An International Guide to
Patent Case Management for Judges

4.2 Overview on patent-related civil cases

4.2.1 Causes of action

The cause of action in a civil case is determined by the nature of the civil legal relationship in dispute between parties of the case. It constitutes an important element in the name of each civil case and an important means for people’s courts to manage civil cases. According to the Provisions on the Causes of Action in Civil Cases⁵⁷ and Article 1 of the Provisions on the Trial of Patent Disputes, the causes of action in patent-related civil cases include:

• disputes over the ownership of patent application rights;
• disputes over patent ownership;
• disputes over patent contracts;
• patent infringement disputes;
• disputes over patent counterfeiting;
• disputes over royalties of invention patents during the temporary protection period;
• disputes over rewards and remuneration for inventors or designers of service invention-creations;
• disputes over an application for pre-litigation act preservation;
• disputes over an application for pre-litigation property preservation;
• disputes over liabilities for damages due to an application for act preservation;
• disputes over liabilities for damages due to an application for property preservation;
• disputes over the right of authorship of inventors or designers of invention-creations;
• disputes over a declaration of patent non-infringement;
• disputes over the refund of royalties after a declaration of patent invalidation;
• disputes over liabilities for damages due to malicious patent litigation;
• disputes over royalties of standard-essential patents;
• disputes over whether a technical solution falls within the protection scope of a pharmaceutical product patent; and
• other patent disputes.

4.2.2 Jurisdiction

Jurisdiction of civil cases is determined by such provisions in Chapter II of the Civil Procedure Law and in Part 1 of the Interpretation of the Civil Procedure Law.

4.2.2.1 Jurisdiction by court level and territorial jurisdiction

Jurisdiction by court level refers to the practice of defining the acceptance of first-instance civil cases by courts of different hierarchical levels according to certain criteria. According to Articles 17–20 of the Civil Procedure Law, primary people’s courts have jurisdiction as courts of first instance over all civil cases unless otherwise stipulated. Intermediate people’s courts have jurisdiction as courts of first instance over major cases involving foreign elements, cases with significant impact in the areas over which they exercise jurisdiction and cases determined by the Supreme People’s Court. High people’s courts have jurisdiction as courts of first instance over civil cases with significant impact in the areas over which they exercise jurisdiction. The Supreme People’s Court has jurisdiction as the court of first instance over cases with significant impact in the whole country and cases that should be tried by the Supreme People’s Court according to its own opinion.

Regarding the jurisdiction of patent-related civil cases by court level, Article 2 paragraph 1 of the Interpretation of the Civil Procedure Law stipulates the following: “Patent dispute cases shall come under the jurisdiction of intellectual property courts or intermediate people’s courts and primary people’s courts determined by the Supreme People’s Court.”

Territorial jurisdiction refers to the division of the jurisdiction of people’s courts at the same level to hear cases of first instance based on the scope of jurisdiction of those courts and the places of domicile of the parties. Territorial jurisdiction determines which people’s court has jurisdiction after jurisdiction by court level has been determined. Jurisdiction by court level defines the respective jurisdiction of superior and inferior people’s courts within the people’s court system over civil cases of first instance, while territorial jurisdiction defines the scope of jurisdiction of people’s courts at the same level to hear civil cases of first instance. In other words, jurisdiction by court level determines the vertical division of scope for case trials, whereas territorial jurisdiction determines the horizontal division of scope. Territorial jurisdiction needs to be determined based on the characteristics of different civil cases.

According to Article 35 of the Civil Procedure Law, when two or more people’s courts each have jurisdiction over a lawsuit, the plaintiff may file a lawsuit in any one of those courts. If the plaintiff files the lawsuit in two or more people’s courts with jurisdiction thereof, the people’s court that first registers the case shall have jurisdiction.

4.2.2.2 Jurisdiction transfer and designation of jurisdiction

According to Article 36 of the Civil Procedure Law, if a people’s court finds that a case it has accepted is not under its jurisdiction, it shall transfer the case to the people’s court with jurisdiction, which shall accept the case. If the people’s court to which the case is transferred considers that the case does not come under its jurisdiction in accordance with laws and regulations, it shall report to a superior people’s court for designation of jurisdiction but shall not further transfer the case at its own discretion. The transfer of jurisdiction is, in essence, a procedure to correct mistakes in the registration of cases and includes transfer to another court at the same level and to a superior or inferior court arising from mistakes in territorial jurisdiction and jurisdiction by court level.

According to Article 37 of the Civil Procedure Law, if a people’s court with jurisdiction over a case is unable to exercise jurisdiction due to special reasons, the superior people’s court shall designate jurisdiction. A dispute over jurisdiction between people’s courts shall be resolved by the disputing courts through consultation. If the consultation fails, the dispute shall be submitted to the people’s court that is their common superior people’s court for the designation of jurisdiction. In the transfer of jurisdiction, if the court to which a case is transferred considers that the case is not under its jurisdiction, it shall report to the superior people’s court for the designation of jurisdiction.

4.2.2.3 Objection and submission to jurisdiction

If a party objects to the jurisdiction over a case after it is accepted by a people’s court, the party may raise an objection during the time limit for filing the statement of defense. The people’s court shall examine such an objection. If the objection is upheld, the people’s court shall rule to transfer the case to another people’s court with jurisdiction over the case; if the objection is not upheld, it shall be dismissed. If the party disagrees with the ruling on the objection to jurisdiction, it has the right to appeal to a superior people’s court within the statutory time limit.

Where a party does not raise any objection to the jurisdiction over the case and responds to the action with a defense, the party shall be deemed to have agreed that the people’s court accepting the case has jurisdiction over the case unless that court is in violation of the provisions regarding jurisdiction by court level and exclusive jurisdiction.

4.2.3 Special provisions on jurisdiction

4.2.3.1 Jurisdiction over patent-related civil cases by court level

According to Article 20 paragraph 1 of the Interpretation of the Civil Procedure Law, patent dispute cases come under the jurisdiction of intellectual property courts or intermediate people’s courts and of primary people’s courts determined by the Supreme People’s Court.

In provinces, municipalities directly under the central government, and autonomous regions that have established intellectual property courts or intellectual property tribunals, patent-related civil cases of first instance come under the centralized jurisdiction of the relevant intellectual property courts or tribunals. In other provinces, municipalities and autonomous regions, patent-related civil cases of first instance come under the jurisdiction of the intermediate people’s courts that originally held the jurisdiction.

On October 26, 2018, the Sixth Session of the 13^th NPC Standing Committee deliberated and adopted the Decision on the Litigation of Intellectual Property Cases, which came into effect on January 1, 2019. This decision states that the Supreme People’s Court shall uniformly hear civil and administrative appeal cases involving patents and other intellectual property rights involving professional technologies.

The Provisions on the Intellectual Property Court also came into effect on January 1, 2019. Article 1 of this judicial interpretation stipulates that the Supreme People’s Court shall establish the Intellectual Property Court to hear cases on appeal over patent and other intellectual property rights involving professional technologies. Article 2 of the provisions stipulates the category of cases to be heard by the Intellectual Property Court of the Supreme People’s Court:

1. 1. appeal cases filed because the interested parties disagree with the judgments and rulings made by high people’s courts, intellectual property courts or intermediate people’s courts on first-instance civil cases involving any invention patents, utility models, new plant varieties, layout designs of integrated circuits, technical secrets, computer software or monopoly;
2. 2. appeal cases filed because the interested parties disagree with the judgments and rulings made by the Beijing Intellectual Property Court on first-instance administrative cases involving the granting and confirmation of any invention patents, utility models, design patents, new plant varieties or layout designs of integrated circuits;
3. 3. appeal cases filed because the interested parties disagree with the judgments and rulings made by high people’s courts, intellectual property courts or intermediate people’s courts on first-instance administrative cases involving any invention patents, utility models, design patents, new plant varieties, layout designs of integrated circuits, technical secrets, computer software or administrative penalty for monopoly;
4. 4. nationwide significant and complex civil and administrative cases of first instance identified in Items 1, 2 or 3;
5. 5. petitions for retrial, protests, retrials and so on in accordance with the law where adjudication supervision procedures are applicable with respect to legally effective judgments, rulings or written mediation statements of first-instance cases identified in Items 1, 2 or 3;
6. 6. cases of objection to jurisdiction, petitions for reconsideration of penalty or detention decisions, or petitions for extension of a trial term with regard to first-instance cases identified in Items 1, 2 or 3; and
7. 7. other cases that, in the opinion of the Supreme People’s Court, should be heard by the Intellectual Property Court.

If a party disagrees with the second-instance judgment or ruling made by the Intellectual Property Court of the Supreme People’s Court on a patent-related civil case, it may file a petition for retrial with the Supreme People’s Court in accordance with the laws.

With respect to civil cases involving design patents, according to Article 164 of the Civil Procedure Law, if a party disagrees with a first-instance judgment or ruling made by a local people’s court, the party has the right to file an appeal with a superior people’s court. A party that considers a second-instance judgment or ruling to be wrong may file a petition for retrial in accordance with Article 199 of the Civil Procedure Law.

4.2.3.2 Territorial jurisdiction over some types of patent-related civil cases

4.2.3.2.1 Disputes over patent contracts

The territorial jurisdiction over civil cases of patent contract disputes is determined according to Articles 23 and 34 of the Civil Procedure Law. Such cases may come under the jurisdiction of the people’s court at the place where the defendant is domiciled or where the contract is performed; or the parties may agree in writing to be subject to the jurisdiction of the people’s court at the place having a connection with the dispute, such as where the defendant is domiciled, where the contract is performed, where the contract is signed, where the plaintiff is domiciled, where the subject matter is located and so on, provided that such an agreement does not violate the provisions of the Civil Procedure Law regarding jurisdiction by court level and exclusive jurisdiction.

4.2.3.2.2 Disputes over patent ownership and over patent infringement

For disputes over ownership of patent application rights and patent rights, territorial jurisdiction is determined after identifying whether the cause of the ownership disputes is a contractual relationship or acts of infringement.

The territorial jurisdiction of lawsuits filed due to acts of patent infringement is determined according to Articles 2–3 of the Provisions on the Trial of Patent Disputes:

Article 2. These lawsuits shall come under the jurisdiction of the people’s court at the place where the acts of infringement are committed or where the defendant is domiciled.

The place where the acts of infringement are committed include: the place where acts of manufacturing, using, offering for sale, selling or importing the products alleged to have infringed the invention patent and/or utility model are performed; the place where the act of using the patented process is performed, and the place where the acts of manufacturing, using, offering for sale, selling or importing of the products directly obtained by the patented process are performed; the place where the acts of manufacturing, using, offering for sale, selling or importing the products incorporating the design patents are performed; the place where the act of counterfeiting others’ patents is performed; and the place where the result of the said acts of patent infringement occurred.

Article 3. If the plaintiff only sues the manufacturer of the alleged infringing product but does not sue the seller thereof, and the infringing product is manufactured and sold in different places, then the people’s court at the place where the infringing product is manufactured may have jurisdiction; if the plaintiff files a lawsuit with the manufacturer and the seller as co-defendants, the people’s court at the place where the infringing product is sold may have jurisdiction.

If the seller is a branch or subsidiary of the manufacturer, and the plaintiff files a lawsuit against the manufacturer for its acts of manufacturing and selling the infringing product, the people’s court at the place where the infringing product is sold may have jurisdiction.

4.2.3.2.3 Disputes over whether the technical solution falls within the protection scope of pharmaceutical product patent rights

In accordance with Article 1 of the Provisions on the Patent Rights of Drugs, the party concerned may file a lawsuit in accordance with Article 76 of the Patent Law requesting a judgment on whether the technical solution related to the pharmaceutical product for which registration is applied falls within the protection scope of any pharmaceutical product patent right owned by others. This type of lawsuit comes under the jurisdiction of the Beijing Intellectual Property Court.