Monday, December 17, 2018

News on Patent Remedies in China

1.  Zhang Guangliang, Tao Jun, Peng Wenyi, Chen Yong, and S. Sam Li have published a very interesting article titled A Study on the Improvement of Remedies for Patent Infringement in China Patents & Trademarks No. 4, 2018, pp. 83-91.  The authors review the general state of the law regarding permanent injunctions (which are normally granted for infringement, though subject to exceptions when an injunction would disserve the public interest, would be difficult to enforce, or "would result in [an] imbalance of interests") and damages (noting, among other things, the prevalence of awards of statutory damages in China).  With regard to injunctions, the authors recommend that the "meaning of the state and public interests" be defined, that courts take into account whether an injunction would be disproportionate (as it might be where the patent in suit "concerns only a tiny and non-essential component of a product" or would have a much greater adverse impact on the defendant), and also take into account the parties' good or bad faith.  With regard to damages, they recommend that courts be authorized to award punitive damages for willful infringement, that evidence-gathering and burden allocation rules be reformed to better enable an accurate calculation of damages (and thus obviate such frequent recourse to statutory damages), and "clarify the application of the technical apportionment" principle, to ensure that damages are awarded based on the contribution of the patent in suit.  

The article does not appear to be available online, but if your institution can get a copy of this publication, the article is worth reading.  (The magazine's general website is here.)

2.  There has been much discussion over the past week over the decision of a court in Fujian to enter a preliminary injunction against Apple in an ongoing patent infringement suit initiated by Qualcomm.  Jacob Schindler's article on the IAM Blog titled Revealed:  The Chinese Patents That Earned Qualcomm an iPhone Injunction goes into some depth concerning the matter, and also has a useful discussion of the rate at which courts in China and in Fujian in particular grant preliminary injunctions in patent cases.  (For previous discussion on this blog, see, e.g., here.)

3. Mark Cohen published a post on the China IPR Blog titled State Council Clears Patent Law Amendments, Forwards to NPC, Patent Linkage Is Not Referenced ….  The post references proposed amendments which, according to Mr. Cohen's rough translation of the draft's description, would among other things "increase the severity of penalties for intellectual property infringement . . . significantly increase the amount of compensation and fines for willful infringement and counterfeiting of patents, and significantly increase the cost of infringement to deter illegal acts," as well as "clarif[y] the burden of proof for the infringer to cooperate in providing relevant information . . . ."


  1. Prof. Cotter, I just saw this blog and wanted to follow up and clarify some of the reasons that folks may be struggling in understanding China's preliminary injunction ("action preservation" or "pre-suit injunctions") practice in patents. First of all, preliminary injunctions are generally not made publicly available because only final decisions of the courts are required to be published. Even if they were made publicly available, the overall case publication rate for all cases hovers around 70% (according to two separate studies - Columbia U/Berkeley/UCSD and Tsinghua); it may be higher in some IP courts - such as Beijing. Because of this limitation it is also hard to determine how many cases are filed or settled. Secondly, the courts have traditionally released aggregated data regarding preliminary injunctions of all types (patent/TM/copyright/trade secret). It is probably safe to assume that in most markets, preliminary injunctions should be more widely available to deal with willful and open trademark and copyright infringements, such as in open markets or trade fairs, rather than in complex patent disputes. However, in fact China rarely grants injunctions of any kinds at, for example, trade fairs (as one example) (I will be writing an article on this I hope soon) - so we really don't know much about the circumstances of granting or the rights being enforced. As Chinese patent litigiation is quite fast (about 7 months to a first instance decision), and damages are ususally low, the need for a preliminary injunction in cases involving substantial corporate parties in order to address "irreparable injury"is probably somewhat lower than in the US. Because cases were traditionally heard by the "case acceptance" division of the courts, the initial question involving a motion for a preliminary injunction was whether the case had been "accepted" (li'an). Once cases were accepted most judicial reports noted that the "grant rate" was high (this typically would include evidence preservation, asset preservation and orders to stop infringing). However, the overall incidence of provisional relief requests or grants in relation to the overall IP docket remained strikingly low. Moroever, due to lack of discovery, one would ordinarily expect that at least evidence preservation orders would be quite common. Thus, we are struggling with an incomplete database, with misleading data, with non-published cases, and general reliance on court-published data which typically does not disaggregate rights or circumstances of preliminary injunction grants and with a general lack of transparency. In my four years of services as the USPTO IP Attache in Beijing (2004-2008), I met with courts throughout China but I was never able to meet with the case acceptance division, despite repeated requests, of any court. I did track statistical reports on preliminary injunctive relief, which was not provided on a consistent year to year basis, and I have written and communicated with indiviuals judges about their practice in this area. I am currently trying to compile additional data on patent preliminary injunctions and injunction grant rates. One data point that applies to all judicial remedies in China, is that the court maintains a separate, non-public database on case enforcement (zhixing). We know little of how remedies are implemented or enforced in China, although the type of complaints that Prof. Zhang and others note in their article are not atypical.

  2. This is very interesting! Thank you.