On February 27, 2021, the Intellectual Property Tribunal of China’s Supreme People’s Court released a set of 46 rules based on a selection of 55 example cases from the 2,787 technical intellectual property (IP) cases concluded by the Court in 2020. From these 55 cases, the Tribunal refined them into 46 adjudication rules covering the trial of patent civil cases, the trial of patent administrative cases, the trial of new plant variety cases, trial of trade secret cases, trial of computer software cases, trial of IC layout design cases, trial of antitrust cases, and trials of jurisdictional and procedural issues. Summaries of the rules provided by the Tribunal follow.
As Susan Finder, Distinguished Scholar in Residence at Peking University School of Transnational Law, points out, “it is clear from the SPC IPC’s 2019 and 2020 annual reports that one of the goals of that court is unifying judicial standards and issuing these case summaries is used toward this end.”
I. Trial of patent civil cases
1. Factors for consideration of injunction of the nature of “anti-suit order”
[（2019）最高法知民终732、733、734号] Regarding an application for injunction to prevent applying for enforcement of an extraterritorial court ruling, the people’s court shall make a judgment based on the following factors: whether the respondent’s application for enforcement of an extraterritorial court judgment will have a substantial impact on the hearing and enforcement of Chinese litigation; Whether injunction measures are really necessary; whether the damage to the applicant caused by failure to enforce an injunction exceeds the damage caused to the respondent by taking enforcing an injunction; whether the adoption of injunction measures harms public interests; whether the adoption of injunction measures is in line with international comity principles; and other factors that should be considered. Regarding whether the respondent’s application for enforcement of the judgment of an extraterritorial court will have a substantial impact on the hearing and enforcement of Chinese litigation, it can be considered whether the parties in the Chinese and foreign litigation are basically the same, whether there is overlap in the subject of the trial, and whether the effect of the respondent’s extraterritorial litigation has an effect on the Chinese litigation, such as causing interference, etc. Regarding whether the adoption of an injunction is indeed necessary, the determination should be focused on whether the failure to adopt an injunction will cause irreparable damage to the applicant’s legitimate rights and interests or cause damages such as difficulty in enforcement of the judgment of the case; this damage includes both tangible material damage and intangible damages such as business opportunities and market interests; including damages to economic interests and damages in litigation; including damages to interests in China and damages to foreign interests. Regarding the principle of international comity, consideration can be given to the timing of case acceptance, the appropriateness of the jurisdiction of the case, and the appropriateness of the impact on the trial and judgment of extraterritorial courts.
2. In the preservation of behaviors of the nature of “anti-suit order”, the measures of “penalty per day” are applicable
[（2019）最高法知民终732、733、734号] The injunction measures that prohibit the respondent from certain behaviors are of particularity. If the respondent refuses to comply with the obligation to cease an act as specified by the injunction ruling, and violates the order, the illegal act constitutes a continuous violation of the injunction ruling and a continuous change to the original state, and so shall be deemed to have committed an illegal act every day, and may be fined daily and accumulated on a daily basis as appropriate.
3. Prerequisites for the recognition of service inventions
[（2020）最高法知民终1258号] The temporary working relationship between entities mentioned in Article 12, paragraph 2 of the Implementing Regulations is a prerequisite for the recognition of service inventions that belong to an employer. The criterion for judging is whether the entity has obtained work for the inventor, including the creative work for completing the invention-creation involved in the case. Where there is only a general cooperative relationship between the entity and the inventor, and the entity does not control the labor rights over the inventor, the relevant invention-creation of the inventor is not a service invention-creation.
4. Ownership of the rights of a service invention-creation within one year after leaving the original organization
[（2019）最高法知民终799号] An invention-creation related to the original company’s own job or assigned tasks made by the employee within one year of leaving the employer is a service invention-creation of the original employer, and the patent application right and patent right belong to the original employer; even if the invention-creation is related to the new employer’s job or assigned tasks, the new employer cannot have rights to the invention.
5. Ownership of rights when applying for a patent by using another’s trade secrets without permission
[（2020）最高法知民终871号] The basis of the claim is that if the relevant patent application right or the patent right belongs to the trade secret owner, the people’s court shall examine whether the patent document discloses the secret or the patented technical solution uses the trade secret, and whether the trade secret constitutes the substantive content of the patented technical solution. If the trade secret is actually disclosed in the patent document or used in the patented technical solution, and it constitutes the substantive content of the patented technical solution, the trade secret right holder shall have corresponding rights to the relevant patent application or patent.
6. Liability for damages for failure to perform good management obligations during the dispute over the ownership of patent rights
[（2019）最高法知民终424号] During the period of dispute over the right to apply for a patent or the ownership of the patent, the patent applicant or the registered patentee shall, based on the principle of good faith, be responsible for actively obtaining the patent authorization or prosecuting the patent. If a patent applicant or registered patent holder fails to perform its management obligations without justifiable reasons, resulting in the termination or loss of rights, and harming the legitimate rights and interests of the real right holder, it constitutes an infringement of the property rights of others and shall bear civil liability for compensation for economic losses.
7. Interpretation of “one” in the claims
[（2020）最高法知民终1070号] The “one” in the patent claim does not have limiting effect in a quantitative sense; the specific meaning should be determined according to the understanding of those of ordinary skill in the art after reading the claims and the description.
8. Determination of “for the purpose of production and operation” in the judgment of patent infringement
[（2020）最高法知民终831号] As stated in the first paragraph of Article 11 of the Patent Law “For the purpose of production and operation” cannot simply be equivalent to engaging in profit-making activities, nor can it be determined solely based on the institutional nature of the subject of patent enforcement, but should focus on the patent enforcement behavior itself, considering whether the behavior is a market activity and whether it affects the patentee, comprehensive judgment of market interests and other factors. Government agencies, institutions, public welfare organizations and other entities that are mainly engaged in public management, social services, and public welfare activities that implement patents, participate in market activities, and may harm the market interests of the patentee can be deemed to constitute “for the purpose of production and operation.”
9. Identification of patent co-implementers
[（2020）最高法知民终212号, （2019）最高法知民终181号] The tenderee that specifies the technical scheme in the bidding relationship or the purchaser that provides the technical scheme in the processing contract relationship essentially determines the implementation of the patent technical scheme, and such a party that directly implements the patent as the bid winner, the contractor, etc. shall constitute a joint patentee.
10. Restrictions on the application of the doctrine of equivalents by the rules of intentional exclusion
[（2020）最高法知民终1310] Where an applicant or patentee deliberately emphasizes the meaning of a certain feature in the claims and intentionally excludes a specific technical solution, the excluded technical solution shall not be included in the scope of patent protection by applying the doctrine of equivalents.
11. Judgment of “no substantive difference” in the prior art defense
[（2019）最高法知民终804号] In the determination of the prior art defense, if a certain technical feature of the alleged infringing technical solution and the corresponding technical feature in the prior technical solution constitute a conventional method that can be directly replaced in the field, it can be determined that there is no substantial difference between the two corresponding technical features.
12. The issue of the burden of proof in determining the amount of damages based on the profit of infringement
[（2019）最高法知民终725号] In a patent infringement case, where the right holder has actively provided evidence for infringement damage compensation, and based on the evidence submitted by him, the infringement profit can be reasonably calculated, and the amount of compensation claimed by him can be supported by the people’s court; if the accused infringer argues that the amount cannot not be supported, it shall submit counter-evidence sufficient to overturn the above-mentioned infringement gains and prove its actual infringement gains.
13. Consideration of relevant factors when applying statutory compensation or discretionary compensation to determine the amount of patent damage compensation
[（2020）最高法知民终357号; （2020）最高法知民终376号] Where statutory damages, infringer’s profits or evidence of royalties are difficult to prove specific amounts, the damage compensation needs to be determined on a discretionary basis based on the nature of the alleged infringement and the infringing product . Factors such as the value and profit rate of the infringer, the operating status of the accused infringer, the subjective malice of the accused infringer, and the compensation of the right holder in related cases can be considered.
For manufacturers as the source of infringement, compensation for infringement damages should be increased, and patentees should be encouraged to directly trace the source of the alleged infringing product to the manufacturing process; for retailers and users of alleged infringing products, their legal liabilities should be determined based on facts and laws. If there is evidence to prove that the infringement damage is higher than the statutory upper limit of compensation or lower than the statutory lower limit of compensation, the amount of compensation may be determined above the upper limit or below the lower limit.
14. Calculation method when calculating infringement profit based on operating profit
[（2019）最高法知民终830、831、832、833、834、851、881、886、888号] To calculate the profit from infringement based on operating profit, you can take the sales revenue minus the sales cost and value-added tax, and then subtract the sales expenses, management expenses and financial expenses; you can also simplify the calculation by multiplying the sales revenue by the operating profit rate.
15. The liability of the remaining joint infringers after some joint infringers have reached a settlement with the patentee and actually paid compensation
[（2019）最高法知民终181号] In cases of patent infringement disputes, where some joint infringers have reached a settlement with the right holder and have actually compensated the right holder for part of the loss, in order to avoid double profits for the right holder, the remaining joint infringers should deduct the compensation paid from their liability with the remainder jointly and severally liable to the right holder.
16. The distribution of profits obtained by the co-owners of the patent right from the independent implementation of the patent
[（2020）最高法知民终954号] If there is no agreement on the exercise of the rights among co-owners and one of the co-owners implements the patent alone, the People’s Court will not support a claim by the other co-owners for distribution of the proceeds obtained from the independent implementation of the patent.
17. Acceptance of a non-infringement declaratory judgment lawsuit at the time of invalidation of a patent right
[（2020）最高法知民终225号] The Court shall accept a declaratory judgment action for non-infringement even if a request for invalidation has been filed. The decision on the examination of the request for invalidation of a patent right does not have a definite legal effect as soon as it is filed. Before the invalidation ruling becomes effective, the patent right is still valid, and the people’s court shall accept the declaratory judgment lawsuit based on a warning letter it confirm that it does not infringe the patent right.
18. Infringement damages for utility model patents applied for the same technical solution on the same day after the rejection of an invention patent application
[（2020）最高法知民终699号] Where any party concerned applies for a patent for both invention and utility model on the same day for the same technical solution, if the application for a patent for invention is determined as lacking novelty or because a comparative document based on the same technical field is determined as lacking inventiveness and the legal status of the invention patent application has been finalized, the people’s court shall not support the party’s request for remedies for utility model infringement damage due to the fact that the applicant has not obtained the authorization for the same technical solution.
II. Trial of Patent Administrative Cases
19. Judgment whether a claim that defines the scope of protection by using more than two sets of different numerical range technical features together can be supported by the specification
[（2020）最高法知行终406、407号] Where a claim for which the scope of protection is jointly defined by two or more sets of numerical ranges, if an ordinary technician in this field can determine by reading the description that there is corresponding relationship between the technical features of each numerical range, and can obtain a specific way of implementation in compliance with the purpose of invention through limited experimentation, and can exclude a technical solution unable to achieve the purpose of invention without excessive labor, it shall be deemed that the claim can be supported by the description.
20. Identification of common-knowledge evidence
[（2020）最高法知行终35号] Generally known common-knowledge evidence refers to the technical dictionaries, technical manuals, textbooks and other literature that records the basic technical knowledge of this field; Whether or not the documents other than the technical dictionary, technical manual and textbooks are common-knowledge evidence shall be determined by taking into account the dissemination method, content, characteristics, audience, scope of dissemination and other factors of the documents.
21. Whether online information that needs authorization to access constitutes prior art
[（2020）最高法知行终422号] Whether the information in the QQ space, WeChat circle of friends and other online media that requires authorization to access constitutes prior art shall be comprehensively analyzed for the main purpose of the online media, the time when the information is uploaded, the information disclosed and other factors, and a judgment shall be made on the basis of whether the information is in a state that the public can obtain before the patent application date. Where the online media subject to authorization is primarily for commercial purposes, it may be presumed to be disclosed to all, except for evidence to the contrary that the online media has not been disclosed or is disclosed only to specific persons.
22. Consideration of invention concept in identification of distinguishing technical features
[（2020）最高法知行终279号] If the concept of the invention lies in the combination of various technical elements, and the prior art neither discloses the teaching of such combination nor discloses the technical effects which can be produced by such combination, when determining the distinguishing technical features of the patent from the nearest existing technology, a plurality of technical elements which are mutually combined can be regarded as a whole and regarded as a distinguishing technical feature.
23. The consideration of “problem raising” in determining inventiveness
[（2020）最高法知行终183号] The creativity of a patent technical solution may come from either “solution of the problem” or “proposition of the problem.” When the difficulty of the progress of the prior art lies in the discovery of the problem, if the “raising of the problem” is not considered to be obvious to the ordinary technician in the field, it may fall into the background causing one to underestimate the inventiveness of the technical scheme.
24. Sources of motivation for improvement of existing technology
[（2019）最高法知行终76号] The motivation for improving the existing technology does not necessarily come from overcoming the closest prior art defect. When the closest existing technology does not have obvious defects, there may still be technical problems that need to be solved, and the motivation for improvement is generated from this.
25. The closest available technology clearly excludes the impact of the differentiated technical features of the application on the judgment of motivation to improve
[（2020）最高法知行终185号] If the technical proposal of the invention and the closest prior art have different technical characteristics, and the prior art clearly excludes the application of the different technical characteristics, it can be determined that ordinary technical personnel in the field lack motivation to carry out corresponding technical improvement on the prior art in the face of the technical problems solved by the different technical characteristics to obtain the technical proposal to be protected.
26. The impact of claim amendments in parallel invalidation procedures
[（2020）最高法知行终93号] In the procedures multiple invalidation request of a same patent right, where the patentee has modified the claims in one of the procedures and such modification is accepted by the China National Intellectual Property Administration (CNIPA), the administrative case for patent confirmation based on the claims before modification is no longer necessary because the examination basis no longer exists. At this time, the people’s court shall revoke the relevant decision on the latter action, but it is not required to order the CNIPA to make a new decision.
27. Overturning the burden of proof that the compound does not have the presumption of novelty
[（2020）最高法知行终97号] Where an existing technical literature has disclosed a patent application or a compound for which a patent is claimed to be protected, the patent application or patent is presumed to be non-novel, unless the patent applicant or patentee is able to provide evidence proving that the compound cannot be prepared before the date of application. At this time, the patent applicant or patentee shall not only prove that the compound cannot be prepared by using the experimental method as stated in the literature of the prior art, but also prove that the compound cannot be prepared by using the conventional experimental method in the technical field to which it belongs and giving full play to the conventional skills of ordinary technicians in the technical field.
28. Should the State Intellectual Property Office submit a Chinese translation when citing foreign documents as comparative documents?
[（2020）最高法知行终500号] Where the China National Intellectual Property Administration quotes any foreign literature as a patent examination comparison document, it is not required to provide any Chinese translation translated by a qualified translation institution.
III. Trial of New Plant Variety Cases
29. Determination of infringement of the act of selling seeds beyond the scale agreed in the production contract
[（2019）最高法知民终953号] The owner of the new plant variety entrusts others to produce the seed variety also clearly limit the scale of production. If the trustee sells seeds that exceed the contractual scale without permission, it constitutes an infringement on the right to new plant varieties.
30. Recognition of the Exception of “Farmers Propagating for Self-use”
[（2019）最高法知民终407] The “exceptions for farmers’ self-breeding and self-use” as prescribed in item (2) of Article 29 of the Seed Law shall at least meet the following two conditions: The subject to application shall be a rural collective economic organization, i.e. a member of a rural collective economic organization that has concluded a rural land contracted management contract with a rural collective economic organization and obtained the right to the contracted management of land; The scope of application shall not exceed the land contracted by the rural contractual household itself.
IV. Trial of trade secret cases
31. Determination of confidentiality measures for trade secrets
[（2020）最高法知民终538号] If the trade secret is carried by products which are circulated on the market, the right holder shall attach a label to the products, unilaterally declare the trade secret and prohibit a third party that is not obligated to maintain confidentiality from dismantling the products, and such acts shall not constitute any confidentiality measure as prescribed in the Anti-unfair Competition Law.
32. Determination of infringement as a business
[（2019）最高法知民终562号] Where a person knows that his act constitutes an infringement, and the act of infringement has been actually committed and the act of infringement is his main business, it may be determined as “infringement for business.”
33. Considerations of serious circumstances when applying punitive damages
[（2019）最高法知民终562号] When judging whether the infringement of trade secrets constitutes “serious circumstances” and punitive damages should be applied, the following can all be considered as factors: whether the accused infringer uses infringement as his business, whether the infringement constitutes a criminal offense, whether there is any obstruction of evidence in the litigation, whether the infringement is damaged or the amount of profits obtained from the infringement, the scale of the infringement, the duration of the infringement, etc.
V. Trial of computer software cases
34. Judgment of infringement of computer software copyright
[（2020）最高法知民终209号] The judgment of computer software copyright infringement should still follow the the standard of “contact plus substantial similarity;” source code comparison is not a prerequisite and necessary link for the judgment of computer software copyright infringement.
35. Determination of the effectiveness of technical measures
[（2020）最高法知民终1206号] “Technical measures for the protection of copyright” as prescribed in the Copyright Law refers to technical measures which are able to effectively prevent infringement under normal use environment and do not require the technical measures to be completely unbreakable or unavoidable.
36. Understanding of staged payment in computer software development contracts
[（2020）最高法知民终1545号] Computer software development contracts have a long performance period with software function requirements dynamically changing with the development process, etc. Accordingly, the computer software development field has a phased, proportional payment business tradition. Since each stage of development is often interdependent and closely linked, whether the payments made by the client at each stage shall only be understood as the consideration of the corresponding work achievements at the stage of development shall be specifically determined according to the terms of the contract and the performance of the contract.
6. Trial of IC layout design cases
37. Determination of the protection scope of the exclusive right of integrated circuit layout design
[（2019）最高法知民终490号] The purpose of registering the layout design of integrated circuits is to determine the protection objects of the layout design, not to disclose the content of the layout design. Therefore, the disclosure of the content of the layout design is not a condition for obtaining the exclusive right of the layout design of integrated circuits.
38. Recognition of the originality of integrated circuit layout design
[（2019）最高法知民终490号] The protection object of the integrated circuit layout design is the original three dimensional configuration of the components and the lines for performing some electronic function. Where a right holder claims that the three dimensional layout of his Layout Design is wholly or partly original, he shall give a reasonable explanation or explanation of his originality, and if the defendant, the tortfeasor, is unable to overturn the explanation the right holder, it shall be determined that the Layout Design is original.
VII. Trial of Antitrust Cases
39. Horizontal monopoly agreement enforcers demand compensation from other implementers for their alleged economic losses
[（2020）最高法知民终1382号] The implementer of a horizontal monopoly agreement has no right to demand compensation from other implementers for the economic losses caused by the implementation of the horizontal monopoly agreement.
40. Conditions for Accepting Civil Monopoly Disputes Arising from Abuse of Administrative Power
[（2020）最高法知民终934号] In a case of monopolistic civil disputes, if the suspected monopolistic conduct committed by the defendant occurs because an administrative organ or an organization authorized by a law or administrative regulation to administer public affairs uses administrative power to restrict transactions or impose requirements on it, and the relevant administrative conduct is not legally determined to constitute an abuse of administrative power to preclude or restrict competition when the plaintiff files a lawsuit, the people’s court may not accept or may dismiss the lawsuit.
VIII. Jurisdiction and other procedural trials
41. The scope of the trial of the jurisdictional opposition procedure and the scope of court transfer
[（2020）最高法知民辖终361号] The scope of trial of a people’s court in the procedure for objection to jurisdiction shall not be limited to the grounds for objection to jurisdiction raised by a party; If the original court which accepts the case has no jurisdiction, the transfer of the case shall not be limited to the court requested by the party that objected to jurisdiction.
42. Application of the principle of constant jurisdiction when new facts appear in the proceedings
[（2020）最高法知民辖终68号] In the case where the original court found that it has no jurisdiction over the case, there is no precondition for the application of the principle of constant jurisdiction. If there are new facts that may make the original court of trial have jurisdiction, the jurisdiction shall be determined based on the new facts.
43. Principle of appropriate linkage in the jurisdiction of foreign-related civil dispute cases
[（2019）最高法知民辖终157号] For a foreign-related civil dispute case filed by a defendant who has no domicile or representative office within the territory of China, whether a Chinese court has jurisdiction shall examine whether the dispute has a proper connection with China. To judge whether a dispute over a standard essential patent license in which the defendant has no domicile or office in China has an appropriate connection with China, consideration may be given to whether the place where the subject matter of license is located, the place where the patent is implemented, the place where the contract is concluded, the place where the contract is performed, etc. is within China. Where any of the aforesaid locations is within the territory of China, the people’s court of China shall consider that the case has an appropriate connection with China, and the Chinese court shall have jurisdiction over the case.
44. Jurisdiction in monopolistic civil disputes involving overseas monopolistic conduct
[（2019）最高法知民辖终32号] Where a party files a lawsuit for any loss incurred within the territory of China from an overseas monopolistic conduct, the place where the result of the alleged overseas monopolistic conduct has the effect of eliminating or restricting competition on the domestic market of China may serve as a link point for case jurisdiction.
45. Considerations for preserving evidence upon application
[（2020）最高法知民终2号] For an application for preservation of evidence, the people’s court shall make a judgment by taking into full account the relevance between the preliminary evidence on which the preservation of evidence is based and the facts of the case to be proved, the necessity and feasibility of preservation of evidence, and other factors. The necessity of evidence preservation may be taken into account such factors as whether the evidence to be preserved upon application is related to the facts of the case, whether the evidence to be preserved upon application is at risk of loss or is hard to obtain later, and whether the applicant has exhausted reasonable and lawful means of evidence collection.
46. Application of affirmative injunctions in disputes involving infringement of patent rights by e-commerce platforms
[（2020）最高法知民终993号] In a dispute over infringement of intellectual property rights on an e-commerce platform, if the respondent of the infringing party files an application for an affirmative injunction and requests the court to order the platform operator to cancel such measures such as deletion, blocking, disconnecting links, and termination of transactions and services, the people’s court shall examine the application. When determining “irreparable damage,” the court may consider whether the failure to take affirmative actions will seriously damage the reputation, goodwill and other rights of the applicant, and will seriously damage the applicant’s market competitive advantage or severely deprive the applicant of business opportunities. Even if the loss can be claimed in monetary terms but is substantial and difficult to calculate, it may be determined that it constitutes “irreparable damage”. The relevant affirmative injunction guarantee may be provided in the form of fixed security deposit plus dynamic security deposit, which may be determined on the basis of the available benefits after the aforesaid measures are canceled.