An International Guide to
Patent Case Management for Judges

4.6 Procedural issues concerning patent-related civil cases

4.6.1 Evidence rules and evidence preservation

With respect to issues concerning evidence in civil lawsuits, detailed provisions exist in the Civil Procedure Law, Interpretation of the Civil Procedure Law, Provisions on Evidence in Civil Procedures, and related judicial interpretations. These generally apply to patent-related civil cases. Based on the characteristics of patent cases, the Patent Law and related judicial interpretations also contain some special provisions related to evidence. The Supreme People’s Court has also formulated the Provisions on Evidence in Civil Procedures involving Intellectual Property Rights.

4.6.1.1 Provisions related to evidence in the Civil Procedure Law and related judicial interpretations

With respect to evidence, detailed provisions exist in Chapter VI (Articles 63–81) of the Civil Procedure Law and Part 4 (Articles 90–124) of the Provisions on Evidence in Civil Procedures. The latter provisions were issued in 2001 by the Supreme People’s Court and later amended in 2008 and 2019. This judicial interpretation currently includes 100 articles.

China has set up three internet courts: in Hangzhou, Beijing and Shenzhen. In the Provisions on the Trial of Cases by Internet Courts, Article 11 stipulates rules for internet courts in determining the authenticity of electronic evidence, Article 13 clarifies the general requirements and legal basis for the examination of evidence in online lawsuits, and Articles 14–19 stipulate rules regarding evidence in online lawsuits. In particular, Articles 16–19 make special provisions regarding blockchain evidence deposits.

The Rules of Online Litigation of People’s Courts came into effect on August 1, 2021. This judicial interpretation defines the scope of validity and determination criteria for blockchain evidence deposits.

4.6.1.2 Provisions related to evidence in the Patent Law

Regarding evidence, the Patent Law primarily covers the following four aspects:

• Article 66 paragraph 1 provides for the burden of proof in new product manufacturing process invention patent infringement cases (see Section 4.3.2.5.4 of this chapter for further detail).
• Article 66 paragraph 2 stipulates that people’s courts may ask the patentee or any interested party to furnish a patent right evaluation report made by the patent administration department of the State Council after having conducted a search, analysis and evaluation of relevant utility models or designs. This provision makes it clear that the nature of such patent right evaluation reports is evidence. Patentees, interested parties or alleged infringers may take the initiative to present such a patent right evaluation report.
• Article 71 stipulates that people’s courts may order an infringer to provide account books and materials related to patent infringement (see Section 4.4.3.4 of this chapter for further detail).
• Article 73 provides for the pre-litigation preservation of evidence. With respect to evidence preservation applied before the filing of a lawsuit or during a lawsuit, Article 81 of the Civil Procedure Law and Article 98 of the Interpretation of the Civil Procedure Law also provide relevant provisions.

4.6.1.3 The Provisions on Evidence in Civil Procedures involving Intellectual Property Rights

The Provisions on Evidence in Civil Procedures involving Intellectual Property Rights, while being an important component of the evidence system for civil lawsuits, has characteristics different from those of the traditional civil evidence system. In February 2018, the General Office of the Communist Party of China’s Central Committee and the General Office of the State Council issued the Opinions on Strengthening Reform and Innovation in Intellectual Property Adjudication, specifically raising the reform target of “establishing evidence rules in compliance with characteristics of intellectual property cases.” In November 2019, the two offices issued the Opinions on Strengthening the Protection of Intellectual Property Rights, specifically requiring the “strict regulation of evidence standards” and the “formulation of judicial interpretations on rules for evidence in civil lawsuits involving intellectual property.”

To strengthen the judicial protection of intellectual property rights and to practically address intellectual property right holders’ difficulties in producing evidence and the high costs of safeguarding rights and interests, the Supreme People’s Court formulated the Provisions on Evidence in Civil Procedures involving Intellectual Property Rights, which included 33 articles. This further improved the system of evidence on important issues such as the submission of evidence, obstruction to proof, evidence preservation, judicial appraisal, identification of extraterritorial evidence, the protection of trade secrets during the litigation process and so on. These provisions came into effect on November 18, 2020.

4.6.2 Act preservation

4.6.2.1 Establishment of an act preservation system in intellectual property disputes

Article 61 of the Patent Law, as amended in 2000, stipulated the following:

Where a patentee or an interested party has evidence to prove that another person is infringing or is about to infringe its or his patent right, which, unless being stopped in time, may cause irreparable damage to his lawful rights and interests, the patentee or interested party may, before filing a lawsuit, apply to the people’s court for adopting measures for ordering to prohibit certain acts in accordance with the law.

The Supreme People’s Court issued the Provisions on the Pre-litigation Cessation of Patent Infringement in June 2001.¹²⁶ Later, in December 2001, the Supreme People’s Court issued the Interpretation of the Pre-litigation Cessation of Trademark Infringement and Preservation of Evidence.¹²⁷ Both judicial interpretations have played an important role in the people’s courts’ review of applications for the pre-litigation cessation of patent infringement.

Article 66 of the 2008 Patent Law further improved the act preservation system. The Civil Procedure Law, as amended in 2012, added relevant content on act preservation: Articles 100 and 101 provided for act preservation during and before litigation, respectively, thereby establishing an act preservation system for all civil cases, including those involving intellectual property rights. Articles 152–173 of the Interpretation of the Civil Procedure Law made further provisions regarding “preservation.”

In December 2018, the Supreme People’s Court issued the Provisions on Act Preservation in Intellectual Property Disputes, which included 21 articles covering the subject of applications, the courts of jurisdiction, examination procedures, factors in determining the necessity of preservation, the term of preservation measures, the identification of wrongful applications and the lifting of preservation measures, among other matters.

4.6.2.2 Main contents of the Provisions on Act Preservation in Intellectual Property Disputes

4.6.2.2.1 Jurisdiction

According to Article 3 of the Provisions on Act Preservation in Intellectual Property Disputes,

[a]n application for pre-litigation act preservation shall be filed before the people’s court with jurisdiction over intellectual property disputes at the place where the respondent is domiciled or before the people’s court with jurisdiction over the case.

Where an arbitration clause has been agreed upon between the parties, then the application shall be filed before the people’s court stipulated in the preceding paragraph.

4.6.2.2.2 Identification of “emergencies”

According to Articles 100–101 of the Civil Procedure Law, having an emergency is the prerequisite for applying for pre-litigation act preservation; the application for act preservation during litigation may also involve emergency circumstances; and, for any application for act preservation in an emergency, a people’s court must decide the same within 48 hours after receipt of the application. According to Article 6 of the Provisions on Act Preservation in Intellectual Property Disputes, an emergency is a circumstance that “would damage the interests of the applicant if a preservation measure is not implemented immediately.” In patent-related civil cases, emergencies primarily include the following circumstances:

• the disputed patent will soon be illegally disposed of;
• the patent of the applicant is being or will soon be infringed during a time-sensitive occasion like a trade fair; and
• other circumstances that require the immediate implementation of act preservation measures.

4.6.2.2.3 Factors to be considered for determining the necessity of act preservation

Article 7 of the Provisions on Act Preservation in Intellectual Property Disputes stipulates the following:

People’s courts shall comprehensively consider the following factors in examining an application for act preservation:

1. (1) whether the application has a factual and a legal basis, including whether the validity of the asserted intellectual property right is stable;
2. (2) whether the applicant’s legitimate rights and interests will be irreparably damaged or make it difficult to enforce the ruling of the case if act preservation measures are not implemented;
3. (3) whether the damage caused to the applicant if act preservation measures are not implemented exceeds the damage caused to the respondent by implementing the act preservation measures;
4. (4) whether implementing act preservation measures harms the public interest; [and]
5. (5) other factors that should be considered.

According to Article 10 of these provisions, “irreparable damage,” in patent-related civil cases, primarily includes the following:

• circumstances where the act of the respondent will make it difficult to control the infringement and significantly increase the losses suffered by the applicant; and
• circumstances where the act of infringement by the respondent will result in a significant reduction in the applicant’s share in the relevant market.

Patent-related civil cases often involve judgment on whether the validity of a patent right is stable. Article 8 of the provisions stipulates the following:

People’s courts shall comprehensively consider the following factors in examining and judging whether the validity of an intellectual property right asserted by the applicant is stable:

1. (1) the type or nature of the involved intellectual property right;
2. (2) whether the involved intellectual property right has been substantively examined;
3. (3) whether the involved intellectual property right is in an invalidation or revocation procedure and has the possibility of being declared invalid or revoked;
4. (4) whether there is a dispute over the ownership of the involved intellectual property right; [and]
5. (5) other factors that may lead to instability of the validity of the involved intellectual property right.

With respect to applications for act preservation based on utility model patents or design patents, Article 9 of the provisions specifically stipulates the following:

Where an applicant applies for act preservation based on a utility model patent or design patent, the applicant shall submit a search report or an evaluation report issued by the patent administration department under the State Council or a decision maintaining the validity of the patent right made by the patent administration department under the State Council. Where the applicant refuses to submit such documents without justifiable reasons, the people’s court shall rule to dismiss the application.

The main consideration here is that utility model patents and design patents are not substantively examined before granting according to the Patent Law and are therefore more likely to be declared invalid. The special requirements for applications for act preservation based on these two types of patent rights prevent the abuse of rights in applying for act preservation.

4.6.2.2.4 Identification of “wrongful application” and applicant’s liability for compensation

Article 16 of the Provisions on Act Preservation in Intellectual Property Disputes interprets the phrase “wrongful application” from Article 105 of the Civil Procedure Law to mean:

1. (1) where the applicant does not file a lawsuit or applies for arbitration within 30 days after implementing the act preservation measures;
2. (2) where the act preservation measures are improper from the beginning because the intellectual property right asserted is declared invalid, or for other reasons;
3. (3) where an application for ceasing the infringement of intellectual property right or unfair competition was filed, whereas an effective judgment was made holding that infringement or unfair competition is not constituted; [or]
4. (4) other circumstances where the application is wrongfully made.

This provision is provided based on the objective principle of imputation, without considering the subjective fault of the applicant.

According to Article 105 of the Civil Procedure Law, where an application for act preservation is “wrongfully made,” the applicant shall compensate the respondent for losses suffered due to the act preservation. The Provisions on Act Preservation in Intellectual Property Disputes stipulate that, if the applicant does not file a lawsuit after applying for pre-litigation act preservation or if the parties agree to arbitration, then a lawsuit for losses filed by the respondent in accordance with Article 105 of the Civil Procedure Law will come under the jurisdiction of the people’s court that implemented the act preservation measures. However, if the applicant files a lawsuit, then it comes under the jurisdiction of the people’s court that accepts the lawsuit.

In the retrial case of Anji Xueqiang Bamboo and Wood Products Co. v. Xu Zanyou,¹²⁸ an infringement dispute, the Supreme People’s Court held that the property preservation ruling did not fall under the “rulings” stipulated in Article 47 paragraph 2 of the Patent Law (at that time, the 2008 Patent Law) and that the decision declaring the involved patent invalid had a retrospective effect on the property preservation ruling. If an alleged patent infringement has not yet been confirmed, and the patentee has failed to fulfill its duty of care when applying for measures like property preservation or act preservation, causing direct losses to the alleged infringer, then the patentee’s application is a “wrongful application” and constitutes a tort.

4.6.2.2.4.1 Application for act preservation and preliminary judgment for cessation of infringement at the same time

In an appeal of a dispute over invention patent infringement, Valeo Cleaning System Co. v. Xiamen Lukasi Automotive Parts Co.,¹²⁹ the Supreme People’s Court held that, in a patent infringement litigation procedure, the act preservation that orders the cessation of an alleged act of infringement has an independent value. Where a party applies simultaneously for act preservation and a preliminary judgment to cease the alleged infringement, and the people’s court holds that a preliminary judgment shall be made, then the application for act preservation shall be examined, and a ruling shall be made if the conditions for act preservation are met.

4.6.2.2.5 Reverse act preservation related to e-commerce platforms

In the case of Yongkang Lianyue Industry and Trade Co. v. Cixi Bosheng Plastic Products Co.,¹³⁰ a utility model patent infringement dispute, the Supreme People’s Court held that an operator of an e-commerce platform, upon the receipt of a notice from an intellectual property right holder showing preliminary evidence of infringement on their platform, has a statutory obligation to take necessary measures to stop the infringement, such as by deleting, blocking and disconnecting the link, and terminating the transactions and services. If, due to an emergency, the merchant’s legitimate rights and interests will suffer irreparable damage if the link is not restored, the merchant on the platform may apply for act preservation ordering the operator of the e-commerce platform to implement act preservation measures like restoring the link. In such a case, the people’s court shall accept such an application and examine it in accordance with Article 100 of the Civil Procedure Law and related judicial interpretations. When determining whether to implement the act preservation measures based on the application of the alleged infringer, the major factors to be considered include:

• whether the applicant’s request has a factual basis and a legal basis;
• whether the applicant will suffer irreparable damage if the link is not restored;
• whether the damage caused to the patentee by restoring the link exceeds the damage caused to the alleged infringer if the link is not restored;
• whether the public interest will be harmed if the link is restored; and
• other factors.

4.6.3 Finding of technical facts

Technical facts are facts involving specialized technical content that need to be found in the trial of civil cases involving intellectual property. As trials of technology-related cases involve the finding of complex technical facts, people’s courts have established a diversified technical fact-finding mechanism based on the technical investigation officer system, with technical consultancy, expert assessors, expert assistants and technical appraisals as its important components.

4.6.3.1 Technical investigation officer system

To align with the establishment of the intellectual property courts in Beijing, Shanghai and Guangzhou, the Supreme People’s Court issued the Interim Provisions on Technical Investigation Officers on December 31, 2014, formally establishing the technical investigation officer system.¹³¹ On August 8, 2017, the Supreme People’s Court issued the Guiding Opinions on the Selection of Technical Investigation Officers to provide for the selection and qualification requirements of technical investigation officers and related procedures.¹³² Article 13 of the guiding opinions stipulates the following: “Other people’s court with jurisdiction over technology-related intellectual property cases may select and appoint technical investigation officers with reference to these Guiding Opinions after reporting to the Supreme People’s Court for approval.”

Article 51 of the Law on the Organization of the People’s Courts stipulates the following: “People’s courts may set up positions for judicial technical personnel based on the needs of adjudication work, to take charge of relevant issues.” Technical investigation officers are not adjudication personnel but are judicial technical personnel among adjudication assistance personnel. The technical investigation officer system has played an active role in increasing the neutrality, objectivity and scientificity of the identification of technical facts and in improving the quality and efficiency of technology-related case adjudication.

The Supreme People’s Court also formulated the Provisions on Technical Investigation Officers, which came into effect on May 1, 2019.¹³³ These provisions contain 15 articles regarding technical investigation officers participating in different litigation procedures in the adjudication of intellectual property cases. The provisions relate to the procedure, duties, validity and legal responsibilities of such officers, as well as the types of cases, positioning of identity, appointment and dispatching of personnel, notification and recusal, work duties, the validity of technical investigation opinions, signatures on adjudication documents, and the assumption of responsibilities, among other matters. Article 1 of the provisions stipulates the following: “In the trial of intellectual property cases involving patents, new plant varieties, layout designs of integrated circuits, technical secrets, computer software, and monopoly, which have high professional and technical requirements, the people’s courts may appoint technical investigation officers to participate in the litigation activities.”

4.6.3.2 Entrusted technical appraisal

Appraisal conclusions form a type of statutory evidence in civil lawsuits. According to Article 76 of the Civil Procedure Law,

[a] party may apply to a people’s court for the appraisal of a specialized issue for the verification of a fact. When a party so applies, both parties shall determine qualified appraisers through negotiation; where such negotiation fails, the people’s court shall designate appraisers.

Where the parties do not apply for appraisal, but the people’s court deems it necessary to examine a specialized issue, it shall appoint qualified appraisers to conduct the appraisal.

Appraisal opinions belong to evidence, as stipulated in Article 63 of the Civil Procedure Law.

In addition to the Civil Procedure Law, the Interpretation of the Civil Procedure Law and the Provisions on Evidence in Civil Procedures involving Intellectual Property Rights make specific provisions on issues concerning such appraisals.

4.6.3.3 Persons with specialized expertise

According to Article 79 of the Civil Procedure Law, “[a] party may apply to a people’s court to notify person(s) with specialized expertise to appear in court and provide opinions on an appraisers’ opinions or specialized issues.” According to Articles 122–123 of the Interpretation of the Civil Procedure Law,

[a] party may, according to Article 79 of the Civil Procedure Law, file an application prior to the expiry of the time limit for producing evidence, to have one to two persons with specialized expertise to appear in court to cross-examine appraisal opinions on behalf of the party, or to provide opinions on the specialized issues involved in the fact-finding of the case.

The opinions provided in court on specialized issues by persons with specialized expertise shall be deemed as the statements of the concerned parties.

[…]

A people’s court may query the persons with specialized expertise who appear in court. With the permission of the people’s court, a concerned party may query the persons with specialized expertise who appear in court. Persons with specialized expertise who appear in court upon separate applications by different concerned parties may cross-examine each other on relevant issues involved in the case at hand.

Persons with specialized expertise shall not participate in court trial activities not involving specialized issues.

Both the Provisions on Evidence in Civil Procedures and the Provisions on Evidence in Civil Procedures involving Intellectual Property Rights provide for issues concerning persons with specialized expertise.

4.6.4 Relevant issues in patent cases involving foreign elements

For the trial of civil patent cases involving foreign elements, the Law on the Laws Applicable to Foreign-Related Civil Relations¹³⁴ and Part 4 (“ Special Provisions on Foreign-Related Civil Procedures”) of the Civil Procedure Law apply. Chapter 22 (“Special Provisions on Foreign-Related Civil Procedures”) of the Interpretation of the Civil Procedure Law further interprets relevant provisions of the Civil Procedure Law.

Article 522 of the Interpretation of the Civil Procedure Law stipulates that a people’s court may determine a case as a foreign-related civil case if:

1. (1) one or both concerned parties are foreigners, stateless persons, or foreign enterprises or organizations; or
2. (2) the habitual residences of one or both concerned parties are outside the territory of the People’s Republic of China; or
3. (3) the subject matter is located outside the territory of the People’s Republic of China; or
4. (4) the legal facts resulted in generating, altering, or terminating of civil relations occur outside the territory of the People’s Republic of China; or
5. (5) other circumstances based on which the case can be identified as a foreign-related civil case.

Chapter VII (“Intellectual Property Rights”) of the Law on the Laws Applicable to Foreign-Related Civil Relations includes three articles:

Article 48. The ownership and content of intellectual property rights are governed by the law of the place where protection is sought.

Article 49. The parties may by agreement choose the law applicable to the transfer and license of intellectual property rights. In the absence of any choice by the parties, the relevant provisions of this law on contracts shall apply.

Article 50. Liability for infringement of intellectual property rights is governed by the law of the place where protection is sought. The parties may also by agreement choose to apply the law of the place where the court is located after the infringement occurs.

On December 10, 2012, the Supreme People’s Court issued the Interpretation of the Law on the Laws Applicable to Foreign-Related Civil Relations, which came into effect on January 7, 2013, and was later amended on December 29, 2020.¹³⁵

Articles 8–10 of the Provisions on Evidence in Civil Procedures involving Intellectual Property Rights provide for the exemption and streamlining of notarization and authentication procedures for extraterritorial evidence in civil cases involving intellectual property. In particular, Article 8 lists circumstances under which the notarization and authentication of extraterritorial evidence can be exempted, including, inter alia, where there is other evidence to prove the authenticity of the extraterritorial evidence. Where the conditions stipulated in Article 8 are not met, but the circumstances stipulated in Article 9 are met, then the authentication of relevant extraterritorial evidence can be exempted.

To facilitate the parties and improve litigation efficiency, Article 10 of the Provisions on Evidence in Civil Procedures involving Intellectual Property Rights also specifically stipulates the following:

Where the formalities for the notarization or authentication of a power of attorney or other certification formalities have been undergone in accordance with the provisions of Articles 59 and 264 of the Civil Procedure Law under the procedure at first instance, a people’s court may no longer require the relevant party to undergo the aforesaid formalities concerning the power of attorney in subsequent civil procedures.

With respect to foreign-related patent administrative cases, relevant provisions in Chapter IX (“Foreign-Related Administrative Procedure”) of the Administrative Procedure Law apply.