Thursday, December 11, 2014

New Book, "Selected Chinese Patent Cases"

A new book that recently came to my attention is Selected Chinese Patent Cases (Dongchuan Luo ed., Haining Song & Seagull Haiyan Song trs., Wolters Kluwer 2014).  Justice Luo is the Chief Judge and President of the Fourth Civil Division of the Supreme People's Court of China.  Mr. Haining Song is a patent attorney based in China, and Dr. Seagull Song is a visiting Associate Professor of Law at Loyola-LA Law School in the U.S.  A full description of the book and the table of contents can be accessed here.  

Of particular interest to readers of this blog are Chapter 19 ("Patentee's Liability for Improper Enforcement of Patent Right") by Judge Yao Bingbing, which discusses a countersuit by Yangzhong City Tongfa Industrial Co. against Yuan Lizhong "for losses caused by the bad faith enforcement of patent right," and Chapter 20 ("Preliminary Injunction Against the Import of a Patented Product") by Judges Sun Hailong and Yao Jianjun, which discusses an action by Ju Li Integrated Chip Design Co. against U.S. SigmaTel Inc. and others.  

In the Yanghzhong case, the owner of a utility model "had clear knowledge that his application was not patentable, but still filed it to get a patent" and "harassed innocent parties in the market."  As a result, the court concluded that the lawsuit was in bad faith and awarded RMB 21,500 to the counterclaimant Yangzhong.  The chapter discusses problems with low-quality patents in China, and states that even if a patent is eventually invalidated, an infringement judgment entered against a defendant usually would not result in the defendant getting its damages back.  (For comparison with certain European countries, see here.)  The chapter goes on to state that, in determining whether a patent owner has committed misuse, a court should consider "various factors, including the abuser's intent, goal and actual damages caused by such abuses" (p.245).  It also recommends the adoption of a requirement that owners of utility models and design patents, which are not subject to rigorous substantive examination prior to grant, file a Pre-Litigation Substantive Examination Report (p.247).

In the Ju Li case, the court set out the factors to be considered in granting a preliminary injunction--that the defendant is infringing or is about to infringe, causing the plaintiff to suffer irreparable harm, and the posting of security.  On the question of infringement, the authors state that "[t]he court shall set a  high standard to determine whether the applicant has proven the likelihood of infringement," albeit in a setting that does not amount to a full trial on the merits (hence the need for adequate security) (p.257).  The authors also list as a fourth element "whether the public interest will be harmed by granting a preliminary injunction," noting however that "there is not much precedent on this point" but that "the court will however make a fact-based analysis to decide this element" (p.258). 

For further discussion on this blog of preliminary injunctions in China, see here, here, here, and here.  

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