An International Guide to
Patent Case Management for Judges

4.3 Civil cases of patent infringement

4.3.1 Protection scope of invention patents and utility models

The protection scope of patent rights defines the boundaries of the patent rights. Article 64 paragraph 1 of the Patent Law stipulates the following: “For the patent right of an invention or utility model, the scope of protection shall be confined to the contents of its claims. The description and the drawings attached can be used to explain the content of the claims.” According to this provision, the protection scope of an invention patent or utility model is determined based on the content of its claims. Where parties have a dispute over the content of the claims, claims are interpreted to determine the protection scope of patent rights. People’s courts must adhere to the adjudication idea of “strengthening protection and balancing interests” and interpret claims in a reasonable manner in accordance with laws, thereby ensuring that the protection scope of patent rights is compatible with the degree of novelty and inventive contribution.

4.3.1.1 Basis for determination

Article 20 paragraph 1 of the Rules for the Implementation of the Patent Law stipulates that claims must contain independent claims and may also contain dependent claims. Claims usually contain several claims, each claim being a complete technical solution. The right holder may choose any claim as the basis of the protection scope of patent rights asserted thereby.

In accordance with Article 1 of the Interpretation of Patent Infringement Dispute Cases, the right holder may choose one or more specific claims before the end of oral arguments in the court of first instance. Where the claims contain several claims, the right holder must specify in its complaint the claims based on which the lawsuit has been filed against the alleged patent infringement. Where such claims are not specified or not clearly specified in the complaint, then the people’s court will require the right holder to specify the claims in accordance with Article 1 of the Interpretation (II) of Patent Infringement Dispute Cases. Where the right holder refuses to do so as required by the people’s court, the latter may rule to dismiss the lawsuit.

4.3.1.2 Fundamental doctrines and judgment subject for determination

In interpreting claims, people’s courts must adhere to the doctrine of compromise to strengthen the role of public notice of claims and increase certainty in the determination of the protection scope of patent rights, thereby providing clear legal anticipation for the public and facilitating the improvement of patent document drafting skills. People’s courts must also adhere to the principle of “balancing interests” to protect the legitimate rights and interests of the right holder and encourage inventions and creations while avoiding the improper expansion of patent rights, which may reduce the potential for further innovation and damage public interests and others’ lawful rights and interests. Regarding the doctrine of compromise, Article 2 of the Interpretation of Patent Infringement Dispute Cases stipulates the following: “People’s courts shall determine the contents of claims as defined in Article 59(1) of the Patent Law based on the words of the claims and the understanding of the claims by a person skilled in the art, after reading the description and drawings.”

The doctrine of equivalents is a principle for determining patent infringement. Equivalent technical features are also incorporated in the protection scope of patent rights. Article 13 paragraph 1 of the Provisions on the Trial of Patent Disputes stipulates the following: “the protection scope of a patent right shall be confined to the scope determined by all technical features contained in the claims and shall also include the scope determined by features equivalent to those technical features.”

In a retrial of a dispute over invention patent infringement, Ningbo Dongfang Movement Plant v. Jiangyin Jinling Hardware Products Co.,⁵⁸ the Supreme People’s Court held the following:

In determining the protection scope of patent rights, people’s courts shall neither confine the protection scope of patent rights to the strict literal meaning of the claims nor use the claims as the technical guidance for arbitrary expression. The protection scope of patent rights shall be determined based on the substantial content of the claims. Where the claims do not provide a clear description, the description and drawings may be used for clarification. The protection scope of patent rights may be extended to also cover equivalent features that a person skilled in the art can think of after reading the description and drawings without creative work.

In determining the protection scope of patent rights, “a person skilled in the art” shall be the judgment subject. “A person skilled in the art” are persons of legal fiction, and refer to technical personnel with average knowledge in the technical field related to the concerned patent. They are neither technical experts nor personnel who have no technical knowledge in the field. The protection scope of patent rights shall be confined to the scope of the understanding of the claims by a person skilled in the art after reading the description and drawings.

4.3.1.3 Specific methods for determination

Article 3 of the Interpretation of Patent Infringement Dispute Cases points out the specific methods for the interpretation of claims. It stipulates the following:

People’s courts may interpret a claim using the description and drawings, relevant claim(s) in the claims, and the patent examination files. Specially defined expressions for the claims as contained in the description, if any, shall be adhered to.

In case of failure to clarify the meaning of the claims even after application of the abovementioned methods, an interpretation may be made in combination with published documents like reference books and textbooks, as well as the common understanding of the meaning by a person skilled in the art.

The application of this provision involves the following aspects:

• The description, drawings and related claims in the claim, as components of patent-granting documents that are the most closely related to the claims, are usually the best guideline for clarifying expressions in disputes.
• The patent examination files, although not a component of patent-granting documents, are available for public access. Since the expressions of claims have the same meaning in the patent examination procedure and in infringement lawsuits, patent examination files can play an important role in the interpretation of the claims.
• In contrast to the foregoing “internal evidence,” reference books and textbooks are “external evidence,” used only when the internal evidence is insufficient to provide a clear interpretation. The interpretation of claims does not necessarily require the application of these methods individually or jointly. Where the use of the description and drawings is sufficient to clarify the meaning of the claims, there is no need to resort to other means.

Generally, the expressions of the claims are understood as having the meaning that they usually have in the relevant technical field. If, under certain circumstances, the description defines a specific meaning for an expression due to which the protection scope of the claims is sufficiently defined, then that specific definition is taken as the meaning of that expression. At the same time, in interpreting the claims, “the limitations in the description shall not be read into the claims.” For example, illustrative explanations, like embodiments in the description, cannot be used to limit the protection scope of patent rights.

In a retrial of a dispute over invention patent infringement, Wuxi Shenglong Cable Materials Plant v. Xi’an Qinbang Telecommunication Materials Co.,⁵⁹ the Supreme People’s Court held that, when a person skilled in the art can clearly determine the meaning of relevant expressions in the claims, and the description does not give specific definitions for relevant expressions in the claims, then the understanding of a person skilled in the art on the contents of the claims prevails, while the contents of the description cannot be used to negate the contents of the claims.

In a retrial of a dispute over invention patent infringement, Xu Yongwei v. Ningbo Huatuo Solar Energy Technology Co.,⁶⁰ the Supreme People’s Court held that, when using a description and drawings to interpret the claims, an illustrative description therein cannot be used to limit the protection scope of the patent right because embodiments are only illustrations of the invention.

In a retrial of a dispute over utility model patent infringement, Shenzhen Lanying Hardware and Plastic Products Plant v. Luo Shizhong,⁶¹ the Supreme People’s Court held that, when a description does not give specific definitions for expressions in the claims, the interpretation can generally be made based on the usual meaning as understood by a person skilled in the art rather than by narrowing the meaning of the expressions to the content reflected by a specific mode of carrying out the utility model described in the description.

With respect to technical terms created by patent applicants, in a retrial of a dispute over utility model patent infringement, Shanghai Modiluke Locks Manufacturing Plant v. Shanghai Gujian Locks Co.,⁶² the Supreme People’s Court held that patent applicants are allowed to use technical terms created in drafting patent application documents to meet the objective need for describing the new technical solutions of patents. However, as the meanings of such technical terms are not known to a person skilled in the art, applicants are obliged to give clear and correct definitions, explanations or descriptions for such technical terms in the claims or the description where they are used. When such explanations or definitions are absent, then the working method, function and effect of the technical terms should be identified by reference to the background art, the purpose of the invention, technical effects and so on as recited in the claims, description and drawings so that the meanings of such technical terms in the overall technical solution can be determined.

With respect to examination files, Article 6 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

People’s courts may use another patent related to the involved patent due to a divisional application as well as the patent examination files of that other patent and effective judgments/rulings on patent granting and confirmation, to interpret the claims of the involved patent.

Patent examination files shall include written materials submitted by patent applicants or patentees during the patent examination, reexamination, and invalidation procedures, as well as the notices on examination opinions, meeting minutes, oral hearing records, effective decisions on patent reexamination requests or requests for declaration of patent invalidity, etc., issued by the patent administration department under the State Council.

4.3.1.4 Interpretation of functional features

Article 4 of the Interpretation of Patent Infringement Dispute Cases stipulates the following:

For technical features in the claims that are expressed in terms of functions or effects, people’s courts shall determine the contents of such technical features in combination with the mode of carrying out the functions or effects and its equivalent mode(s), as depicted in the description and drawings.

As a type of technical feature with a relatively special nature, functional features define the protection scope of patent rights through the functions or effects to be achieved by relevant technical features rather than through the specific technical means to achieve those functions or effects. As a result, the literal meaning of “functional features” is so extensive that it covers all modes of carrying out the invention that can achieve those functions or effects regardless of whether the modes already exist before the filing date of the patent or are discovered or invented after the filing date, whether the right holders are aware of them on the filing date or whether they are disclosed in the description.

In Part II(2) of the Guidelines for Patent Examination,⁶³ although it is permitted to use functional or effect-based features to define an invention in the claims, many restriction provisions are also made for this type of technical feature, requiring that “the use thereof shall be avoided as far as possible” (Part II(2) Article 26.4 of the Guidelines for Patent Examination). In a patent infringement lawsuit, if still following the general rules of interpreting claims to interpret the protection scope of “functional features” as covering all modes of carrying out the invention that can achieve those functions or effects, the protection scope of the patent right will not be compatible with the innovation degree and the information disclosed in the patent, inevitably unnecessarily limiting subsequent improvement and innovation and negatively affecting technological development and social and economic advances. Therefore, Article 4 of the Interpretation of Patent Infringement Dispute Cases offers a special provision regarding the interpretation of “functional features” such that the protection scope of patent rights can be compatible with the innovation degree of patents and the contents disclosed in the description and drawings, thereby balancing the interests of the public and the patent holders and leaving necessary space for subsequent improvement and innovation. According to current practices in patent examination, in rare instances, modes of carrying out the inventions are not described in the description and drawings; therefore, the expression “in combination with” is used in Article 4.

Determining whether a disputed technical feature is a “functional feature” has an important effect on the protection scope of a patent right. In this respect, Article 8 of the Interpretation (II) of Patent Infringement Dispute Cases further stipulates the following:

A functional feature refers to a technical feature in which the structures, components, steps, conditions, or the relations among them are defined by their functions or the effects achieved in the invention-creation, unless a mode of carrying out the invention for achieving the above functions or effects can be directly and specifically determined by a person skilled in the art by reading the claims alone.

According to this provision, in determining whether a disputed technical feature is a “functional feature,” it is necessary to not only consider the literal meaning of the expression of the technical feature but also incorporate the technical feature into the overall technical solution defined by the claims, for understanding. For a technical feature containing a specific function or effect, if a person skilled in the art can directly and specifically determine the mode for achieving that function or effect by reading the claims alone, then the technical feature is not a “functional feature” as stipulated in Article 4 of the Interpretation of Patent Infringement Dispute Cases. It should be noted the technical features stated in the above proviso are determined based on the knowledge and capability of a person skilled in the art, and relevant evidence should be produced by the concerned parties.

In an appeal of a dispute over invention patent infringement, Valeo Cleaning System Co. v. Xiamen Lukasi Automotive Parts Co.,⁶⁴ the Supreme People’s Court further specified that, if a technical feature in the claims of a patent has defined or implied specific structures, components, steps, conditions or the relations among them, then it is not a functional feature, even if it defines the functions or effects that can be achieved thereby simultaneously.

In a retrial case over utility model patent infringement, Linhai Linong Machinery Plant v. Lu Jie,⁶⁵ the Supreme People’s Court held that, if, apart from defining functions or effects, a technical feature also defines the structural feature corresponding to those functions or effects, and a person skilled in the art can directly and specifically determine the mode for achieving such a structural feature by reading the claims alone, and such a mode can achieve those functions or effects, then this technical feature, which simultaneously defines the structure and the functions or effects, is not a functional feature.

4.3.1.5 Use-environment features

Article 9 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following: “Where an alleged infringing technical solution cannot be applied for the use environment defined by the use environment features in the claims, the people’s courts shall determine that the alleged infringing technical solution does not fall within the protection scope of the patent right.”

In a retrial of a dispute over invention patent infringement, Shimano Inc. v. Ningbo Richeng Industry and Trade Co.,⁶⁶ the Supreme People’s Court held that the use-environment features recited in the claims are necessary technical features that can help define the protection scope of claims; however, to what degree use-environment features can define the protection scope of claims needs to be determined on a case-by-case basis. The general understanding is that the subject matter to be protected can be – rather than must be – used in such a use environment, unless a person skilled in the art can specifically and reasonably conclude that the subject matter protected must be used in such a use environment after reading the claims, description and the patent examination files.

4.3.1.6 Closed composition claims

Article 7 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

Where an alleged infringing technical solution has additional technical features based on all technical features contained in the closed composition claims, the people’s courts shall determine that the alleged infringing technical solution does not fall within the protection scope of the patent right, unless the additional technical features are unavoidable impurities that are present in normal amounts.

The closed composition claims stated in the preceding paragraph generally do not include claims of traditional Chinese medicine composition.

Although the Guidelines for Patent Examination have been amended several times, the provisions are consistent with respect to the typical limitations for open claims and closed claims and in the interpretation rules thereof. For example, the 2006 Guidelines for Patent Examination⁶⁷ stipulates, in the general rules for claims, the following:

Usually, open claims should use expressions like “comprising,” “including,” or “consisting essentially of,” which are interpreted as possibly containing additional structural elements or method steps not recited in the claims. Closed claims should use the expression “consisting of,” which is usually interpreted as excluding additional structural elements or method steps not recited in the claims.

Despite subsequent amendments, the Guidelines for Patent Examination have maintained the same provisions on closed composition claims (i.e., that they must not contain additional components other than the features recited in the claims, except for unavoidable impurities that are present in normal amounts).

Through long-term practice in patent examination and adjudication, the foregoing drafting manner and interpretation rule have become widely accepted by the industry. The interpretation rule stipulated in Article 7 paragraph 1 of the Interpretation (II) of Patent Infringement Dispute Cases is consistent with that in the Guidelines for Patent Examination. When applying for patents, patentees may make reasonable choices between open claims, closed claims and closed active component claims to obtain appropriate protection coverage.

The exclusion of other components is one of the inherent features of closed claims. If an alleged infringing technical solution contains additional components, it can be deemed as not “covering” all technical features and thus not falling within the protection scope of the patent right. If, for any reason, the patentee has chosen closed claims with a relatively small protection scope in a patent-granting procedure and due to which the protection scope of the claims of the granted patent is not as broad as expected, then the patentee, having failed to assert a broader protection scope despite having had the opportunity to do so, bears the corresponding legal consequences for the same. In other words, in a patent infringement lawsuit, the patentee’s assertion that its closed claims do not exclude other undefined components shall not be supported.

In a retrial of a dispute over invention patent infringement, Shanxi Zhendong Taisheng Pharmaceutical Co. v. Hu Xiaoquan,⁶⁸ the Supreme People’s Court held that closed claims should usually be interpreted as excluding structural elements or method steps not recited in the claims. Closed composition claims should usually be interpreted to mean that the composition contains the listed components, excluding all other components except for impurities present in normal amounts (excipients are not impurities). By choosing closed claims, patentees have indicated that they specifically intend to exclude other undefined structural elements or method steps from the protection scope of the patent rights and, therefore, cannot subsequently recapture them into the protection scope through applying the doctrine of equivalents.

In a retrial of a dispute over invention patent infringement, Hebei Xinyu Welding Co. v. Yichang Houwang Welding Co.,⁶⁹ the Supreme People’s Court held that closed claims constitute a special type of claim that uses specific words or expressions to confine the protection scope to cover only the technical features specifically recited in the claims and the equivalents thereof, but excludes other components, structures or steps. Therefore, with respect to closed claims, if an alleged infringing product contains additional features apart from the technical features specifically recited in the claims, it shall be determined as not falling within the protection scope of the claims.

4.3.1.7 Handling of errors or defects in claims

According to Articles 45–46 of the Patent Law, from the date of the announcement of the grant of a patent right by the patent administration department of the State Council, any entity or individual may request the patent administration department to declare the patent right invalid. The patent administration department will then examine the request for declaring invalidation of a patent right and make a decision on it. If the parties concerned refuse to accept the decision, they may file an administrative lawsuit in the people’s court. Therefore, in a civil case involving patent infringement, people’s courts cannot directly examine the validity of the patent and declare it invalid. However, with respect to ambiguities and manifest errors in claims, people’s courts can make corresponding determinations in accordance with the laws.

With respect to manifest errors in claims and description, Article 4 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

Where the grammar, characters, punctuations, figures, symbols, etc. in the claims, the description, and drawings are ambiguous, but a person skilled in the art may derive a sole understanding by reading the claims, the description and drawings, the people’s courts shall make a determination according to such a sole understanding.

According to this provision, despite ambiguities in the claims and other patent documents, if a person skilled in the art can derive a sole understanding, the people’s courts shall correct the errors based on such an understanding. While emphasizing the basic orientation of the public notice of claims, it is necessary to keep some flexibility in interpreting the claims to avoid mechanistic submission to literal meanings so that patents with true technological contributions can be adequately protected.

In a retrial of a dispute over invention patent infringement, Wuxi Shenglong Cable Materials Plant v. Xi’an Qinbang Telecommunication Materials Co.,⁷⁰ the Supreme People’s Court held that, when manifest errors exist in specific expressions in the claims, if a person skilled in the art can specifically and directly correct the meaning of the specific expressions therein without any doubt by reference to relevant contents in the description and drawings, then these expressions are to be interpreted as having the corrected meaning.

In a retrial of a dispute over utility model patent invalidation, Hong Liang v. Patent Reexamination Board,⁷¹ the Supreme People’s Court held that “manifest errors” refers to errors in technical features that a person skilled in the art can identify immediately after reading the claims, based on their common technical knowledge, and the sole correct understanding of which such a person may be able to determine immediately after reading the relevant contents of the description and drawings, taking into account their common technical knowledge. The existence of manifest errors does not render the boundary of claims ambiguous. Where manifest errors exist in the claims, if a person skilled in the art can determine the sole correct understanding thereof based on the relevant contents of the description and drawings, then the technical solution protected by the claims is determined based on the corrected understanding.

4.3.2 Determination of infringement of invention patents and utility models

With respect to the protection scope of patent rights, Article 64 of the Patent Law stipulates the following: “The protection scope of an invention or utility model patent shall be determined by the contents of its claims, and the description and drawings can be used to interpret the content of the claims.” This provision is clarified by Article 13 paragraph 1 of the Provisions on the Trial of Patent Disputes, which states that “the protection scope of a patent right shall be confined to the scope determined by all technical features recited in the claims, and shall also include the scope determined by features equivalent to those technical features.”

According to these provisions, patent infringement includes two circumstances: first, that the alleged infringing technical solution falls within the protection scope of the patent right defined by “all technical features recited in the claims,” which is a literal infringement; and second, that the alleged infringing technical solution falls within the “scope determined by equivalent features,” which is an infringement under the doctrine of equivalents.

In a retrial of a dispute over utility model patent infringement, Bai Wanqing v. Chengdu Nanxun Commodity Sales Service Center,⁷² the Supreme People’s Court held that the protection scope of patent rights must be clear. When manifest defects exist in the expressions of the claims of a utility model patent, if the protection scope of the patent right is obviously unclear because the specific meaning of technical terms in the claims cannot be determined by reference to the description and drawings of the involved patent, well-known general knowledge in the art, relevant prior art and so on, then it would be impossible to compare this with the alleged infringing technical solution. As a result, the alleged infringing technical solution cannot be identified as constituting an infringement.

4.3.2.1 Literal infringement

Article 13 paragraph 1 of the Provisions on the Trial of Patent Disputes stipulates the following: “The protection scope of a patent right shall be confined to the scope determined by all technical features recited in the claims.” Article 7 of the Interpretation of Patent Infringement Dispute Cases further stipulates the following:

In determining whether an alleged infringing technical solution falls within the protection scope of the patent right, the people’s courts shall examine all technical features recited in the claims asserted by the right holder.

If an alleged infringing technical solution contains technical features identical or equivalent to all technical features recited in the claims, the people’s courts shall determine that such a technical solution falls within the protection scope of the patent right; if the alleged infringing technical solution lacks one or more technical features recited in the claims, or has one or more technical features that are neither identical nor equivalent, the people’s courts shall determine that the alleged infringing technical solution does not fall within the protection scope of the patent right.

According to these provisions, the “all elements rule” applies in determining the infringement of invention patents and utility models. An alleged infringing technical solution will be determined as constituting a literal infringement only when it contains all of the technical features recited in the claims. Where the alleged infringing technical solution does not contain one or more technical features recited in the claims, it does not constitute infringement. Incorporation of additional technical features into the alleged infringing technical solution, if any, does not, in principle, affect the determination of infringement, provided that, in the case of closed claims, the additional technical features of the alleged infringing technical solution are considered.

In a retrial of a dispute over utility model patent infringement, Zhang Jianhua v. Shenyang Zhilian Highrise Building Heating Technology Co.,⁷³ the Supreme People’s Court held that, if the alleged infringing technical solution lacks a technical feature recited in the claims, which leads to the deterioration of technical effects, it shall be determined as not falling within the protection scope of the patent right.

With respect to dependent claims, Article 1 paragraph 2 of the Interpretation of Patent Infringement Dispute Cases specifically stipulates the following:

Where a right holder asserts that the protection scope of the patent right shall be determined based on dependent claims, the people’s courts shall determine the protection scope thereof based on both the additional technical features recited in such dependent claims and the technical features of the claims being referred.

Article 5 of the Interpretation (II) of Patent Infringement Dispute Cases further stipulates the following: “all technical features, whether recited in the preamble portion and characterizing portion of independent claims or recited in the reference portion and defining portion of dependent claims, have a defining role.” Therefore, the protection scope of dependent claims is defined by technical features of two aspects: the additional technical features that are recited in the dependent claims, and all technical features in the claims being referred to in the dependent claims. If a claim being referred to is still a dependent claim, then it is necessary to further trace it until the independent claim that is referred to in the end is identified.

With respect to the defining role of the title of the subject matter in claims, in a retrial of a dispute over invention patent infringement, Xinghe Industry Co. v. Jiangsu Runde Pipes Industry Co.,⁷⁴ the Supreme People’s Court held that the title of the subject matter recited in claims should be considered, and its actual defining role in the protection scope of the patent right depends on what impact it has on the subject matter to be protected by the claims.

4.3.2.2 Infringement under the doctrine of equivalents

With respect to infringement under the doctrine of equivalents, Article 13 paragraph 2 of the Provisions on the Trial of Patent Disputes stipulates the following:

Equivalent features are features that adopt basically the same means to perform basically the same functions and achieve basically the same effects as the technical features recited in a claim and a person skilled in the art can think of without creative work when the alleged act of infringement occurs.

The doctrine of equivalents is an important approach for overcoming the limitations of claims in expressions and for realizing the fair protection of patent rights. The doctrine of equivalents is used to compensate for the insufficiency of literal infringement. At the same time, the overly broad and excessive application of this doctrine is prevented through appropriately strict limitations, thereby avoiding the improper expansion of the protection scope of patent rights based on the doctrine, which may limit innovation and damage public interests. Limitations to the doctrine of equivalents are primarily reflected in two aspects. First, the doctrine is applied to the technical features in the claims but not to the technical solution as a whole, and the determination criteria are relatively strict and as objective as possible. Second, the estoppel rule and dedication rule are used to limit the application of the doctrine of equivalents. A determination of infringement under the doctrine of equivalents is made based on the circumstances at the time the alleged act of infringement occurred.

Applying the doctrine of equivalents expands the protection scope literally defined by the claims and adds uncertainty to the determination of the protection scope, which may affect the reasonable expectation of the public on the protection scope of patent rights. Therefore, the determination of infringement under the doctrine of equivalents must adhere to the principle of prudent application in accordance with the laws. In terms of the determination criteria, two conditions must be met simultaneously to permit a finding of equivalent features. First, these features must adopt basically the same means to perform basically the same functions and achieve basically the same effects as the technical features recited in the claims. Second, a person skilled in the art is able to think of these features without creative work (i.e., they are obvious to a person skilled in the art). Article 12 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates that, when expressions like “at least,” “not more than,” and so on are recited in the claims to define numeric features, and a person skilled in the art concludes that the patented technical solution has specifically emphasized the limiting role of such expressions in technical features after reading the claims, the description and drawings, then a right holder’s argument that numeric features different therefrom constitute equivalent features shall be rejected by people’s courts.

In a retrial of a dispute over invention patent infringement, Ningbo Dongfang Movement Plant v. Jiangyin Jinling Hardware Products Co.,⁷⁵ the Supreme People’s Court held the following:

The patented technical solutions should be ascertained and the space for public to freely make use of technologies to achieve invention-creations should be available, therefore reasonable protection for patentees should be determined along with sufficient legal certainty for the public. In accordance with this principle, the protection scope of an invention patent or utility model includes the scope defined by necessary technical features specifically recited in the claims, and the features equivalent to those being recited.

In a retrial of a dispute over utility model patent infringement, Beijing Jerrat Damping Elastomer Technical Research Center v. Beijing Jinzi Tianhe Buffer Technology Co.,⁷⁶ the Supreme People’s Court held that, if an alleged infringing technical solution using technical means is opposite to technical features specifically recited in the claims, producing opposite technical effects, and the purpose of the invention is unachieved, then infringement under the doctrine of equivalents is not found.

In a retrial of a dispute over utility model patent infringement, Sun Junyi v. Renqiu Bocheng Water Heating Apparatus Co.,⁷⁷ the Supreme People’s Court held that, when applying the doctrine of equivalents, the level of technological development at the filing date and at the time of the alleged acts of infringement should be considered so as to prevent technical features in the patented technical solution from simply being replaced by new technologies occurring after the filing date for the purpose of avoiding infringement and so to determine the reasonable boundaries of the protection scope of patent rights.

4.3.2.3 Judgment on infringement of functional features

With respect to judgments on infringement related to functional features, Article 8 paragraph 2 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

Where comparing with the technical features that are indispensable to achieve the functions or the effects mentioned in the preceding paragraph as recited in the description and drawings, the corresponding technical features of the alleged infringing technical solution adopt basically the same means to perform the same functions and achieve the same effects, and can be thought of by a person skilled in the art without creative work upon the occurrence of the alleged act of infringement, the people’s courts shall then determine that the said corresponding technical features are identical or equivalent to the functional features.

In this provision, “the said corresponding technical features [determined to be] identical or equivalent to the functional features” are different from the “equivalent features” stipulated in Article 13 paragraph 2 of the Provisions on the Trial of Patent Disputes. First, the bases of comparison are different: the former involves the technical features recited in the description and drawings that are indispensable for achieving the functions or the effects, while the latter involves the features recited in the claims. Second, the criteria are different: the former requires the functions and effects to be the same, while the latter requires the functions and effects to be basically the same.

In a retrial of a dispute over utility model patent infringement, Linhai Linong Machinery Plant v. Lu Jie,⁷⁸ the Supreme People’s Court held that the identification of equivalent features (in a case of infringement under the doctrine of equivalents) is not the same as the identification of “the corresponding technical features [determined to be] equivalent to the functional features” according to Article 8 paragraph 2 of the Interpretation (II) of Patent Infringement Dispute Cases. Although both require “basically the same means” and “can be thought of without creative work,” they have essential differences in two main aspects. First, they have different objects of application and different bases of comparison. “Equivalent features,” as stipulated in Article 13 of the Provisions on the Trial of Patent Disputes, applies to a broader range of objects, involving technical features other than “functional features,” and the bases of comparison are the technical features recited in the claims. By contrast, Article 8 paragraph 2 of the Interpretation (II) of Patent Infringement Dispute Cases applies to the “functional features” stipulated, and the bases of comparison are the “technical features” recited in the description and drawings “that are indispensable” for achieving the functions or effects of the functional features. Second, the identification criteria are different. The “equivalent features” stipulated in Article 13 of the Provisions on the Trial of Patent Disputes are identified against the criteria of “performing basically the same functions” and “achieving basically the same effects,” while “the corresponding technical features [determined to be] equivalent to the functional features” according to Article 8 paragraph 2 of the Interpretation (II) of Patent Infringement Dispute Cases has stricter identification criteria because these features must “perform the same functions and achieve the same effects.”

4.3.2.4 Estoppel

The estoppel rule, as a necessary limitation to the doctrine of equivalents, aims to oblige parties to act in good faith during litigation activities and avoid interpreting claims in infringement litigation in ways different from those in related administrative patent-granting and confirmation procedures. The estoppel rule thus ensures that the protection scope of patent rights is determined in a reasonable manner and that the interests among patentees, alleged infringers and the public are balanced. Article 6 of the Interpretation of Patent Infringement Dispute Cases stipulates the following: “Where the patent applicant or the patentee surrenders a technical solution by observation or amendments to the claims and description during the patent-granting or invalidation procedure, the right holder’s argument to regain the surrendered technical solution in a patent infringement lawsuit shall not be upheld by people’s courts.” Therefore, patent examination files are not only the basis for claim interpretation but also involve the application of the estoppel rule in determining infringement.

With respect to the understanding of “surrendered technical solution,” Article 13 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

Where the right holder has proved that the narrowing amendments to the claims, description, and drawings or observation made by the patent applicant or the patentee are specifically denied in patent granting and confirmation procedures, the people’s courts shall determine that no technical solution is surrendered by such amendments or observation.

In this provision, the phrase “specifically denied” includes being denied by the CNIPA during the patent examination procedure and being denied by a people’s court in administrative litigation. According to this provision, a right holder bears the burden of proving that the narrowing amendments have been “specifically denied”; otherwise, the surrender of a technical solution results in the application of the estoppel rule.

In a retrial of a dispute over utility model patent infringement, Shen Qiheng v. Shanghai Shengmao Traffic Engineering Co.,⁷⁹ the Supreme People’s Court held the following:

In determining whether there is an infringement under the doctrine of equivalents, even though the alleged infringer does not assert the application of the estoppel rule, the people’s courts may apply the estoppel rule to impose necessary limitation to the scope of equivalents based on facts that have been found, to determine the protection scope of the patent right in a reasonable manner.

In a retrial of a dispute over utility model patent infringement, Zhongyu Electronics (Shanghai) Co. v. Shanghai Jiuying Electronic Technology Co.,⁸⁰ the Supreme People’s Court held that, if an independent claim is declared invalid whereas the dependent claims remain valid, and the patentee does not surrender the claim, then the estoppel rule shall not be applied to those dependent claims and the application of the doctrine of equivalents shall not be limited.

In a retrial of a dispute over invention patent infringement, Cao Guilan v. Chongqing Lifan Automobile Sales Co.,⁸¹ the Supreme People’s Court held that, in judging whether observations made by right holders are “specifically denied,” the people’s courts shall consider whether the narrowing statements with respect to the technical solution made by right holders are finally accepted by the decision-makers and whether, in that case, the patent was granted or was declared valid.

4.3.2.5 Issues related to process patent infringement

4.3.2.5.1 Determination of sequence of steps in process claims

Process patents are mainly defined by steps, a sequence of steps, process parameters and conditions and so on. With respect to the sequence of steps of a process patent, Article 11 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

Where specific sequence of technical steps is not explicitly recited in process claims but can be directly and specifically concluded by a person skilled in the art after reading the claims, description, and drawings, then the people’s courts shall determine that such a sequence of steps has a defining role with respect to the protection scope of the patent right.

In a retrial of a dispute over invention patent infringement, OBE – Werk Ohnmacht and Baumgartner GmbH v. Zhejiang Kanghua Glasses Co.,⁸² the Supreme People’s Court held that, for a process invention with sequences of steps, both the steps and their sequences have a defining role in the protection scope of the patent right. The sequences of steps in the claims should not be ignored on the ground that the sequences are not recited in the claims. Instead, whether the steps are performed in a particular sequence should be determined from the perspective of a person skilled in the art by reference to the description and drawings, examination files, the overall technical solution recited in the claims and the logical relations between the steps.

In a retrial of a dispute over invention patent infringement, Zhejiang Lexueer Household Supplies Co. v. Chen Shundi,⁸³ the Supreme People’s Court held that, in determining whether the sequence of steps of a process patent has a defining role in the protection scope of the patent right, which can limit the application of the doctrine of equivalents in the case of interchangeable step exits, the key is to consider whether those steps must be performed in a particular sequence and whether the interchangeable steps can bring about substantial differences in technical functions or technical effects.

4.3.2.5.2 Product-by-process claims

All features recited in the claims have a defining role in determining the protection scope of patent rights. According to Article 10 of the Interpretation (II) of Patent Infringement Dispute Cases, with respect to a technical feature in the claims in which a product is defined by its manufacturing method and where the manufacturing method of the alleged infringing product is neither identical nor equivalent to that method recited in the claim, then the people’s court shall determine that the alleged infringing technical solution does not fall within the protection scope of the patent right. Thus, for a product claim containing a technical feature in the form of a manufacturing method, it is necessary to consider whether the alleged infringing product has a technical feature identical or equivalent to that manufacturing method.

4.3.2.5.3 Protection scope of process patents and infringement judgment

According to Article 11 of the Patent Law, acts of infringement with respect to process patent include “using the patented process” and “using, offering to sell, selling, and importing products obtained directly from the patented process.”

The understanding of “products obtained directly from the patented process” has a direct impact on the protection scope of a process patent. In this respect, Article 13 of the Interpretation of Patent Infringement Dispute Cases further stipulates the following:

Where a product is originally obtained from a patented process, the people’s courts shall determine it as “the product directly obtained from the patented process,” as stipulated in Article 11 of the Patent Law. Where a subsequent product is obtained from further processing or treatment of the original product, the people’s courts shall also determine such processing or treatment as “using products obtained directly from the patented process,” as stipulated in Article 11 of the Patent Law.

Article 20 of the Interpretation (II) of Patent Infringement Dispute Cases further stipulates the following:

Where a subsequent product, obtained from processing or treatment of a product that is directly obtained from the patented process, is further processed or treated, the people’s courts shall determine that the act does not constitute “using products obtained directly from the patented process,” as stipulated in Article 11 of the Patent Law.

In an appeal of a dispute over invention patent infringement, Shenzhen Dunjun Technology Co. v. Shenzhen Jixiang Tengda Technology Co.,⁸⁴ the Supreme People’s Court held that, if an alleged infringer solidifies the substantial contents of a patented process in the alleged infringing product for production and operation purposes, and this act or the result thereof plays an irreplaceable and substantial role in covering all technical features of the patent claims so that end users can naturally reproduce the patented process during normal use of the alleged infringing product, then the alleged infringer shall be determined as having exploited the patented process and thus as having infringed the right of the patentee.

4.3.2.5.4 Burden of proof in product-manufacturing process invention patent infringement cases

With respect to a patent for the invention of a manufacturing process for a new product, Article 66 paragraph 1 of the Patent Law stipulates, regarding the burden of proof, the following:

Where a patent infringement dispute involves a patent for an invention for a manufacturing process of a new product, the entity or individual manufacturing the identical product shall provide evidence to prove that the manufacturing process used in the manufacture of its or his product is different from the patented process.

This provision corresponds to Article 34 of the TRIPS Agreement.

Determination of whether an alleged infringing product constitutes a “new product” directly affects on which party the burden of proof rests. Article 17 of the Interpretation of Patent Infringement Dispute Cases stipulates the following: “Where a product or the technical solution for manufacturing the product is known to the public in China or abroad before the filing date, the people’s courts shall determine that the product is not a new product as stipulated in Article 61 of the Patent Law.” This provision is co-opted from the novelty provisions of the Patent Law, according to which, if either a product or the technical solution for manufacturing the product is known to the public in China or abroad before the filing date, then the product does not constitute a new product.

In a retrial of a dispute over invention patent infringement, Yiwu Beige Plastic Products Co. v. Air-Paq Composite Material (Shanghai) Co.,⁸⁵ the Supreme People’s Court held that, if the right holder provides preliminary evidence to prove that a product manufactured from the patented process is a new product, then the preliminary evidence should be able to show that the involved product is significantly different to the same type of products existing before the filing date in terms of components and structure, or quality, performance and function.

In a retrial of a dispute over invention patent infringement, CSPC Ouyi Pharmaceutical Co. v. Zhang Xitian,⁸⁶ and in an appeal of a dispute over invention patent infringement, Eli Lilly Co. v. Hansoh Pharma,⁸⁷ the Supreme People’s Court held that, for a new product-manufacturing process invention patent, prerequisites should be met to place the burden of proof on the alleged infringer to prove that the process for manufacturing the alleged infringing product is different from the patented process, and the right holder should be able to prove that the product manufactured from the patented process is a new product and is identical to the product manufactured by the alleged infringer. It was further pointed out in CSPC Ouyi Pharmaceutical that, to determine whether a process patent is a patent for the invention of a manufacturing process for a new product, the “product obtained directly from the patented process” – which refers to a product originally obtained from the patented process rather than a product subsequently obtained by further treatment of the product originally obtained – shall be considered.

If a product manufactured from a patented process is not a “new product,” Article 66 paragraph 1 of the Patent Law does not directly apply to place the burden of proof on the alleged infringer to prove that their process for manufacturing the alleged infringing product is different from the patented process. However, when the evidence produced by the patentee meets particular requirements, the corresponding burden of proof may be placed on the alleged infringer. In this respect, Article 3 of the Provisions on Evidence in Civil Procedures involving Intellectual Property Rights stipulates the following:

the plaintiff of a patent infringement dispute case shall produce evidence to prove the following facts:

1. (1) the product manufactured by the defendant is identical to the product manufactured from the patented process;
2. (2) the probability of manufacturing the alleged infringing product from the patented process is relatively high; and
3. (3) the plaintiff has made reasonable efforts to prove that the defendant has used the patented process.

After the plaintiff has produced evidence to prove the above, the people’s courts may require the defendant to produce evidence to prove that the process for manufacturing its product is different from the patented process.

In a retrial of a dispute over invention patent infringement, Weifang Henglian Pulp and Papermaking Co. v. Yibin Changyi Pulp Co.,⁸⁸ the Supreme People’s Court held that, where a patentee can prove that the alleged infringer has manufactured an identical product but cannot prove that the alleged infringer has used the patented process after reasonable efforts, and if it is highly probable that the identical product is manufactured from the patented process based on the specific circumstances of the case, known facts and daily life experience, and the alleged infringer refuses to cooperate in the collection or preservation of evidence by the people’s courts, then it can be presumed that the alleged infringer has used the patented process.

4.3.2.5.5 Filed process and actual manufacturing process of alleged infringing pharmaceutical products

In an appeal of a dispute over invention patent infringement, Eli Lilly Co. v. Changzhou Watson Pharmaceuticals Co.,⁸⁹ the Supreme People’s Court held that, in a pharmaceutical product manufacturing process patent infringement dispute, in the absence of any evidence to the contrary, the manufacturing process of the alleged infringing pharmaceutical product filed to the medical product regulatory department will be presumed to be the actual manufacturing process thereof. If there is evidence to prove that the filed process of the alleged infringing pharmaceutical product is unauthentic, then the technological source, manufacturing procedures, batch manufacturing records, documents filed to the medical product regulatory department and so on of the alleged infringing pharmaceutical product shall be fully examined to determine the actual manufacturing process thereof according to law. With respect to complicated technical facts like the manufacturing process of the alleged infringing pharmaceutical product, technical investigators, expert assistants, judicial appraisal and technological expert consultancy may be comprehensively employed.

4.3.2.6 Dedication rule

Article 5 of the Interpretation of Patent Infringement Dispute Cases stipulates the following: “For a technical solution that is solely described in the description or drawings but is not recited in the claims, the right holder’s assertion to capture it in the protection scope of the patent right in a patent infringement dispute case shall not be supported by the people’s courts.” A technical solution that is recited in the description but not in the claims will be deemed as having been donated to the public by the patentee and thus cannot be recaptured into the protection scope defined by equivalent features in a patent infringement lawsuit. The dedication rule is, in essence, a limitation to the application of the doctrine of equivalents.

4.3.2.7 Impact of declaration of patent invalidity

In a civil case involving patent infringement, if the involved patent is declared invalid by the CNIPA, the effect of the administrative invalidation decision should be decided according to the enforcement or performance status of related civil judgments or written mediation documents regarding the patent infringement. Article 47 of the Patent Law stipulates the following:

Any patent right that has been declared invalid is deemed to be non-existent from the beginning.

The decision on declaring the patent right invalid shall have no retroactive effect on any judgment or mediation statement on patent infringement which has been made and enforced by the people’s court, on any decision concerning the handling of a dispute over patent infringement which has been performed or compulsorily executed, or on any patent exploitation licensing contract or patent right transfer contract which has been performed–prior to the declaration of the invalidation of the patent right; however, the damage caused to other persons in bad faith by the patentee shall be compensated.

Where the monetary damage for patent infringement, the royalties for patent exploitation or the fees for the transfer of the patent right is not refunded pursuant to the provisions of the preceding paragraph, but such non-refund is obviously contrary to the principle of fairness, refund shall be made fully or partly.

“The decision on declaring the patent right invalid” described in Article 47 includes two circumstances: first, the concerned party fails to file an administrative lawsuit against the decision within the statutory period; and second, although an administrative lawsuit was filed, the administrative decision is not revoked by an effective administrative judgment or ruling. Therefore, whether the administrative invalidation decision has retroactive effect on any relevant administrative punishment decision, judgment, ruling, written mediation or contract should be determined based on the administrative judgment or ruling if the concerned party has filed an administrative lawsuit against an administrative invalidation decision.

Article 2 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

Where a claim asserted by the right holder in a patent infringement lawsuit is declared invalid by the patent administration department under the State Council, the people’s court trying the patent infringement dispute case may rule to dismiss the lawsuit based on the invalidated claim.

Where there is evidence to prove that the decision declaring the abovementioned claim invalid is revoked by an effective administrative judgment, the right holder may file another lawsuit.

Where the patentee files another lawsuit, the statute of limitations shall be counted from the date of service of the administrative judgment stated in paragraph 2 of this Article.

This provision is made to improve the trial efficiency of civil cases involving patent infringement and avoid unnecessary extension of the trial period. In judicial practice, only a relatively small ratio of administrative invalidation decisions is revoked in administrative cases. Therefore, after the CNIPA has made a decision declaring a patent right invalid, the people’s court trying the civil case involving patent infringement may rule to dismiss the lawsuit without waiting for the final result of the administrative case. If the administrative invalidation decision is eventually revoked, the right holder may file another lawsuit.

If the CNIPA makes the administrative decision declaring a patent invalid during the second instance trial, the court of second instance may determine whether to rule to dismiss the lawsuit based on the circumstances of the case.

If, after the administrative invalidation decision is made and an effective civil judgment on infringement has not been fully enforced, a concerned party petitions for retrial in accordance with the administrative invalidation decision, the people’s court may rule to suspend the examination of the retrial and the enforcement of the effective judgment in accordance with Article 29 of the Interpretation (II) of Patent Infringement Dispute Cases, taking into account whether the concerned party has filed an administrative lawsuit against the administrative invalidation decision. If the concerned party does not file an administrative lawsuit, or the administrative invalidation decision is not revoked by an effective administrative judgment, the people’s court shall retrial the civil judgment or written mediation on infringement that has not been fully enforced.

In a retrial of a dispute over utility model patent infringement, Shaanxi Dongming Agricultural Technology Co. v. Shaanxi Qinfeng Agricultural Machineries (Group) Co.,⁹⁰ the Supreme People’s Court held that the point in time at which a patent is declared invalid in accordance with Article 47 paragraph 2 of the Patent Law is the date of decision as indicated in the written decision on the examination of the request for a declaration of patent invalidity.

4.3.2.8 Temporary protection of invention patents

An invention patent application needs to go through procedures like early publication and substantive examination before the patent can be granted. Once the invention patent application is published, its technical contents will be known to the public. According to Article 11 of the Patent Law, acts of exploiting the technical solution of a patent before the patent is granted do not constitute acts of infringement. Therefore, the issue of temporary protection between the publication of the invention patent application and the announcement of the granting of the patent arises.

Article 13 of the Patent Law stipulates the following: “After the publication of an invention patent application, the applicant may require the entity or individual exploiting the said invention to pay an appropriate amount of royalties.” These royalties can only be claimed after the invention patent is granted. Article 85 paragraph 2 of the Rules for the Implementation of the Patent Law also stipulates that a party’s request to a patent administration department for mediation on the payment of the “appropriate amount of royalties” shall only be filed after the patent is granted. Article 18 paragraph 1 of the Interpretation (II) of Patent Infringement Dispute Cases specifies that the specific amount of the royalties can be reasonably determined by reference to royalties for the patent license.

As it is usually necessary to amend claims before granting, the protection scope claimed by the applicant on the publication date of the invention patent application may be different from the protection scope of the patent right once granted. In accordance with Article 18 paragraph 2 of the Interpretation (II) of Patent Infringement Dispute Cases, where the alleged infringing technical solution falls within both protection scopes, the people’s court shall determine that the defendant has exploited the patent, in which case the right holder’s request for an “appropriate amount of royalties” is supported. Where the alleged infringing technical solution falls within only one of the scopes, the assertion is rejected.

During the temporary protection period, the manufacturing, selling and importing of the product do not constitute acts of infringement, and the concerned party only bears the obligation to pay an “appropriate amount of royalties.” Article 18 paragraph 3 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

where the appropriate amount of royalties stipulated in Article 13 of the Patent Law has been paid or a promise to pay has been made in writing, the right holder’s assertion that the acts of using, offering for sale, and selling constitute infringement shall not be supported by the people’s courts.

4.3.3 Joint infringement and aiding and abetting infringement

4.3.3.1 Joint infringement

Joint patent infringement refers to two or more persons conspiring or cooperating to perform acts that infringe patent rights. Various provisions of the Civil Code apply to the determination of such infringement. Article 1168 of the Civil Code stipulates the following: “Where two or more persons jointly commit a tortious act causing damage to another person, they shall bear joint and several liability.” With respect to the bearing of liabilities for joint infringement, external liability and internal liability are distinguished. In the former case, the co-infringers are jointly and severally liable. According to Article 178 of the Civil Code, joint and several liability is an overall liability to an external party. Thus, the right holder has the right to request some or all of the persons jointly and severally liable to bear the liability. In other words, each person liable bears full liability for the infringement.

In a retrial of a dispute over invention patent infringement, SMC Inc. v. Leqing Zhongqi Pneumatic Technology Co.,⁹¹ the Supreme People’s Court held that joint infringement has the following prerequisites: the infringers are two or more persons; each infringer subjectively has the joint intent; there is mutual use, cooperation or support between the acts of the infringers seen from an objective perspective; and the consequences of the damage resulting from the acts of each infringer falls within the scope of their joint intent.

Joint infringers are jointly and severally liable for acts of joint infringement. In an appeal of a dispute over utility model patent infringement, Dongguan Hongding Home Co. v. Dongguan Kangsheng Furniture Co.,⁹² the Supreme People’s Court held that, if some co-infringers have settled with and made compensation to the right holder for part of their losses, the remaining co-infringers will only be jointly and severally liable for compensation to the right holder for its losses as a result of the infringement after deducting the paid compensation, to avoid double enrichment of the right holder.

4.3.3.2 Abetting and aiding infringement

Article 1169 of the Civil Code stipulates the following:

A person who aids or abets an actor in the commission of a tortious act shall assume joint and several liability with the actor.

A person who aids or abets an actor with no or limited capacity for performing civil juristic acts in the commission of a tortious act shall assume tort liability. The guardian of the actor with no or limited capacity for performing civil juristic acts shall assume corresponding liability where he/she fails to fulfill the duties of a guardian.

Article 21 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

Where a person knows that the relevant product is a raw material, equipment, component, or intermediate specially used for exploiting a patent, provides, without the authorization of the right holder and for production and business purposes, such a product to another person to commit patent infringement, the right holder’s assertion that the provider’s acts constitute aiding infringement shall be supported by the people’s courts.

Where a person knows that a product or a process has been granted a patent right actively induces, without the authorization of the right holder and for production and business purposes, another person to commit patent infringement, the right holder’s assertion that the inducer’s acts constitute abetting others to commit infringement […] shall be supported by the people’s courts.

In a retrial of a dispute over utility model patent infringement, Liu Hongbin v. Beijing Jinglianfa Digital Control Technology Co.,⁹³ the Supreme People’s Court held that aiding infringement, in the context of the Patent Law, does not refer to just any kind of aiding act but specifically refers to the act of providing to others a product specially used for infringement, to commit patent infringement without the authorization of the patentee and for production and operation purposes. If an actor knows that the relevant product is a raw material, equipment, component or intermediate specially used for exploiting the technical solution of the patent, and provides this to another party without the authorization of the right holder and for production and business purposes, and that other party subsequently commits patent infringement, then the actor’s act of providing the product constitutes aiding others to commit patent infringement.

The “specially used product” is identified against the criterion of whether the raw material, product, component or intermediate is of substantial significance for realizing the technical solution protected by the patent and has “substantial non-infringing usages.” If the raw material or product is indispensable for realizing the technical solution protected by the involved patent and has no other “substantial non-infringing usage” than for use in the protected technical solution, then the raw material or product is generally identified as being “specially used.” The right holder bears the burden of proving that the relevant product is “specially used.”

4.3.4 Defenses in patent infringement lawsuits

4.3.4.1 Prior art defense

According to Article 67 of the Patent Law, where an alleged infringer has evidence to prove that the technology or design they exploited forms part of the prior art or is a prior design, such exploitation does not constitute an infringement of the patent right. This provision was added to the 2008 Patent Law out of consideration that the protection scope of patent rights should not cover prior art and technologies that are obvious and equivalent to prior art (see Section 4.8.9 regarding the prior design defense).

With respect to the definition of prior art, Article 22 paragraph 5 of the Patent Law stipulates the following: “Prior art refers to any technology known to the public domestically and/or abroad before the filing date of patent application.” This wording was inserted into the 2008 Patent Law. Previously, the provision had defined different geological scopes of public disclosure through publications, public use or other means. To determine the prior art for a patent, the version of this provision in the Patent Law that applied at the patent filing date is considered. Article 22 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following: “Regarding the prior art defense or prior design defense asserted by an alleged infringer, the people’s courts shall define the prior art or prior design in accordance with the Patent Law that was in effect upon the patent filing date.”

In determining whether the prior art defense is sustained, the main factor to be considered is the relation between the alleged infringing technology solution and the prior art. Even though the alleged infringing technical solution constitutes literal infringement, so long as the alleged infringer can provide evidence to prove that the alleged infringing technology forms part of the prior art, the prior art defense may be sustained.

In a retrial of a dispute over invention patent infringement, Strix Ltd v. Ningbo Shenglida Electric Manufacturing Co.,⁹⁴ the Supreme People’s Court held that whether a prior art defense applies depends only on whether all technical features in the alleged infringing product alleged to fall within the protection scope of the patent right are identical or equivalent to corresponding technical features of technical solutions publicly disclosed in the prior art. A prior art defense cannot be excluded merely because the alleged infringing product is identical to the patent.

With respect to the judgment method for the prior art defense, Article 14 paragraph 1 of the Interpretation of Patent Infringement Dispute Cases stipulates the following:

Where all the technical features alleged to fall within the protection scope of a patent right are identical or have no substantial difference with the corresponding technical features of a prior art technical solution, the people’s courts shall determine that the technical solution implemented by the alleged infringer forms part of the prior art as stipulated in Article 62 of the [2008] Patent Law.

This provision clarifies that the technical features alleged to fall within the protection scope of a patent right, rather than all technical features of the technology implemented by the alleged infringer, are compared with corresponding technical features of the prior art. If the two are identical or have no substantial difference, then the technology implemented by the alleged infringer forms part of the prior art.

In a retrial of a dispute over utility model patent infringement, Yancheng Zetian Machinery Co. v. Yancheng Geruite Machinery Co.,⁹⁵ the Supreme People’s Court held that, in examining the prior art defense, the alleged infringing technical solution shall be compared with the prior art, rather than comparing the prior art with the patented technical solution. The examination method is to determine the technical features alleged to fall within the protection scope of the patent right with reference to the claims of the patent, and to judge whether identical or equivalent technical features are disclosed in prior art. Prior art defense does not require the alleged infringing technical solution to be completely identical to prior art. The technical features in the alleged infringing technical solution that are irrelevant to the protection scope of the patent right shall not be considered in determining the prior art defense.

In a retrial of a dispute over invention patent infringement, Beijing Baidu Netcom Science and Technology Co. v. Beijing Sogou Technology Development Co.,⁹⁶ the Supreme People’s Court held that, in determining whether technical features alleged as falling within the protection scope of a patent right are identical to or have no substantial difference with the corresponding technical features in prior art, the focus should be on the technical problems to be solved by the patent and the functions and technical effects of the disputed technical features recited in the claims. The difference between the two in terms of means, functions, effects and the degree of impact thereof shall be considered.

To determine whether “substantial difference” exists in the prior art defense, the doctrine of equivalents may be used as a reference. In an appeal of a dispute over utility model patent infringement, Foshan Shunde Fashion Electrical Appliances Mfg. Co. v. Zhejiang iSMAL Hi-Tech Electrics Co.,⁹⁷ the Supreme People’s Court held that, if a technical feature in the alleged infringing technical solution and the corresponding technical feature in a prior technical solution are directly interchangeable customary means in the technical field, then it can be determined that no substantial difference exists.

In an appeal of a dispute over invention patent infringement, Wang Yeci v. Xuzhou Huasheng Industry Co.,⁹⁸ the Supreme People’s Court held that, where a patented technical solution has specifically indicated its invention points and emphasized that all technical features other than the invention points are general components, if the technical features corresponding to the invention points have been disclosed in prior art whereas other technical features have not, and if the combination of the prior technology and general components inevitably leads to an overall prior technical solution corresponding to the patented technical solution, then a prior art defense is sustained.

4.3.4.2 Conflicting application defense

Article 22 paragraph 2 of the Patent Law stipulates the following:

Novelty means that, the invention or utility model does not form part of the prior art; no entity or individual has filed a patent application for the identical invention or utility model with the patent administration department under the State Council before the filing date and the content of the application is disclosed in patent application documents published or other patent documents announced after the filing date.

A “patent application for the identical invention or utility model [that is filed] before the filing date and the [content of which] is disclosed in patent application documents published or other patent documents announced after the filing date” is briefly referred to as a conflicting application. A conflicting application can be used for separate comparisons with a patent to assess the novelty of the patent but cannot be used in combination with other prior art, conflicting applications or well-known general knowledge to assess the inventiveness of the patent. If a technical solution has been disclosed in a conflicting application, then it has no novelty in comparison to the conflicting application and thus cannot be granted a patent. Therefore, an alleged infringing technical solution that has been disclosed in a conflicting application does not fall within the protection scope of the patent right, according to the same rationale as for a prior art defense.

In a retrial of a dispute over utility model patent infringement, Cixi Bosheng Plastic Products Co. v. Chen Jian,⁹⁹ the Supreme People’s Court held that, where an alleged infringer asserts that they did not infringe the patent on the ground that the alleged infringing technical solution was disclosed in a conflicting application, the people’s courts may examine whether the conflicting application defense is sustained with reference to provisions concerning the prior art defense. As conflicting application and prior art defenses differ in their definition and nature, the judgment criteria for examining a conflicting application defense are compatible with the nature of the conflicting application. Only when each technical feature in the alleged infringing technical solution has been separately and fully disclosed in a conflicting application and has no novelty compared with the conflicting application can it be determined that the conflicting application defense is sustained.

4.3.4.3 Legitimate source defense

Article 77 of the Patent Law stipulates the following: “Any person who, for production and business purposes, uses, offers to sell, or sells a patent-infringing product without knowing that it was manufactured and sold without the authorization of the patentee, may not be liable for compensation provided that he can prove the legitimate source of the product.” According to this provision, the legitimate source defense has two prerequisites. First, the person acted in good faith with no subjective fault in using, offering for sale or selling the infringing product, and the person did not know or should not have known that the relevant product was an infringing product. Second, a legitimate source of the infringing product used, offered for sale or sold by the defendant can be proved. If the legitimate source defense is sustained, the defendant is not liable for compensation.

With respect to the legitimate source defense, Article 25 paragraphs 2–3 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

“Without knowing” […] means neither actually know nor should have known.

“Legitimate source” […] means the product is obtained through a normal commercial manner such as a legitimate sales channel or an ordinary sales contract. For a legitimate source, the person who uses, offers to sell, or sells the product shall provide relevant evidence in compliance with the course of dealing.

The course of dealing in the disputed case is determined based on whether the trading subjects are natural persons, “individual-run industrial and commercial households” or companies, the price of the subject matter, the customary ways of trading in the industry or region, and so on to determine the requirements for the evidence for proving a legitimate source.

With respect to whether cessation of the infringement is ordered when the legitimate source defense is sustained, Article 25 paragraph 1 of the Interpretation (II) of Patent Infringement Dispute Cases stipulates the following:

Where a person, for production and business purposes, uses, offers to sell, or sells a patent-infringing product without knowing that such product is made and sold without authorization of the patentee, and the legitimate source of the product can be proved by evidence, the people’s courts shall support the right holder’s assertion of ordering that person to stop aforesaid acts of using, offering for sale, or selling, unless the user of the alleged infringing product provides evidence to prove that reasonable consideration for such a product has been paid.

The “reasonable consideration” in this provision refers to a trading price or trading condition that is basically equivalent to or slightly lower than that of the patented product. If the consideration is significantly lower than the trading price or condition of the patented product, it is usually presumed that the purchaser should have known the purchased product was not authorized by the patentee.

In a retrial of a dispute over design patent infringement, Guangdong Archie Hardware Co. v. Yang Jianzhong,¹⁰⁰ the Supreme People’s Court held that the legitimate source defense is a right granted by law to bona fide users and sellers of infringing products. According to the principle that “the burden of proof is on the party that raises claims,” to claim the legitimate source defense, the user or seller of an infringing product must provide evidence (e.g., purchase invoices, receipts and payment vouchers) to prove that the infringing product was obtained legitimately. The legitimate source defense has two prerequisites: the user or seller has no subjective fault, and the alleged infringing product is obtained from a legitimate source. Regarding the subjective condition, the user or seller of the alleged infringing product needs to prove that they did not know they were using, offering for sale or selling an infringing product. As a negative fact, the burden of proof is usually on the right holder to prove the subjective status that the alleged infringer knew or should have known. As to whether there is a legitimate source for the alleged infringing product, the user or the seller bears the burden of proving that there is a legitimate purchasing channel, a reasonable price and a direct supplier for the alleged infringing product.

With respect to the determination of a legitimate source defense asserted by a seller, in an appeal of a dispute over utility model patent infringement Baokou (Xiamen) Sanitary Ware Co. v. Guantao Peilong Water Heating Installation and Maintenance Store,¹⁰¹ the Supreme People’s Court held that, if a seller can prove that they have complied with legitimate and normal market trading rules, the product being sold was obtained from a clear source and a legitimate channel and at a reasonable price, and their act of selling it was in good faith and complied with the course of dealing, then it can be presumed that the seller has no subjective fault. Under this circumstance, the right holder should present evidence to the contrary.

With respect to the assumption of liability after a legitimate source defense is sustained, in an appeal of a dispute over utility model patent infringement, Guangzhou Surui Mechanical Equipment Co. v. Shenzhen Helitai Technology Co.,¹⁰² the Supreme People’s Court held that a legitimate source defense is a defense for release from the liability of compensation but not a defense to infringement. A seller’s legitimate source defense neither changes the tortious nature of the act of selling the infringing product nor releases the seller from the liability of stopping the sales of the infringing product. The seller still bears all reasonable costs of the right holder for obtaining the remedy of infringement cessation.

4.3.4.4 Prior-use rights defense

Article 9 paragraph 2 of the Patent Law states the following: “If two or more applicants file patent applications for the identical invention-creation, the patent right shall be granted to the applicant whose application was filed first.” The prior-use rights defense aims to compensate for the deficiency of this first-to-file rule. According to Article 75(2) of the Patent Law, “before the filing date of the patent application, any person who has already manufactured the identical product, used the identical process, or made necessary preparations for its manufacturing or using and continues to manufacture or use it within the original scope,” shall not be deemed as having infringed the patent right.

With respect to the prior-use rights defense, Article 15 of the Interpretation of Patent Infringement Dispute Cases stipulates the following:

Where an alleged infringer asserts prior-use rights for an illegally acquired technology or design, the assertion shall not be supported by the people’s courts.

Under either of the following circumstances, the people’s courts shall determine the circumstance as “made necessary preparations for its manufacturing or using” as prescribed in Article 69(2) of the Patent Law:

1. (1) the main technical drawings or process documents for implementing an invention-creation have been completed; or
2. (2) the main equipment or raw materials for implementing an invention-creation have been made or purchased.

The “original scope” stipulated in Article 69(2) of the Patent Law includes the existing scale of production and the scale of production achievable by making use of existing production equipment or based on existing production preparations as of the filing date of a patent application.

Where the holder of the prior use right, after the filing date of the patent application, transfers, or licenses others to implement the technology or design that it has implemented or has made necessary preparations for implementing, the assertion by the alleged infringer that such act of implementation constitutes continuing implementation within the original scope shall not be supported by the people’s courts, unless the technology or design is transferred or succeeded along with the original company.

In an appeal of a dispute over invention patent infringement, Wang Yeci v. Xuzhou Huasheng Industry Co.,¹⁰³ the Supreme People’s Court held that design drawings are the fundamental basis for product processing and inspection in the machinery manufacturing field. Thus, where an alleged infringer has designed the drawings for key parts of the alleged infringing product, and all the other parts thereof are general parts, it can be determined that the alleged infringer has finished the main technical drawings essential to the implementation of the invention-creation and has made necessary preparations for manufacturing the alleged infringing product, and a prior-use rights defense can be sustained.

In a retrial of a dispute over invention patent infringement, Jiangxi Yintao Pharmaceutical Co. v. Shaanxi Hanwang Pharmaceutical Co.,¹⁰⁴ the Supreme People’s Court held that whether a prior-use rights defense is sustained mainly depends on whether the alleged infringer had, before the filing date of the patent application, exploited the patent or made necessary preparations technically or in material form for exploiting the patent. If the registration application files of the alleged infringing product – in this case, a pharmaceutical product – show that the alleged infringer had finished the process documents and equipment for manufacturing the alleged infringing pharmaceutical product before the filing date of the patent application, then it shall be determined that they had made the necessary preparations for manufacturing or using the patent. As the manufacturing certification of a pharmaceutical product is reviewed and granted by a medical product regulatory department, the necessary preparations for manufacturing or using shall not be determined based on the approval of such a certification.

In a retrial of a dispute over invention patent infringement, Beijing Yingtelai Technology Co. v. Beijing SinoShield Chuangzhan Doors Co.,¹⁰⁵ the Supreme People’s Court held that, where the manufacturer is not the defendant, but the seller can prove that the alleged infringing product was obtained from a legitimate source and that the manufacturer enjoyed prior-use rights, the seller can also raise a prior-use rights defense.

4.3.4.5 Other circumstances not deemed as patent infringement

In addition to the defenses described above, according to Article 75 of the Patent Law, none of the following shall be deemed patent infringement:

• intellectual property right exhaustion (i.e., after the sale of a patented product or a product acquired directly in accordance with a patented process by the patentee or any entity or individual authorized by the patentee, any other person uses, offers to sell, sells or imports that product);
• any foreign means of transport – temporarily passing through the territory, territorial waters or territorial airspace of China – uses the relevant patent in its devices and installations for its own needs and in accordance with any agreement concluded between China and the country to which the foreign means of transport belongs, in accordance with any international treaties to which both countries are parties, or based on the principle of reciprocity;
• any person uses the relevant patent specially for the purposes of scientific research and experimentation; and
• Bolar exceptions (i.e., any person manufactures, uses, or imports a patented pharmaceutical product or patented medical apparatus for the purpose of providing the information needed for administrative examination and approval, and any other person manufactures or imports a patented pharmaceutical product or a patented medical apparatus for that person).