent is a quasi-judicial procedure and the principle of the invariability of parties likewise has reference significance in such a procedure. With respect to a petitioner that is qualified at the time of the initiation of an administrative procedure for the invalidation of a patent, even if a change subsequently occurs in the legal relationship relating to the subject matter of the lawsuit, such petitioner does not automatically lose its subject qualifications as a result thereof.

(39) Conditions for the acceptance of an application for retrial in respect of a new judgment arising from an administrative legal action instituted in respect of an administrative ruling constrained by a prior effective judgment

In retrial applicant, Suntory Holdings Limited, v. respondents, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce and the successor to the trademark rights of Hangzhou Baoluo Hotel Management Group Co., Ltd. (third party at first instance), Zhejiang Xiangwang Technology Co., Ltd. [(2017) Zui Gao Fa Xing Shen No.5093], an administrative dispute involving review of a trademark cancellation, the Supreme People's Court pointed out that, where a party again institutes an administrative legal action in respect of an administrative ruling rendered by the Trademark Review and Adjudication Board based on an effective court judgment and the people's court renders a judgment upholding the administrative ruling based on the findings in the original effective judgment, the question of whether such party can apply for a retrial in respect of the new judgment should take into consideration such factors as the legal nature of the administrative ruling in question, the contents of the new judgment and prevention to the extent possible of reiterating legal actions. If the administrative ruling in question is constrained entirely by the prior effective judgment, and the new ruling is rendered based on the facts and grounds determined in the prior effective judgment without a substantive review of the administrative ruling in question, an application for retrial in respect of the new judgment should not be permitted so as to avoid reiterating legal actions.

(40) A people's court may ex officio render a determination on a key fact inadvertently overlooked by the administrative authority

In retrial applicant, PrAna Living LLC, v. respondent, Trademark Review and Adjudication Board of the State Administration for Industry and Commerce [(2017) Zui Gao Fa Xing Zai No.10], an administrative dispute involving review of a rejection of a trademark application, the Supreme People's Court pointed out that when an applicant claims priority in applying to register a trademark and the administrative authority inadvertently overlooks something when determining whether the applied for trademark has priority, resulting in errors in the decision in question, the people's court should lawfully render its judgment/ruling on the basis of the relevant facts that it ascertains.

(41) A people's court may partially quash a patent invalidation decision

In the aforementioned “electronic article surveillance marker” invention patent invalidation dispute, the Supreme People's Court pointed out that each of the findings relating to the patent invalidation decision in question may be dealt with separately and the people's court may quash those portions of the invalidation decision where the findings are erroneous.

(42) Separate Chinese translations need not necessarily be provided for all foreign language exhibits in an invalidation procedure

In retrial applicant, ZTE Corporation, v. respondents, Patent Reexamination Board of the State Intellectual Property Office and InterDigital, Inc. [(2017) Zui Gao Fa Xing Shen No.4798], an administrative dispute involving the invalidation of an invention patent, the Supreme People's Court pointed out that, in a procedure for the invalidation of a patent, the provision of separate Chinese translations for each foreign language exhibit was not necessarily needed, and the State Council's patent authority could decide, depending on the specific circumstances, whether it was necessary to require the party to provide a Chinese translation. Determination of the necessity of providing a Chinese translation usually requires consideration of such factors as facilitating the Patent Reexamination Board's and the other party's understanding of the content of the exhibits, ensuring administrative efficiency, ensuring and facilitating the parties' exercise of their right to express their opinions, etc., and accordingly, under special circumstances there is no need to provide separate Chinese translations.

clp reference:5100/18.04.24 published:2018-04-24