China’s Supreme People’s Court Clarifies IC Layout Design Rights Standing Requirements

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In case no. (2021)最高法知民终1313号, the Intellectual Property Tribunal of the Supreme People’s Court of China, in an announcement dated November 22, 2021, ruled that a plaintiff lacked standing when its integrated circuit layout design right was invalidated despite appealing the invalidation decision to the Beijing Intellectual Property Court

In the first instance, Tianwei Company claimed that it was the right holder of the exclusive right of integrated circuit layout design with the registration number BS.095006249. After investigation, it was found that Xintiansheng Company sold the products purchased from Zhongwei Aixin Company. The product model is AiP1637, and the chip named “2-wire serial port common anode 8-segment 6-digit LED drive control/8*2-digit keyboard scanning special circuit” copied the layout design of Tianwei Company, so Tianwei sued requesting Xintiansheng Company and Zhongwei Aixin Company stop infringement and compensate for losses.

During the litigation process of the first instance of this case, on February 18, 2021, the China National Intellectual Property Administration (CNIPA) invalidated the integrated circuit layout design registration number BS.095006249.

The court of first instance determined that the exclusive right to protect the layout design of integrated circuits with the registration number BS.095006249 requested by Tianwei Company in this case has been revoked by the CNIPA, and Tianwei Company therefore lost standing and rejected the lawsuit. Tianwei Company filed an appeal with the Supreme People’s Court, arguing that although the IC layout design involved was revoked by the CNIPA, Tianwei Company has filed an administrative lawsuit appealing the invalidation. Further, the Supreme People’s Court on Trial of Patent Infringement Disputes The Interpretation of Several Issues in the Application of Law (2) stipulates that if the claims claimed by the right holder in the patent infringement litigation are invalidated, the people’s court hearing the patent infringement dispute case may rule to reject the right holder’s lawsuit based on the invalid claim, but the regulations are limited to the field of patent disputes. There are no laws, regulations and judicial interpretations for similar provisions in the exclusive right of integrated circuit layout design disputes, so the litigation should not be  suspended.

Although Tianwei Company filed a lawsuit against the administrative decision of the CNIPA within the time limit specified by the law, the basis of its rights is still uncertain. If the invalidation decision is not revoked by a judgment in Tianwei’s favor, the integrated circuit layout design involved  will be regarded as non-existent from the beginning, thus losing the basis of the right to sue.

Secondly, Tianwei Company sued Xintiansheng Company and Zhongwei Aixin Company for infringing on its exclusive right of integrated circuit layout design but under the situation of uncertain rights, if the infringement litigation is suspended, the case may remain unresolved for a long time. 

Finally, the disputes over infringement upon the exclusive rights of IC Layout Design also fall within the scope of disputes over intellectual property rights, and under the circumstance that the exclusive rights of IC Layout Design involved in this case are revoked, the people’s court may rule to dismiss the lawsuit of Tianwei Company by reference to the manner of handling when the patent right is declared invalid in the patent infringement action.

If the administrative decision on revocation of the IC Layout Design in question is subsequently revoked by an effective administrative judgment, and the status of the right in the IC Layout Design Patent in question is clear and stable, Tianwei Company may file a separate lawsuit, which will not seriously impair the lawful rights of Tianwei Company.

Author: Aaron Wininger

Aaron Wininger is a Senior Attorney and Director of China Intellectual Property at Schwegman Lundberg & Woessner.

Author: Aaron Wininger

Aaron Wininger is a Senior Attorney and Director of China Intellectual Property at Schwegman Lundberg & Woessner.