Interpretations on Application of Law for Trial of Cases on Disputes over Patent Infringement I

Interpretation of the Supreme People's Court on Several Issues Concerning the

Application of Law to the Trial of Patent Dispute Cases

(Adopted on 19 June 2001 at the 1180th Meeting of the Adjudication Committee of the

Supreme People's Court)

With a view to duly adjudicating cases of patent disputes, the following Provisions are

made in accordance with the provisions of the General Principles of the Civil Law of the

People's Republic of China (hereinafter referred to as the General Principles of the Civil

Law), the Patent Law of the People's Republic of China, (hereinafter referred to as the

Patent Law), the Civil Procedure Law of the People's Republic of China and the

Administrative Procedure Law of the People's Republic of China:

Article 1 The people's court accepts following cases of patent disputes:

1. disputes over the ownership of the right to apply for patent;

2. disputes over the ownership of the patent right;

3. disputes over contracts for assignment of the patent right or the right to apply for

patent;

4. disputes arising from patent infringement;

5. disputes arising from counterfeiting other persons' patents; 6. disputes over the

exploitation fee after the publication of the applications for patent for invention and

before the grant of the patent right;

7. disputes over the reward and remuneration for the inventors or creators of service

inventions;

8. cases of pre-litigation requests for stopping infringement or for property preservation;

9. disputes over the qualification of inventors or creators;

10. cases of dissatisfaction with the reexamination decisions by the Patent

Reexamination Board to uphold rejection of applications;

11. cases of dissatisfaction with the reexamination decisions by the Patent

Reexamination Board on requests for invalidation of the patent right;

12. cases of dissatisfaction with the reexamination decisions by the Patent

Administrative Organ under the State Council on execution of compulsory licenses;

13. cases of dissatisfaction with the adjudication by the Patent Administrative Organ

under the State Council on the royalties for execution of compulsory licenses;

14. cases of dissatisfaction with the administrative reexamination decisions by the

Patent Administrative Organ under the State Council;

15. cases of dissatisfaction with the administrative decisions by the administrative

authorities for patent affairs; and

16. any other cases of patent disputes.

Article 2 Patent dispute cases of first instance shall be under the jurisdiction of the

intermediate people' courts of the seats of the People's Government of the Provinces,

Autonomous Regions and Municipalities under the Central Government and the

intermediate people' courts designated by the Supreme People's Court.

Article 3 Where any interested party, dissatisfied with the reexamination decision made

by the Patent Reexamination Board after 1 July 2001 on the requests for revocation of a

patent for utility model or design, institutes a lawsuit in the people's court, the people's

court does not accept the lawsuit.

Article 4 Where any interested party, dissatisfied with the reexamination decision made

by the Patent Reexamination Board after 1 July 2001 to uphold the rejection of the

application for patent for utility model or design or with the decision on the request for

invalidation of the patent right for utility model or design, institutes a lawsuit in the

people's court, the people's court shall accept the lawsuit.

Article 5 Lawsuits instituted against acts of infringement of the patent right shall be

under the jurisdiction of the people's court of the place where the defendant has its or

his domicile or of the place where the infringing acts take place. Places where acts of

infringement take place include: places where acts take place of manufacturing, using,

offering for sale, selling or importing products accused of infringing a patent for

invention or utility model; places where the acts of using a patented process takes place

and where acts take place of using, offering for sale, selling or importing products

acquired directly according to the patented process; places where acts of

manufacturing, selling or importing products of patented designs; places where acts of

counterfeiting patents of other persons take place; and places where consequences of

the preceding infringing acts arise.

Article 6 Where a plaintiff takes action against the manufacturer of an infringing

product, but not against the seller as well and the places where the infringing products

are manufactured and sold are not the same place, the people's court of the place of the

manufacture has the jurisdiction; where the action is taken with both the manufacturer

and seller accused as the co-defendants, the people's court of the place where the

infringing products are sold has the jurisdiction. Where the seller is a subsidiary of the

manufacturer and the plaintiff takes action against the act of the infringing product

manufacturer to manufacture and sell the product, the people's court of the place where

the products are sold has the jurisdiction.

Article 7 Where a plaintiff institutes a lawsuit with respect to the patent application filed

before 1 January 1993 and on the basis of the patent for invention of process granted to

the application, the lawsuit is under the jurisdiction as determined in the light of the

provisions of Articles 5 and 6 of these Provisions. The people's court, in substantial

hearing of the preceding cases, applies the provision that a patent for invention of

process is not extended to the product.

Article 8 Any plaintiff takes action against an infringement of patent right for utility

model shall produce the search report made by the Patent Administrative Organ under

the State Council when instituting the lawsuit. Where any defendant involved in the case

of dispute arising from the infringement of the patent right for utility model or design

shall, when making its or his defence, file a request for invalidation of the plaintiff's

patent right.

Article 9 Where the defendant files a request for invalidation of the patent right when

making its or his defence in the case received by the people's court of dispute as arising

from the infringement of the patent right for utility model or design, the people's court

shall suspend the legal proceedings. However, under any one of the following

circumstances, the legal proceedings may not be suspended:

(1) where no technical documentation is found in the search report produced by the

plaintiff that results in the loss of novelty or inventiveness of the patent for utility model;

(2) where the defendant's evidence is sufficient to prove that its or his used technology

has been known to the public;

(3) where the proof or basis the defendant has furnished for requesting the invalidation

of the patent right in question is obviously insufficient; or

(4) any other circumstances where the people's court finds that the legal proceedings

should not be suspended.

Article 10 Where the defendant files a request for invalidation of the patent right in

question after the expiration of the time for making defence in a case received by the

people's court of dispute arising from the infringement of the patent right for utility model

or design, the people's court shall not suspend the legal proceedings, except that it is

found necessary to do so upon consideration.

Article 11 Where the defendant files a request for invalidation of the patent right in

question in a case received by the people's court of dispute arising from infringement of

patent right for design or one from infringement of patent right for utility model or design

in which the Patent Reexamination Board uphold, upon examination, the patent right,

the people's court may not suspend the legal proceedings.

Article 12 Where the people's court decides to suspend the legal proceedings, the

patentee or the interested party requests for ordering the defendant to desist from the

relevant act or for taking other measures to halt the spread of damages caused by the

infringement and provides guaranty, and the people's court, upon consideration, finds it

in compliance with the provisions of the relevant laws, the people's court may

simultaneously make the relevant ruling when deciding to suspend the legal

proceedings.

Article 13 Where the people's court preserves property of the patent right, it shall send

the Patent Administrative Organ under the State Council a notification for assistance in

execution of the property preservation, indicating the matters for which assistance is

sought and the duration of the patent right preservation, with the people's court ruling

paper attached. For a patent right preservation that shall not last more than six months,

the term is counted from the date the Patent Administrative Organ under the State

Council receives the notification of assistance for execution. If it is still necessary to

continue to take the measure to preserve the patent right, the people's court shall send

to the Patent Administrative Organ under the State Council the notification of assistance

for executing the continued preservation before the expiration of the time limit fixed for

the preservation. Where such notification is not delivered before the expiration of the

time limit fixed for the preservation, the property preservation of the patent right is

deemed to have been automatically released. The people's court may take the property

preservation measure for the pledged patent right, the pledge’s priority of compensation

is not affected by the preservation measure; the exclusive licensing contract concluded

between the patentee and the licensee does not affect the people's court's adopting the

property preservation of the patent right. The people's court shall not re-preserve the

patent right that has been preserved.

Article 14 Where in respect of any invention-creation completed before 1 July 2001 by

making use of the material and/or technical condition of the entity to which the inventor

or creator belongs, the entity and the inventor or creator has concluded a contract,

agreeing on the ownership of the right to apply for patent and of the patent right, the

agreement shall be observed.

Article 15 Where any case received by the people's court of dispute arising from patent

right infringement relates to conflict of rights, the legitimate rights and interests of the

interested party that enjoys the prior right according to law shall be protected.

Article 16 The prior legitimate rights referred to in Article 23 of the Patent Law include

the trademark right, copyright, right of enterprise name, portrait right and the right to use

the package or decoration peculiar to any known goods, etc.

Article 17 The first paragraph "the extent of protection of the right for invention or utility

model shall be determined by the terms of the claims. The description and the

appended drawings may be used to interpret the claims" of Article 56 of the Patent Law

means that the extent of protection of patent right should be determined by the

necessary technical features expressly stated in the claims, including the extent as

determined by the features equivalent to the necessary technical features. The

equivalent features refer to the features which use substantially the same means,

perform substantially the same function and produce substantially the same as the

stated technical features and which can be contemplated by an ordinarily skilled artisan

in the art without inventive labor.

Article 18 Where any act of patent infringement takes place before 1 July 2001, the civil

liability under the Patent Law before this revision shall apply; where such act takes

place after 1 July 2001, the provisions of the revised Patent Law shall apply to impose

the civil liability.

Article 19 Where any one counterfeits another person's patent, the people's court may

impose, on it or him, the civil liability according to the provision of Article 58 of the

Patent Law. Where the administrative authority for patent work does not impose any

administrative penalty, the people's court may impose civil penalty pursuant to the

provision of Article 134, paragraph three, of the General Principles of the Civil Law, and

the amount of the applicable fine in civil terms may be determined in the light of the

provision of Article 58 of the Patent Law.