With the improvement of China's intellectual property protection legal system, more and more Chinese companies have also made a leap from pursuing the number of patent applications and authorizations to using patents to protect their rights. On the other hand, in China, as a huge global manufacturing and consumer market, technology introduction, joint ventures, and OEM production between Chinese companies and European, American, Japanese, and Korean companies are becoming more active, and the related intellectual property disputes are also increasing. Reflected in patent infringement litigation, even in 2020 when the COVID-19 epidemic is raging, the second instance of invention and utility model patent infringement litigation cases accepted by the Intellectual Property Court of the Supreme People's Court reached 1,189[1], which is still an increase 72.8% from 2019.

    In a patent infringement dispute, as the party accused of infringement, there are many ways and options to deal with it. You can pay a certain license fee to the patentee as the plaintiff to settle the dispute; you can make a non-infringement defense to argue that your product does not fall into the scope of the plaintiff's patent protection; or you can use existing technology as a reason for defense. However, the payment of the license fee may be expensive; the defense of non-infringement may be more difficult because the plaintiff is well prepared; and if you want to use an existing technology to defend, you may not be so lucky and just find the evidence involved prior to the patent application, and the existing technology is the same as the own product. Therefore, the invalidation against the plaintiff’s involved patent has become the most effective way to completely resolve patent infringement disputes.

    1. By invalidating the involved patents, the patent infringement disputes in the first and second instances lawsuit can be completely resolved

    In an invention patent infringement dispute that the author once represented, the plaintiff, an European machinery manufacturing company, sued a large-scale Chinese railway maintenance equipment company for patent infringement who produced and sold accused equipment protected by the European company’s invention patent, and the plaintiff went to the location of defendant and acted Evidence preservation. Upon accepting the defendant’s entrustment, Our attorney team initiated patent invalidation procedure immediately, requesting the Patent Reexamination Board of China National Intellectual Property Administration(hereinafter referred to as “CNIPA”) to declare the European company's patent invalid. We searched a large number of patent and non-patent literature materials all over the world, and prepared hundreds of pages of prior art evidence that could affect the novelty and non-obviousness of the patent in question, and submitted it to CNIPA. After CNIPA heard the case publicly, the European company was concerned that its patents involved might be invalidated due to lack of non-obviousness and requested a settlement with the defendant urgently. Finally, the lawsuit of patent infringing was withdrawn by the plaintiff and the patent invalidation case was also settled [2].

    Even if patent infringement is convicted of infringement by the people’s court and defendant is liable for compensation after the first instance, as long as the patent in question is successfully invalidated during the second instance, the defendant can also completely get rid of the infringement dispute. The most typical example is the case of Beijing Watchdata Company v. Hengbao Company regarding its electronic key invention patent infringement. In the first instance, Hengbao Company was convicted of patent infringement and Beijing Watchdata was awarded RMB 50 million compensation including reasonable attorney fee. However, the plaintiff, Beijing Watchdata Company, received none compensation ultimately. The reason was that the patent claims was declared invalid by CNIPA during the second instance of the patent infringement case, the people's court made a ruling to reject the plaintiff's lawsuit in the second instance [3].

    2. The purpose of patent invalidation is not necessarily to invalidate the other party's patent

    In a patent infringement dispute case, the defendant’s purpose of initiating a patent invalidation procedure does not necessarily invalidate the claims of the target patent. In some cases, it only needs to use the patent invalidation procedure to force the patentee to make reduced protection of its patent rights, interpretation of the protection scope, thereby using the estoppels principle to win the patent infringement lawsuits.

    In the utility model patent infringement case of Shenzhen Chuangge Company and Ma Xiguang v. Compaq Company, Compaq Company used the patent invalidation procedure cleverly to force the patentee made a statement that the feature "replaceable" in claim 1 is interpreted as "interchangeable" in order to maintain the validity of its patent right before CNIPA, that is, the component "seat" in the technical solution is interchangeable. Therefore, the patent right is maintained valid [4]. In the infringement lawsuits heard by the people’s court, Compaq claimed that its own "slots" were not interchangeable, and cleverly used the patentee's interpretation in the patent invalidation procedure, thus successfully won the patent infringement lawsuit using the estoppels principle.

    3. How to find prior art evidence that can invalidate the target patent through multiple channels

    As mentioned above, in cases of patent infringement disputes, the full use of patent invalidation procedures, especially in the case of invalidating all the claims of the other party’s patent, can play an important role cutting the ground on which the plaintiff stands, thus can completely resolve infringement disputes. The key to the success of patent invalidation lies in the ability to retrieve strong evidence that affects the novelty and non-obviousness of the patent in question. In most cases, the petitioner for patent invalidation usually uses patent database to find evidence of existing technology. In practice, you can also find scientific and technological papers published on Internet platforms, new technologies and products released on e-commerce platforms, and look for evidence of prior art in books and journals.

    Another way you need to pay attention is to dig out evidence of invalidation of the patent from the patentee. The patent invalidation decision No. 43581 issued by CNIPA on March 4, 2020 involved such a case [5], Daimler AG sued a car company for design patent infringement based on its Smart car design patent. However, as the defendant in the patent infringement lawsuit, the car company found that Daimler had released its similar Smart concept car shape on Tencent Auto.com and Bitauto.com before the design patent application date. Therefore, the design patent was declared invalid by CNIPA due to lack of novelty compared to the prior designs. And the patent infringement lawsuit of Daimler was rejected by the people’s court [6].

    4. The use of patent invalidation procedures in infringement litigation also needs to pay attention to the timing

    According to Article 9 of the Supreme People’s Court’s "Several Provisions on Applicable Legal Issues in the Trial of Patent Dispute Cases", in cases of infringement of utility model and design patent rights accepted by the people’s court, if the defendant requests the invalidation of the patent right during the defense period, The people's court should suspend the litigation. Therefore, when encountering the above-mentioned circumstances, defendant should promptly file a patent invalidation request to CNIPA within the 15-day defense period in the infringement lawsuit in order to suspend the trial of the infringement lawsuit. At the same time, use the one-month supplementary evidence period stipulated by Chinese patent laws and regulations, and then search to find strong existing technical evidence, in order to invalidate the patent involved and resolve infringement disputes fundamentally.

    Of course, in the increasingly fierce market competition, companies can also take precautions before infringement disputes occur, by searching whether there are valid patents that pose legal risks to the products they manufacture and sell, and do a good job of early warning of patent infringement risks, and make arrangements in advance. Preparations for patent invalidation, design around, etc.

    References:

    [1] 　Annual Report of the Intellectual Property Court of the Supreme People's Court (2019)/(2020)

    [2] 　Civil Ruling (2016) Yun 01 Min Chu No. 941

    [3] 　Civil Ruling (2017) Jingmin Final No. 399

    [4]　The Patent Reexamination Board of CNIPA "Invalidation Request Examination Decision" No. 2133

    [5]   "The story behind the invalidity and infringement cases for Smart car design patent revealed", "IPRdaily" Chinese website, 2020-03-22

    [6]　Civil Ruling (2019) Yu 01 Zhi Min Chu No.907