Monday, April 4, 2022

Two Articles of Interest in China Patents & Trademarks No. 1, 2022

China Patents and Trademarks magazine has a couple of articles that may be of interest to readers of this blog.  I hope they may be available on the magazine's website at some point.

The first is by Zhang Weijun, Zhuang Yuqing, and Jia Shiqi, and is titled On the System Arrangement Regarding IP Infringement Penalties-Comments on Application of Punitive Damages (English-language translation at pp. 11-20).  This is an interesting paper, and it goes beyond discussing punitive damages as such by also addressing topics such as whether any damages liability is desirable in cases of innocent infringement, or in cases in which a defendant makes an infringing product but does not sell it (the latter being an issue I too discuss in a forthcoming paper); royalty multipliers (permitted under Chinese IP law and in certain bodies of IP law elsewhere); statutory damages (which are available in China for patent infringement); awards of the infringer's profits; injunctions as providing greater deterrence than damages; and criminal penalties and fines.  As the authors rightly note, "Although each country may not necessarily provide punitive damages due to its jurisprudential logic and legal traditions, different punitive factors undoubtedly have 'hidden' in various legal systems."  The article concludes by discussing punitive damages for IP infringement under Chinese law, which now permits them in all types of IP cases (from one to five times actual damages).  They note the practical difficulties that arise when evidence on actual damages is not readily available, and note that interpretations of the new Patent Act appear to permit courts to use multiplied royalties as the base for punitive damages.  This practice seems like a bit of bootstrapping--or, as the authors put it, "superimposed" punishment.  They disapprove of it.      

The second is by Andy Sun and is titled Can Suppression of Litigation Rights Be a Good Way to Ban Litigation? (English-language translation at pp. 79-90).  The article briefly discusses a 2018 case in which a Chinese court found two defendants liable for "patent extortion."  The case achieved some notoriety at the time, including an article on Patently-O by Yang Yu and Jorge Contreras.  Most of the article, however, focuses on anti- and anti-antisuit injunctions, including an extended discussion of the Chinese cases from 2020 and 2021 and the Munich court's practice, under which seeking (or even not adequately disclaiming an intent to seek) an ASI in another country may render an implementer an unwilling licensee.  I agree with the author that, in general, courts should enter antisuit injunctions only in rare circumstances (he favorably cites Judge Robart's decision to do so in Microsoft v. Motorola as one such circumstance), though I would take issue with a few points made in the article (whether it's a matter of the original or the translation, I don't know).  First, he states that the U.K. Supreme Court in Unwired Planet held that it could grant an antisuit injunction for the patent in that case, but I don't think it did (as I recall, that was an issue that came up in the trial court in one of the joined cases, though at the end of the day no such injunction was entered).  Second, the author discusses three proposals found in the E.U.'s  Group of Experts on Licensing and Valuation of Standard Essential Patents ‘SEPs Expert Group’ - full contribution., specifically proposals 62, 63, and 64 (which would permit, inter alia, enhanced royalties to be assessed against an unwilling licensee and discounted royalties where it is the licensor who is at fault).  He states that the group "recommends" these three proposals, but under the group's voting procedure I'm not sure any of the proposals were, literally, recommended (see p.18 of the report for discussion), though each of these three did earn over three out of five stars.  Third, the author states that in Optis Wireless Technology, LLC v. Apple Inc., Case No. 2:19-cv-00066-JRG (E.D. Texas 2019), the court entered a "holding that the litigation [between these parties] in the United Kingdom was seriously defective and the judgment made should not be completely accepted."  I'm not sure what he is referring to, in particular since the U.K. litigation he references is from 2021.  Perhaps I am misunderstanding something.  

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