Selected Intellectual Property Cases in China. Selected Intellectual Property Cases in China

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1 Selected Intellectual Property Cases in China Selected Intellectual Property Cases in China

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3 Preface In April 2012, the Supreme People's Court of China published top 10 cases and 50 typical cases of the Chinese judicial protection for IPRs in Covering all IP fields including patent, trademark, copyright and unfair competition, etc., these cases as published not only exhibit the great achievements of the Chinese courts in protecting IP rights, but also constitute valuable resources for legal practitioners, scholars, and the business community since they have provided the guidance and examples for the protection of Intellectual Property. To have our friends and clients well advised with information on the IP protection in China, experienced attorneys of CCPIT Patent and Trademark Law Office have ever selected a number of IPR-related cases with directive significance rendered by the courts of China in the past couple of years by compiling the abstracts that include the main facts, key legal issues, judges views and bases of courts decisions etc. and had some of them put in the first and second volume of Selected IP Cases in China. To continue the efforts, we are now pleased to present the 4th Volume with the case abstracts as selected from the above published cases. Aiming at helping our friends and clients effectively enforce their IP rights in China, the abstracts as such compiled are intended to impart to readers a deeper understanding of the features of the Chinese judicial protection for IPRs and illustrate how the relevant Chinese IP laws and basic legal principles are applied to the judicial trials. MA Hao President, Patent Attorney CCPIT Patent and Trademark Law Office

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5 Contents Patent Double Crane vs. Xiangbei Welman 1 Duo Leng Gang Case vs. Lian Jie Zhu Gang 5 Gree Electric vs. Midea Electric 9 Jiangxi Yintao 16 Junhao vs. Jiayi 20 Kaisai Materials Case 24 Luo Shizhong vs. Lanying Plastic-revised 26 Qiu Zeyou vs. Luban 31 Simcere vs.patent Reexamination Board 36 Yongwei XU vs. Huatuo 40 Zheng Yali vs. Seiko Epson,etc 45 Trademark BEST BUY vs. TRAB 51 Caster Brothers vs. Li Daozhi 56 Huaxia vs. Nissan 61 Qihao vs. Woodpecker 66 Wushutian vs. Fushibao - revised 73 Unfair Competition Yushengtang vs. Kangshiyuan 77 Trade Secret Yidege vs.chuanren 81 Copyright Chen Jian vs. Wanpu Corporation 85

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7 Retrial requested by Beijing Double-Crane Pharmaceutical Co. Ltd. against Xiangbei Welman Pharmaceutical Co. Ltd. for patent invalidation Case No.: 8 (2011)) Ruling dates: December 17, 2011 In December of 2002, Beijing Double-Crane Pharmaceutical Co. Ltd. (hereinafter referred to Double-Crane ) filed with the Patent Reexamination Board of SIPO a request for invalidation of the patent No (hereinafter referred to the Chinese patent) owned by Xiangbei Welman Pharmaceutical Co. Ltd. (hereinafter referred to Xiangbei ). The Patent Reexamination Board of SIPO made the Invalidation Decision No on August 1, 2003, announcing that all the claims of the Chinese patent are invalid. Dissatisfied with this invalidation decision, Xiangbei instituted legal proceedings against the decision at the People s No. 1 Intermediate Court of Beijing,and the court thereafter made a judgment upholding the Invalidation Decision No Again,dissatisfied with the judgment of the first instance, Xiangbei appealed it to the Beijing High Court. In April 2010, the Beijing High Court made the final judgment that revoked the invalidation decision made by the Patent Reexamination Board of SIPO and requested that the Patent Reexamination Board of SIPO reissued an invalidation decision for the disputed patent. Double-Crane did not accept the final judgment of the Beijing High Court and filed a retrial request to the Supreme Court against the final judgment in September, The Supreme Court made a written order that accepted the retrial request in March, 2011, and made the retrial judgment that revoked the final judgment of the Beijing High Court and upheld the invalidation decision No made by the Patent Reexamination Board of SIPO on December, 17,2011. Facts: On December 6, 2000, Xiangbei was granted with a patent for invention (filing date: June 11,1997) entitled as Antibiotic complex against β-lactamase in 1

8 China. The claim of the Chinese patent consists of only one claim, i.e., claim 1 and is read as: An antibiotic complex against β-lactamase, which characterized in that this complex is consisting of sulbactam and piperacillin or cefotaxime, sulbactam is mixed with piperacillin or cefotaxime at ratio of 0.5-2:0.5-2 to formulate a compound preparation. Double-Crane filed, based on the evidence 1, an invalidation request with the Patent Reexamination Board of SIPO against the Chinese patent in December, The evidence 1 is an article titled Sulbactam in combination with mezlocillin, piperacillin or cefotaxime: clinical and bacteriological findings in the treatment of serious bacterial infections as published in International Journal of Antimicrobial Agents 1996(6) with the Chinese translation thereof. The evidence 1 is obtained from a Chinese library with the library s seal and notarized by a notary public of China. The Patent Reexamination Board of SIPO made the Invalidation Decision No in August, 2003, announcing that, by reference to evidence 1, claim 1 of the Chinese patent is invalid for lack of inventive step. Xiangbei instituted legal proceedings against the decision at the People s No. 1 Intermediate Court of Beijing,and the court thereafter made a judgment upholding the Invalidation Decision No Again,dissatisfied with the judgment of the first instance, Xiangbei appealed it to the Beijing High Court. In April 2010, the Beijing High Court made the final judgment that revoked the invalidation decision made by the Patent Reexamination Board of SIPO and requested that the Patent Reexamination Board of SIPO reissue an invalidation decision for the patent. Double-Crane did not accept the final judgment of the Beijing High Court and filed a retrial request to the Supreme Court against the final judgment in September, The Supreme Court made a written order that accepted the retrial request in March,

9 Key points: In the retrial, the Supreme Court generalized the key issues of the case as follows: (1) relationship between combination of two drugs in clinic as disclosed by evidence 1 and a compound preparation containing the same two drugs; (2) In the examination of applications for patent for drug which has come up to the requirement as stipulated in Patent Law, consideration of conformability of the drug to the relevant provisions in the other laws or regulations on research and/or manufacture of drug; (3) In the patent examination and invalidation procedures, consideration of the technical solution and/or technical effect etc. which are not disclosed by the original description as the basis for evaluation of patentability. Reasoning: Regarding (1), a compound preparation containing the same two drugs is the specific manner of combination of two drugs in clinic as disclosed by evidence 1, and the two are closely related to one another. In case where the evidence 1 has disclosed the information about the combination of two drugs, the skilled in the art could obtain from it the technical teachings about a compound preparation containing the same two drugs. Regarding (2), for the invention for drug, once it has come up to the requirement of patentability as stipulated in Patent Law, it is not necessary to additionally consider to conform the drug to the relevant provisions in the other laws or regulations on research and/or manufacture of drug. Regarding (3), the technical solution and/or technical effect etc. which are not disclosed by the original description usually may not be considered as the basis for evaluation of patentability. Ruling: 1. Revoking the final judgment of the Beijing High Court 3

10 2. Upholding the judgment of the first instance and invalidation decision No made by the Patent Reexamination Board of SIPO The judgment is final. 4

11 Duo Leng Gang Group vs. Lian Jie Zhu Gang Factory, Patent Reexamination Board and Jin Xing Gang Wan Ltd. Case Number: (2010) Zhixingzi No. 6 Ruling date: 5 May 2011 Lian Jie Zhu Gang Factory ( Lian Jie ) in Jimei District of Xiamen City and Jin Xing Gang Wan Ltd. ( Jin Xing ) in Quanzhou City of Fujian Province filed, respectively, invalidation requests against the CN patent No. ZL of Duo Leng Gang Group in Fujian ( Duo Leng Gang ) to the Patent Reexamination Board ( PRB ). Having combined the two cases, the PRB held a hearing and made the Decision No which invalidated the patents. Duo Leng Gang was not satisfied with the decision and instituted a lawsuit to the Beijing No. 1 Intermediate Court. The Beijing No. 1 Intermediate Court made the Judgment of (2006) Yizhongxingchuzi No which revoked the Decision No and required that the PRB make a new decision. The plaintiff, the defendant and the third party were not satisfied with the judgment and appealed it to the Beijing High Court. The Beijing High Court made the Judgment of (2007) Gaoxingzhongzi No. 25 which rejected the appeal and upheld the original judgment. The PRB re-made the Decision No which affirmed the validity of the patent. Lian Jie was not satisfied with the decision and instituted legal proceedings at the Beijing No. 1 Intermediate Court. The Beijing No. 1 Intermediate Court made the Judgment of (2008) Yizhongxingchuzi No which revoked the Decision No Duo Leng Gang and the PRB were not satisfied with the judgment and appealed it to the Beijing High Court. The Beijing High Court made the Judgment of (2009) Gaoxingzhongzi No. 492 which rejected the appeal and upheld the original judgment. Duo Leng Gang petitioned for retrial with the Supreme Court. Having heard the case, the Supreme Court rejected the petition of Duo Leng Gang. The Supreme Court held in the judgment that the dispute of the case is focused on: whether or not the court s judgment numbered 492 involves violation of the procedural law, and whether or not there exists an issue of res judicata in respect of 5

12 the judgment 492 and the previous judgment 25. Facts: Lian Jie Zhu Gang Factory ( Lian Jie ) in Jimei District of Xiamen City and Jin Xing Gang Wan Ltd. ( Jin Xing ) in Quanzhou City of Fujian Province filed, respectively, invalidation requests against the CN patent No. ZL of Duo Leng Gang Group in Fujian ( Duo Leng Gang ) to the Patent Reexamination Board ( PRB ). Having combined the two cases, the PRB held a hearing and made the Decision No which invalidated the patents. Duo Leng Gang was not satisfied with the decision and instituted a lawsuit to the Beijing No. 1 Intermediate Court. The Beijing No. 1 Intermediate Court made the Judgment of (2006) Yizhongxingchuzi No which revoked the Decision No and required that the PRB make a new decision. The plaintiff, the defendant and the third party were not satisfied with the judgment and appealed it to the Beijing High Court. The Beijing High Court made the Judgment of (2007) Gaoxingzhongzi No. 25 which rejected the appeal and upheld the original judgment. The PRB remade the Decision No which affirmed the validity of the patent. Lian Jie was not satisfied with the decision and instituted legal proceedings at the Beijing No. 1 Intermediate Court. The Beijing No. 1 Intermediate Court made the Judgment of (2008) Yizhongxingchuzi No which revoked the Decision No Duo Leng Gang and the PRB were not satisfied with the judgment and appealed it to the Beijing High Court. The Beijing High Court made the Judgment of (2009) Gaoxingzhongzi No. 492 which rejected the appeal and upheld the original judgment. In the No. 492 Judgment, the Beijing High Court ex officio introduced the evidence No. 6, as the general common knowledge, into the combination of the evidences No. 1 and No. 3, when evaluating the inventive step of the 6

13 patent. The Beijing High Court ascertained in the No. 25 Judgment that the distinguishing features (2) and (3) of the patent were inventive over the evidence No. 1. The Beijing High Court ascertained in the No. 492 Judgment that the distinguishing feature (2) was disclosed by the evidence No. 1. It may be seen that the No. 492 Judgment is not consistent with the No. 25 Judgment with respect to the question of whether or not the evidence No. 1 has disclosed the distinguishing feature (2) of the patent. Key points: 1. Whether or not the No. 492 Judgment involves the procedural violation. 2. Whether or not the No.492 Judgment violated the principle of res judicata with respect to the No. 25 Judgment. Reasoning: 1. Since the general common knowledge is well known to a person skilled in the art, and the fact that the Beijing High Court in the court proceedings introduced ex officio the general common knowledge into the consideration of the validity of a patent on the basis of the combination of references determined by the invalidation petitioner has not changed the reasons for invalidation and is fair to both parties and helpful to avoid repeat of the invalidation procedures, the legal procedures therefore are not violated, and the court certainly should give the parties chances to express their opinions when ex officio introducing the general common knowledge. In this case, as Lian Jie held in the first and second instances that the content of the evidence No. 6 should be used, and Duo Leng Gang did not deny the truthfulness of the evidence No. 6, the Beijing High 7

14 Court did violate the legal procedure by introducing the evidence No. 6 to consider the validity of the patent. 2. The res judicata is aimed at maintaining the stability of a judgment. However, when following the principle of res judicata, the relationship between the current judgment and the previous judgment, the justice of substantial results and the efficiency of the procedures should also be considered. Although the No. 492 Judgment was not consistent with the previous No. 25 Judgment with respect to some issues, the ascertainment in the posterior No. 492 Judgment is proper because the determination on some issues by the the previous No. 25 Judgment is incorrect. Consequently, this case will not be retried on the ground of violation of the principle of res judicata. Ruling: The request for retrial by Duo Leng Gang is rejected. 8

15 Gree Electric Appliances Vs. Midea Electric Appliances Case No: (2011) HTZ No. 1 Ruling Date: Nov. 11, 2011 Gree Electric Appliances, Inc. of Zhuhai (hereinafter referred to as Gree ) filed before the Patent Reexamination Board of the State Intellectual Property Office (hereinafter referred to as the PRB ) a request for invalidation against the patent for design titled FAN (hereinafter referred to as the design patent) of Midea Electric Appliances, Inc. of Guangdong (hereinafter referred to as Midea ), alleging that the design patent is similar to a prior design disclosed before the filing date and shall be declared invalid according to Art. 23 of the Chinese Patent Law. The PRB issued the Invalidation Decision No (hereinafter referred to as the invalidation decision ) declaring the design patent invalid. The patent owner Midea was dissatisfied with the decision and lodged an administrative lawsuit before the Beijing 1st Intermediate People s Court, and the court made a judgment holding that the design patent is not similar to the prior design and deciding that the Invalidation decision be revoked. Gree and the PRB thereafter appealed the judgment to the Beijing High People s Court requesting to withdraw the first instance judgment and affirm the Invalidation decision. The Beijing High People s Court made the judgment of the second instance which rejects the appeal and affirms the judgment of the first instance. Dissatisfied with the judgment of the second instance, Gree applied before the Supreme People s Court for retrial of the case. The Supreme People s Court after retrial made a judgment revoking the administrative judgment of the Beijing High People s Court and of the Beijing 1st Intermediate People s Court and affirms the Decision No of the PRB. During the retrial before the Supreme People s Court, the Court generalizes the key issues in dispute as: how to determine ordinary consumers in judging design similarity; how to understand and grasp the principle of overall observation, comprehensive judgment in judging design similarity; the effects of variations of 9

16 the technical effect caused by the variations of the design elements upon the overall visual effect of a design. Facts: Midea is the patent owner of the design patent No X titled Fan. Gree filed a request for invalidation against the design patent on Feb. 20, 2009 before the PRB alleging that the design of the patent is similar to that of a prior patent for design No X (hereinafter referred to as the prior design ) and shall be declared invalid according to Art. 23 of the Chinese Patent Law. The PRB issued the Invalidation decision on June 16, 2009 and declared the design patent invalid. The design of the patent and the prior design are respectively shown as below (only three views are demonstrated respectively): Design patent Prior design Midea was dissatisfied with the Invalidation decision and lodged an administrative lawsuit before the Beijing 1st Intermediate People s Court. The Beijing 1st Intermediate People s Court concludes that: the product incorporating the design of the patent is a fan mounted inside the outdoor machine of an air conditioner such that consumers who purchases an air conditioner cannot see or can only see some portion of the fan through a screen of the outdoor machine of the air conditioner, and the design of the fan does not bring prominent influence on the overall appearance of the air conditioner. However, for the purchase and service personnel of air conditioner manufacturers, the fan is an important part in the manufacture and operation of an outdoor machine of air conditioners and thus they can easily see the design of the whole and parts of the fan. Thus, the ordinary consumers of the design patent should be the purchase and service personnel of 10

17 air conditioner manufacturers, who objectively know well such kind of products and designs thereof and possess knowledge and cognitive capabilities which are absent to the ordinary consumers who purchase an air conditioner. Since the differences between the design patent and the prior design are distributed on the parts, which are located in the visual portions such as the middle portion of the designs, for the aforementioned judging subjects, such differences are adequate to produce variations on the overall visual effects. Thereby, the design of the patent and the prior design are not similar designs. Accordingly, the Beijing 1st Intermediate People s Court made a judgment of the first instance revoking the Invalidation decision. Gree and the PRB were dissatisfied with the judgment of the first instance and respectively appealed it to the Beijing High People s Court. The Beijing High People s Court basically affirmed the comments of the first instance and thus made a judgment rejecting the appeal and affirming the judgment of the first instance. Gree was dissatisfied with the judgment of the second instance and applied before the Supreme People s Court for retrial. In applying for the retrial, Gree argued that: the product incorporating the design of the patent titled FAN does not define an exclusive use for air conditioners. The product incorporating the design of the patent is classified into class 23-04, and the products in that class further comprise circulating fan, ventilator blade, etc. besides air conditioner. Thus, the ordinary consumers of the product incorporating the design of the patent further comprise the fan purchasers of circulating fan and ventilator factories as well as ordinary consumers who purchase a circulating fan, a ventilator and an air conditioner. Key issues: In retrial, the key issues in dispute mainly comprise: (i) how to determine 11

18 ordinary consumers in judging design similarity; (ii) how to understand and grasp the principle of overall observation, comprehensive judgment in judging design similarity; (iii) the effects of variations of the technical effect caused by variations of the design elements upon the overall visual effect of a design. Reasoning: Regarding (i), The Supreme People s Court didn t specify the category for the ordinary consumers of the design of the patent, but pointed out that: the ordinary consumers are hypothetic judging subjects established in order to make a judgment conclusion more objective and accurate, and hold particular knowledge levels and cognitive capabilities. As for the particular knowledge levels, the ordinary consumers have common knowledge of products identical with or similar to a product incorporating the design patent, and are well acquainted with the designs of relevant products before the filing date, and are familiar with conventional designs in relevant products. For the cognitive capabilities, the ordinary consumers with normal attention and discriminating capabilities over variations of such design elements as shape, color and pattern would pay attention to the overall visual effects of designs rather than slight local differences between the designs of a patent and a reference. Regarding (ii), the Supreme People s Court holds that, the so-called overall observation, comprehensive judgment means that ordinary consumers shall judge whether a patented design and a reference design have prominent visual differences from the whole rather than local design variations; when judging, ordinary consumers pay attention to both identical and different aspects between visible parts of a patented design and a reference design and give a comprehensive consideration to the degree and extent of effects of the identical and different aspects upon the overall visual effects. 12

19 The Supreme People s Court concludes that: the patented design and the prior design both consist of a hub located at the centre and two blades that are centrally symmetrically distributed on both sides of the hub. The shapes of individual blades are substantially identical, and the symmetric distribution profiles of two blades are also substantially identical. The differences therebetween mainly lie in that: the blades rotate in a 180 opposite direction; the blades of the design patent project a small portion out of the hub body and are thicker than the blades of the prior design. As the two symmetrically distributed blades occupy a primary visual part of a product and are more easily noticed by the ordinary consumers, the substantially identical blade shapes and symmetric distribution profiles produce prominent influence on the overall visual effects. The rotation direction of blades is determined by the rotation function of a fan, and consequently the differences in the rotation direction do not produce prominent influence on the overall visual effects. As the ordinary consumers can hardly observe slight differences between the blade thickness thereof, the differences in the blade thickness do not produce influence on the overall visual effect. Although the blades of the design patent project a small portion out of the hub body, the projecting portion occupies a small percentage with respect to the whole blades, and moreover, in operation, the projecting portion which is located lateral to a mounting face of the fan can hardly be observed by the ordinary consumers, such difference does not produce prominent influence on the overall visual effects either. By comparing the hubs of the design patent and of the prior design, it is seen that they both are constituted by a cylindrical structure, they both have a pair of arc-shaped hub walls which extend in an involute manner at the junction of the hub and the blades and are both shaped by arcs in combination with straight lines, and their hubs and the blade insides are both obliquely connected by the hub walls from the lower portion to the upper in substantively the same manner. The differences therebetween mainly lie in that: the hub walls of the prior design 13

20 extend longer and enclose a greater area, and the arcs and straight line rims of the hub walls form a sharp angle which is absent from the patented design. For the design variations located at the center of a product, comprehensive consideration should be given to such factors as their proportions occupied in the whole product and the greatness of variation so as to determine their influence on the overall visual effects. The design variations located at the center do not necessarily produce prominent influence on the overall visual effects. Although the hub of the design patent is located at the center, it apparently occupies a very small area with respect to the blades, and its variations with respect to the hub of the prior design are relatively limited, and consequently, in the case where the hubs and hub walls of the design patent and the prior design possess the aforementioned several identical aspects, said differences do not produce prominent influence on the overall visual effect. As a matter of fact, the hub of the design patent is formed by abandoning a portion of the larger hub of the prior design, which makes the extension length and enclosed area of the hub walls reduced and the angle formed changed. When conducting similarity judgment, if the improvement of the design patent is only embodied in the omission of some local elements of the prior design, such improvement normally cannot reflect the innovation that should be possessed by the design patent, and thus can not bring prominent influence on the overall visual effects. By comparing the patented design and the prior design and giving a comprehensive consideration to the identical and different aspects therebetween as well as their influence on the overall visual effects, it can be determined that the overall visual effects of both designs do not have prominent differences and thus pertain to similar designs. Regarding (iii), the Supreme People s Court sets forth that: in order to acquire protection for patent right for a design, the design has to possess aesthetic feeling in the sense of the Patent Law, i.e. innovative improvements shall be made to 14

21 the visual effect of a product on the basis of effectuating a particular function thereof such that the product can embody an organic combination of functionality and aesthetic feeling; a product design that only has functionality but does not possess aesthetic feeling should not be protected by means of patent right for design; when undertaking similarity judgment, ordinary consumers mainly pay attention to variations in the visual effects of designs rather than variations in the function or technical effect; ordinary consumers will not, due to the variations of the technical effect brought up in company with variations of the design elements, apply a particular visual concern to variations in the design elements either. Finally the Supreme People s Court holds, by comparing the patented design and the prior design and giving a comprehensive consideration to the identical and different aspects therebetween as well as their influence on the overall visual effects, that the overall visual effects of both designs do not have prominent differences and thus the two designs pertain to similar designs. Ruling: Revoking the first and second instance judgments and affirming the Decision No of the PRB. 15

22 Patent infringement dispute case among the petitioner for retrial, Jiangxi Yintao Pharmaceutical Industry, the respondent, Shaanxi HW Pharmaceutical Co. Ltd., and the defendant in the first instance, Xi an Biosep Medicine Co. Ltd. Case No.: (2011) Min Shen Zi No.1490 Ruling Date: December 13, 2011 Dissatisfied with the civil judgment (Shan Min San Zhong No.00021,2011) made by the Shaanxi High People's Court in respect of the patent infringement dispute among Jiangxi Yintao Pharmaceutical Industry (hereinafter referred to as Yintao ), the respondent, Shaanxi HW Pharmaceutical Co. Ltd. (hereinafter referred to as Shaanxi HW ), and the defendant in the first instance, Xi an Bio-sep Medicine Co. Ltd. (hereinafter referred to as Xi an Bio-sep ), Yintao requested for retrial with the Supreme Peoples Court. After the court hearing, the Supreme People s Court deemed, according to the provisions of the Article 25 item 2 of Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases, whether or not prior user right is established mainly depends on whether or not the alleged infringer had exploited the patent or made technical or material preparations necessary to exploit the patent before the filling date of the patent application, and decided that the request for retrial as filed by Yintao complies with the relevant provisions of the Civil Procedure Law of the People s Republic of China, and remanded it to the Shaanxi High People's Court for retrial. Facts: Shaanxi HW is the patentee of the invention patent titled with Chinese medicine composition with functions of reducing blood-pressure, reducing-fat, anti-dizzy and calming wind, and preparing method and use thereof. The patent application was filed on September 27, 2005 and granted patent right on March 16

23 14, 2007, and the corresponding product is named as Qiangli Dingxuan Pian. The sale income of Shaanxi HW from January to December in 2011 is billion yuan, wherein the sale income for Qiangli Dingxuan Pian as a core product is billion yuan. Yintao filed an application for registration for Qiangli Dingxuan Jiaonang with provincial Food and Drug Administration Office on June 16, The application for registration concerning the production of Qiangli Dingxuan Jiaonang filed by Yintao was approved by the State Food and Drug Administration Office on March 3, Believing that the Qiangli Dingxuan Jiaonang product produced and sold by Yintao is identical in protection scope of the above-identified patent in terms of prescription, technology, dosage form and functions and infringes upon the patent right of the patentee, Shaanxi HW instituted legal proceedings in the Intermediate People's Court of Xi an, requesting Yintao to stop the infringing act and compensate the losses. During the trial of the first instance, the defendant, Yintao, filed a request for invalidation with the Patent Reexamination Board of SIPO. The Patent Reexamination Board accepted this case on May 17, 2010, and issued the examination decision on July 29, 2010, wherein the request for invalidation as filed by Yintao was rejected. Then, the Intermediate People's Court of Xi an made the first instance judgment determining that Yintao infringed upon the patent right of Shaanxi HW and ordered Yintao to compensate the economic losses. Yintao was not satisfied with the first instance judgment made by the Intermediate People's Court of Xi an, and appealed to the Shaanxi High People's Court. The Shaanxi High People's Court determined on September 15, 2011 that the assertion of Yintao failed to comply with the provisions on prior user right, rejected the appeal and upheld the first instance judgment. 17

24 Yintao was not satisfied with the second instance judgment made by Shaanxi High People's Court, and requested for retrial with the Supreme People s Court, wherein Yintao alleged that the second instance court erroneously ascertained the fact and Yintao should enjoy the prior user right according to provisions of relevant laws, and submitted the following exhibits: Exhibit 1: The notification of accepting application for registration on Qiangli Dingxuan Jiaonang issued by the Food and Drug Administration Office of Jiangxin province on June 16, 2005, and information on Item of Declaration Materials of Qiangli Dingxuan Jiaonang as submitted when Yintao filed the application for registration, wherein the prescription, preparing method and use of the Qiangli Dingxuan Jiaonang were recorded Exhibit 2: Detection Report Table of Drug Registration issued by Jiangxi Institute For Drug Control and attachments thereof, wherein three batches of Qiangli Dingxuan Jiaonang samples produced by Yintao on March 13, 15 and 17, 2005, respectively, were provided for registration detection; and Exhibit 3: Drug Manufacturing Certificate and GMP Certificate for Drug Key point: Whether or not the arguments on prior user right made by Yintao are established. Ruling: As to the arguments on prior user right made by Yintao, the Supreme People s Court made an analysis in details. It is prescribed in Article 25 item 2 of Interpretation of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases, in any one of the following circumstances, the People s Court shall determine that necessary preparations have already been 18

25 made for making or using the identical product as prescribed by Article 69 item 2 of the Patent Law: (1) the main technical blueprint or technological documents necessary to exploit the invention-creation have been completed; and (2) main equipment or raw materials necessary to exploit the invention-creation have been manufactured or purchased. Therefore, whether or not prior user right is established mainly depends on whether or not the alleged infringer had exploited the patent or made technical or material preparations necessary to exploit the patent before the filling date of the patent application. The exhibits filed by Yintao evidenced that Yintao had completed the technological documents and equipments for producing the Qiangli Dingxuan Jiaonang before September 27, 2005 when the involved patent was filed, which complies with the provisions that the necessary preparations for making or using had been made, and thus it should be deemed that Yintao had made necessary preparations for exploiting the involved patent before the filling date of the issued patent. As to the issue of when Yintao got the drug production license, it is only related to administrative examination and approval procedures in drug administration, and whether or not the drug production license is got shall not be the basis for judging whether or not necessary preparations for making or using had been made. Ruling: 1. The case is remanded to the Shaanxi High People's Court for retrial. 2. The execution of initial instance judgments is suspended during retrial proceedings. 19

26 JUNHAO vs. JIAYI Case No.: (2011) Min-Shen-Zi No Ruling Date: November 22, 2011 JIAYI Craft Furniture Factory of Zhongshan city in Guangdong (hereinafter referred to as JIAYI ) is the exclusive licensee of the Chinese Design Patent CN entitled Three-drawer Cabinet (Egg Shape) (hereinafter referred to as patent concerned ). Considering that a cabinet produced and sold by JUNHAO Furniture Ltd. of Zhongshan city in Guangdong (hereinafter referred to as JUNHAO ) infringes on the patent right of the patent concerned, JIAYI instituted legal proceedings against JUNHAO at the Zhongshan Intermediate People s Court in September The Zhongshan Intermediate Court made a judgment that the accused infringement product was not similar to the patent concerned, and JUNHAO did not infringe on the patent. Being unsatisfied with the judgment of first instance, JIAYI appealed to the Guangdong High People s Court. The Guangdong High Court held that the accused infringement product was similar to the patent concerned, so the judgment of first instance was revoked and JUNHAO was ordered to bear infringement liability. Being unsatisfied with the judgment of second instance, JUNHAO submitted a petition for retrial to the Supreme People s Court. The Supreme Court finally made a judgment in November 2011 rejecting JUNHAO s petition. In its judgment, the Supreme Court gave detailed explanation regarding the influence on the overall visual effect of the design exerted by the design features that make the patented design distinguished from the prior art design. Facts: The patented cabinet (pictures below) has a main body of generally column shape having an elliptic cross-section, with three drawers arranged from top to bottom, each drawer having rectangular front face with a round knob in the 20

27 center. The cabinet has a raised elliptic surrounding rim on the top surface and four T-shaped feet symmetrically disposed along the elliptic peripheral edge at the bottom. At both lateral sides of the cabinet, octagonal-shaped decorative frames are presented. On the front surface, top surface and lateral sides of the cabinet, decoration patterns of flower of lily are presented. The accused infringement product (picture below) is also an elliptic cabinet with three drawers. Compared with the patented design, the shape of the accused infringement product is substantially the same as that of the patented in the parts of the main body, the top portion and the bottom portion. The major difference between the two lies in the decoration patterns on the surface of cabinet, the accused infringement product does not present decoration pattern on the top surface and have decoration pattern of flower of peony on the front surface and the lateral sides. The court of first instance believed that, the pattern difference between the patented and the accused infringement product caused different overall visual effect between the two, so the two designs are not similar. While the court of second instance believed that, the most remarkable feature of the patented design is the combination and arrangement in the specific manner for the three square shape drawers and octagonal decorative frames with the egg shape 21

28 cylindrical cabinet body, such feature would have more influence on the overall visual effect, while the pattern difference between the accused infringement product and the patent concerned is only partial and slight difference, so the two designs are similar. In its retrial petition, JUNHAO argued that: the three elements of design shape, pattern and color all play the same important role, each element shall be equally protected. The patent concerned is the combination of shape and pattern, these two design elements have the same important effect on the protection scope of the patent. The court of first instance subjectively determines one element as the remarkable design feature and treats the pattern in larger proportion in the appearance as partial and slight difference, such standpoint violates the basic principles of the Patent Law. The pattern elements in the accused infringement product and the patent concerned occupy relative large proportion in the appearance of the product and the patterns of the two designs are obviously different, no confusion would be caused for the ordinary consumers, so the two designs are not similar. Key Points: The dispute focus on whether the design of the accused infringement product is similar to that of the patent. The key point lies in how to consider the influence on the overall visual effect of the design which is exerted by the design features that make the design patent concerned distinguished from the prior art designs. Reasoning: The Supreme Court observed, through retrial, that as seen from the title and the pictures of the patent concerned, the combination and arrangement of the three square shape drawers and the two lateral octagonal decorative frames with the egg shape cabinet body are the distinctive design features of the patent 22

29 concerned over the prior art designs, and therefore, compared with the other design features, the substantial identity between the designs of the accused infringement product and the patent in the overall shape of the cabinet and in the shape and arrangement of each component of the cabinet have more influence on the overall visual effect of the design. Although the decoration patterns are different, both patterns are flowers, the theme of the pattern is the same and the layout of the pattern is almost the same, thus the accused infringement product, by substituting the lily design of the patent concerned with the peony design, adopts in fact the design conception of the patent, and the difference brought by such simple substitution has only limited and slight influence on the overall visual effect, which is not substantial, so it would not have substantial impact on judging the similarity in overall visual effect between the designs of the accused infringement product and the patented. Ruling: The accused infringement product falls into the protection scope of the patent concerned. The JUNHAO petition is rejected. 23

30 Retrial over the jurisdiction dispute: Kaisai Materials Co. vs. Hanlin Biotech Co. and Microbe Research Bureau Case No.: 1049 (2011) Ruling date: September 13, 2011 Dissatisfied with the final decision rendered by Shandong High People s Court on the jurisdiction dispute relating to the infringement of patent for invention initiated by Shandong Hanlin Biotech Co., Ltd. ( Hanlin Biotech Co. ) and the Microbe Research Bureau of the Academy of Science of China( Microbe Research Bureau ) against Shandong Kaisai Biotech Materials Co., Ltd. ( Kaisai Materials Co. ), Shandong Kaisai Biotech Co., Ltd. ( Kaisai Biotech Co. ) and Shanghai Kaisai Biotech Research and Development Center, Kaisai Materials Co. filed an application for retrial with the Supreme People's Court. Through retrial, the Supreme People's Court holds the application for retrial did not meet the requirement of Article 179 of the Civil Procedure Law of the People's Republic of China and rejected the application filed by Kaisai Materials Co.. The Supreme People's Court also commented on whether the place of exportation shall be regarded as the place of distribution. Facts: Hanlin Biotech Co. and Microbe Research Bureau instituted legal proceedings with Qingdao Intermediate People's Court against Kaisai Materials Co. and Kaisai Biotech Co. for infringement upon the patent No. ZL of Microbe Research Bureau by exporting on FOB and CIF terms at Qingdao the products made by using patented methods. Dissatisfied with the decision of the first instance, Kaisai Materials Co. filed an appeal with Shandong High People s Court, and the court made the final decision on March 7, Dissatisfied with the final decision, Kaisai Materials Co. filed a request for retrial with the Supreme People's Court, asserting that the judgments on jurisdiction rendered by the courts of 1st and 2nd instances deciding that the place of exportation was the place of 24

31 distribution have improperly applied the laws, and requesting that the case be moved to Shanghai Second Intermediate People's Court which has accepted another patent infringement case. Key points: Whether exportation is distribution and weather the place of exportation is the place of distribution Reasoning: The Supreme People's Court held the opinions that under Article 5, Paragraph 2 of the Several Provisions of the Supreme People's Court on Issues Relating to Application of Law to Adjudication of Cases of Patent Disputes issued by the Supreme People's Court that 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., the port of Qingdao, in this case, where the accused products made by using the patented methods were delivered, shall be the place of distribution and Qingdao Intermediate People's Court shall have the jurisdiction over this case. Ruling: The application for retrial filed by Kaisai Materials Co. is rejected. 25

32 LUO SHIZHONG vs. LANYING Plastic Case No.: (2011) Mintizi No 248 Ruling Date: December 20, 2011 Mr. LUO Shizhong (hereinafter referred to Mr. LUO ) brought a case at Shenzhen Intermediate People s Court of Guangdong Province (herein after referred to as Intermediate Court ) against SHENZHEN LANYING PLASTIC CO., LTD (hereinafter referred to as LANYING ) claiming that LANYING infringed his Chinese Utility Model Patent No Lock of Steering Wheel of Automobile. The Intermediate Court held that the accused infringing product does not fall into the protection scope of the patent. Mr. LUO dissatisfied with the judgment of the intermediate Court and appealed to the High People s Court of Guangdong Province (herein after referred to as High Court ). The High Court held that the Intermediate Court s judgment had incorrectly ascertained the facts and incorrectly applied the law. Therefore, the High Court, for the aforesaid reasons, revoked the decision of the Intermediate Court. LANYING dissatisfied with the judgment of the High Court and appealed to the Supreme People s Court of PRC (hereinafter referred to as Supreme Court ). Having heard the case, the Supreme Court dismissed the appeal and upheld the judgment of the High Court. In the judgment, the Supreme Court has made a detailed explanation on how to interpret the term of the claims, which is not specially defined in the description. The Supreme Court held that if a term of claim is not specially defined in the description, it should be interpreted with the term s usual meaning as understood by the person skilled in the art, and its meaning may not be simply confined to the content as embodied by one embodiment in the description. Facts: The patent in dispute is a patent for utility model, entitled Lock of Steering Wheel of Automobile, and the application for patent was filed by LUO Shizhong on April 23, 26

33 2002 and was granted on April 30, 2003 with patent number ZL The Intermediate Court held that there are three differences between the accused infringing product and the disputed patent: (1) Inner structure of the lock body. According to the patent, a longitudinal hole arranged on either side of the vertical large hole pass through the central of vertical large hole. However, in the accused infringing product, the longitudinal holes do not pass through the central of vertical large hole, but offset each other up and down and are not arranged in a horizontal level. (2) Structure of pivot. According to the disputed patent, a radial recess is arranged in the middle of lower end of pivot. The position of recess is corresponding to that of a locking element and a resilience latch. However, the lower end of pivot in the disputed product is divided into an upper part and a lower part, in which two kinds of groove are arranged. (3) Fitting relationship between the resilience latch, the locking element and pivot. According to the disputed patent, the resilience latch, the locking element and the radial recess of pivot are located in horizontal level. However, in the accused infringing product, the resilience latch is corresponding to upper groove of pivot, and the locking element is corresponding to lower groove of pivot. Thus, the accused infringing product does not fall into the protection scope of the patent. Based on above findings, the Intermediate Court dismissed Mr. LUO s complaint. Mr. LUO was dissatisfied with the judgment and filed an appeal to the High Court. As for the above differences, the High Court held that (1) the feature a longitudinal hole arranged on either side of the vertical large hole pass through the central of vertical large hole in the disputed patent should be considered as the longitudinal holes are connected to the central of the vertical large hole. Thus, even though the longitudinal holes on both sides of the vertical large hole are offset each other up and down, the inner structure of lock body of the accused infringing product is same as the disputed patent. (2) Claim 1 of the disputed patent does not define shape, number of the radial recess. Moreover, the groove of the accused infringing product is substantially a recess depressed in radial 27

34 direction of pivot, since it s also used to fit to a locking element and resilience latch. Thus, this feature of the accused infringing product is also same as the disputed patent. (3) The structure and connection of combined beam, lock body and stop rod in the accused infringing product are same as the disputed patent. Moreover, the locking element and the resilience latch of the accused product have the same function of corresponding parts of the disputed patent. Thus, the accused infringing product has the same fitting relationship between the resilience latch, the locking element and pivot as the disputed patent. Based on the above reasons, the High Court held the accused infringing product fall into the protection scope of the patent, and dismissed the judgment of the trial court. LANYING was dissatisfied with the judgment of the High Court, and filed a request for retrial with the Supreme Court. During the retrial, the Supreme Court generalized the points of disputes as follows: (1) inner structure of the lock body; and (2) structure and fitting relationship of the pivot. As for inner structure of the lock body, the corresponding feature of the disputed patent is a longitudinal hole arranged on either side of the vertical large hole pass through the central of vertical large hole. Wherein the Chinese wording GUANCHUAN is neither a technical term nor specially defined in the description. In this case, the wording should be interpreted according to its usual meaning. The Dictionary of Modern Chinese records: GUAN means pass through, be linked in a continuous line; be connected, and thereby the Chinese wording GUANCHUAN means pass through, be connected. Thus, the literal meaning of the above feature is the longitudinal holes arranged respectively on both side are connected each other and pass through the central of the vertical large hole. The vertical large hole is three dimensional. The central of the vertical large hole denotes axis central line instead of the central of the axis central line. 28