Shunfang Company v. Dasheng Company and Zhuorui Dasheng Company Case of Utility Model Patent Infringement Dispute Case

——The effect of invalidation procedure to voluntarily waive claims on infringement litigation

First trial case number: (2018) Lu 01 Minchu No. 1230

Second trial case number: (2019) Supreme People’s Court Zhimin Zhong No. 145

【The main takeaway of the trial】

In the administrative procedure of the invalidation of the patent in question, the patent owner voluntarily waives the claim in the case of a patent infringement dispute and is accepted by the China National Intellectual Property Administration, regardless of whether the effectiveness of the administrative decision recording the waiver is finalized, any waived claims shall not be included in the scope of protection of patent rights again in the case of patent infringement disputes, the basis on which the right holder claims the infringement no longer exists, and the relevant litigation request shall be rejected by judgment.

【Case Introduction】

Appellant (Defendant in the original trial): Shandong Yanggu Dasheng Pipe Co., Ltd. (referred to as Dasheng Company)

Appellant (Defendant in the original trial): Shandong Zhuorui Dasheng Pipe Co., Ltd. (referred to as Zhuorui Dasheng Company)

Appellee (plaintiff in the original trial): Shunfang Pipe Industry Co., Ltd. (referred to as Shunfang Company)

The patent in question is a utility model patent with the patent number ZL20122021 ×××× .4 and named “Pipe-frame Plastic Composite Pipe”. Shunfang Company is the patentee and it claims to determine the scope of protection with claims 1-3, and filed a lawsuit with the court of first instance: ordered that Dasheng Company and Zhuorui Dasheng Company immediately stop the infringement of patent rights, and compensate Shunfang Company for economic losses and reasonable expenses of 800,000 yuan, and bear the case acceptance fee.

The original trial of the Intermediate People's Court of Jinan City, Shandong Province held that the technical scheme adopted by the alleged infringing product contains the same technical features as all the technical features described in claims 1-3 of the involved patent, which falls within the protection scope of the involved patent right. The existing technical defense grounds of Dasheng Company and Zhuorui Dasheng Company are not established. The alleged infringing product was a product that infringed the patent right of Shunfang Company. The court of the first instance then ruled: (1) Dasheng Company and Zhuorui Dasheng Company immediately stopped the production and sales of products that infringed Shunfang's patent number ZL20122021 ×××× .4, named “Pipe Frame Plastic Composite Pipe” utility model patent right; (2) Dasheng Company and Zhuorui Dasheng Company shall compensate Shunfang Company for economic losses and reasonable expenses totaling 600,000 yuan within ten days from the date of the judgment effective; (3) Dismiss Shunfang Company's other claims. The first-instance case acceptance fee 11,800 yuan and the property preservation fee 4,520 yuan totaled 16,320 yuan. The Shunfang company bears 3,320 yuan, and the Dasheng company and Zhuorui Dasheng company bear 13,000 yuan. Dasheng Company and Zhuorui Dasheng Company did not accept the judgment of the court of first instance and appealed to the Supreme People's Court.

During the second trial, Dasheng Company and Zhuorui Dasheng Company submitted No. 41399 invalidation request review decision on September 3, 2019, and Shunfang had no objection to its authenticity. China National Intellectual Property Administration on August 21, 2019 made the No. 41399 invalidation request review decision: the patent authorization announcement involved a total of 4 claims. In the invalidation process, Shunfang Company revised the claims. Claims 1 and 2 were deleted and claims 3 and 4 were combined to form a new claim 1. China National Intellectual Property Administration declared all the patent rights in the case invalid on the basis of the revised claim 1.

The second instance of the Supreme People's Court held that, in view of the fact that Shunfang Company only used claims 1-3 as the basis for its claims in this case, in the case where claims 1-3 have been voluntarily waived by it, the basis of the patent protection scope on which Shunfang Company filed the lawsuit ceased to exist, and its lawsuit request could not be established. The Supreme People's Court ruled as follows: 1. Revoke the No. 1230 Civil Judgment of the Intermediate People's Court (2018) of Jinan City, Shandong Province; 2. Dismiss all the claims of Shunfang Company. The first-instance case acceptance fee is 11,800 yuan, and the first-instance property preservation fee is 4,520 yuan, which are borne by Shunfang Company; the second-instance case acceptance fee, 9,800 yuan, is borne by Shunfang Company.

【Typical meaning】

In patent infringement litigation, the people's court shall determine the protection scope of the patent right according to the claims claimed by the right holder. According to the general principles of patent infringement litigation, the rights holder’s claim based on right claims is presumed to be valid in principle, and the people’s court accordingly judges whether the infringed action constituted patent infringement. At the same time, in patent infringement litigation, the defendant often filed a request for invalidation with China National Intellectual Property Administration of the patent in question. Normally, after the defendant filed a request for invalidation, the court will suspend the trial of the infringement dispute, and then continue the trial based on the conclusion of the patent invalidation procedure involved.

In the invalidation procedure, in order to maintain the validity of the patent right, the patentee will choose to modify the claims by giving up part of the claims. In theory, this is the right owner's treatment of his rights. For the claims that have been waived, the right holder has lost the basis for exercising the rights. At the same time, according to the principles of good faith and the prohibition of repentance, the right holder can no longer request that it be included in the scope of patent protection. Therefore, the patentee shall not claim rights based on the waived claims.

The special feature of this case is that after the first-instance court made the first-instance judgment based on the claims of the right holder, and before the second-instance court made the second-instance judgment, the right holder voluntarily waived the claims on which the rights were claimed during the first-instance proceedings in the invalidation procedure of the patent in question. In this case, the court of second instance held that the claim of the right holder could not be established, but it was not sent back to the court of first instance for retrial, but instead directly rejected the claim of the right holder. This approach takes into account both the patent infringement litigation procedure and the patent invalidation procedure, and at the same time does not mix the two procedures, and substantially resolves the dispute.

This analysis is based on the case mentioned in Summary of the Judgment of the Intellectual Property Court of the Supreme People's Court (2019), you can referred to the original article through links below:

Link to the Part I: http://www.chinaiptoday.com/post.html?id=832

Link to the Part II: http://www.chinaiptoday.com/post.html?id=833

Link to the Part III: http://www.chinaiptoday.com/post.html?id=834

Link to the Part IV: http://www.chinaiptoday.com/post.html?id=837