UTILITY MODEL PATENT INFRINGEMENT DISPUTE FOR “ELECTROLYSIS TROUGH ELECTROLYSIS BOARD FIXED MOUNTING COMPONENT” ◆ Second Instance Docket: (2017) Su05MinZhong No. 4612 CASE 11 :
Jiangsu Province
[Headnotes] The main objective of judicial protection of intellectual properties is to maintain a market environment for “respecting knowledge, revering innovation, and maintaining honesty and law.” A party to technical cooperation during which it learned of the subject matter, uses it dishonestly without permission in its production after patent application was filed, even though before the issuance date, shall be denounced for infringement, and shall be accordingly responsible for civil liabilities.
[Synopsis] Plaintiff: Jiangsu LvChen Environment Technology Co., Ltd.
(LvChen) Defendant: Jiangsu ShiChuang E n v i r o n m e n t T e c h n o l o g y Development Co., Ltd. (ShiChuang) LvChen is a tech environmental business specialized in recovering electrolytic copper from industrial effluent. In 2014, ShiChuang and LvChen entered into agreement for cooperation on the micro-etch project of a NanYa Circuit Board (Kun Shan) Co., Ltd., by which LvChen was to provide two complete sets of microetch effluent electrolytic systems, including value, workability, cost, and technology, in the amount of 2.8 million Yuan, the system to be operated and maintained by LvChen. After signing of the agreement, the parties started to work.
On March 2, 2015, LvChen filed a patent application for utility model patent covering “Electrolysis Trough Electrolysis Board Fixed Mounting Component” of the above system. Patent was issued on July 29, 2015. On June 4, 2015, ShiChuang suddenly called off the agreement, as it copied the LvChen equipment and made one of its own, starting to use it in July 2015. LvChen believed that ShiChuang, with full knowledge of that the equipment was patented, copied it without permission to make huge illegal gains, to the detriment of LvChen. It then filed suit seeking injunction and damages of 1.953 million Yuan. The LvChen patent was issued by the State Intellectual Property Office,
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which is valid, and legally protected. Upon comparison, the accused device falls within the protective range of the patent. The only dispute is whether the device, being made prior to the date of issuance, but after the date of filing, and being made during the parties’ cooperation, constitutes infringement. The court believes that good faith is a basic principle that everyone should follow in conducting civil activities. This principle is specified in General Provisions and General Principles of the Civil Law, the Law of Contract, and the Law of Anti-Unfair Competition. From the perspective of encouraging innovation and balancing the interest between patentee and the public, either in Supreme Court decisions or in statutory law, the primary condition to noninfringement defense is it is available only to a competitor in society, but one in privity or a partner to whom the technology is disclosed is not included; moreover, defendant must acquire the technology through a lawful channel, by independent research or legitimate means. In
this case, when defining the rights of LvChen and ShiChuang, it has to be taken into consideration of ShiChuang’s unique position and its mental condition, and when balancing their interests, the weight shall be placed, not on patentee and the public, instead on protecting the innovator, the honest work, and good faith business operator. ShiChuang, by being exposed to the LvChen equipment and becoming aware of the subject matter of its technology, should have under honesty and good faith principles, maintain the confidentiality and refrain, without consent or permission by LvChen, from disclosing the technology obtained during cooperation to any third parties. ShiChuang claims to have made a machine all by itself on July 22, 2015 for its own business, yet it could not provide any evidence to show where it legitimately got the technology. Accordingly, the court would, with ample reason, believe that ShiChuang obtained the technology from LvChen, which is in clear violation of the good faith principle, and of the basic
obligations under contract, and therefore is infringement of the patent. In the end, the court ordered injunction and assessed damages plus reasonable cost in the amount of 1 million Yuan.
[Judge’s Comment] This case is a typical example of court providing clear predictability of the law to the public through judicial decisions. The court takes the position of keeping “the main objective of judicial protection of intellectual properties is to maintain a market environment for “respecting knowledge, revering innovation, and maintaining honesty and law.” When a partner, being exposed to the other side’s equipment and technology during cooperation, uses the technology in violation of good faith principle to make a new machine for its business operation, which, despite being done before the issuance date of the utility patent but after the filing date, should be denounced as patent infringement for which civil liabilities must follow.
DESIGN PATENT DISPUTE FOR “TABLEWARE (OVERLAY)” ◆ First Instance Docket: (2017) Zhe02MinChu No. 440 CASE 12 :
Zhejiang Province
[Headnotes] For design patent, even though the combined pieces in a set share a single application number, each piece in the set may have its own separate claim. Therefore, when application is filed for the design of a set of multiple pieces, it must meet, apart from the conditions for the combined application, the patentability requirement for each individual piece. Correspondingly, in patent infringement litigation, the court, when comparing the accused
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set with prior art design, it should also make independent comparison between each individual piece of the accused set with the corresponding design, rather than comparing the set as a whole with the prior art design.
[Synopsis] Plaintiff: Stor Sociedad Limitada (Stor) Defendants: Ninbo YaTang Daily Necessities Co., Ltd. (YaTang); Taizhou Luqiao WangHong Modes and Plastics Factory (WangHong) Stor filed an application on May 18, 2015 for a design of “Tableware (Overlay)” to be published for approval on September 23, 2015, under No. ZL201530147586.X. Stor believes that YaTang and WangHong jointly developed the modes for the accused product, to be made by WangHong and sold by YaTang, infringing its patent and therefore files suit in court seeking injunction and damages of 150,000 plus cost of 43,974.2 yuan. At trial WangHong submitted three references
to show that the accused design was prior art design, for bowl, plate and cup, each carries a date before the filing date of the patent. Stor contends that the prior art design should not be compared with the accused design piece by piece; rather, comparison ought to be made with each prior art design for the entire set of the accused design. Ninbo Intermediate People’s Court found at trial that the accused design on the whole was similar to the prior art design. Meanwhile, the average consumer is more inclined to focus on the overall configuration and surface patterns on bowls and plates. So the overall configuration and surface pattern deliver greater impact for the visual effect. The accused concentric circle design is mainly a functional aspect for stability of overlay at the bottoms of the plates and bowls, and are merely some minute variations in structure and strokes on visual, without substantial impact on the overall visual effect. Thus, WangHong’s defense is sustained, and no infringement on the part of YaTang and WangHong was found. In sum, the court dismissed Stor’s complaints.
[Judge’s Comment] The central issues of this case are:
(1) whether the accused design is covered by the protective range of the design patent; (2) whether defendant WangHong’s argument is sustainable and whether the two defendants infringed the patent. As to the first issue, the protective range of a design patent is represented in the configuration or photograph included in the design patent document. Determination of infringement of a design patent is made from the perspective of an ordinary consumer with his level or knowledge or cognizance, by the patent appearance, the characteristics, and the overall visual effect, to make a comprehensive judgment and a comparison of the accused design and the patent for similarity of visual effect or insubstantial disparity. In this case, both the patented design and the accused design are for tableware, and are similar products. On comparison, they both contain the parts of bowl, plate, and cup which are basically the same in shape, and can be overlaid. Their differences are the inclination degrees, the number concentric circles and the contours which are merely minute differences, and all in all produce no substantial visual difference to an ordinary consumer. Therefore the accused design falls
within the protective range of the design patent. On the second issue, according to Patent Examining Guidelines, design patent application for a set of products may not include one or more similar to another. Any one piece in the set must jointly and severally satisfy patentability requirement; if a particular piece does not, it should be deleted from the set, or the application shall not be granted. In this case, the accused design is for a set, and if for patent application, each piece of the set must separately patentable. Hence, to determine whether the accused design adopts the prior art, each individual piece must be compared with the corresponding one in the references, i.e., in separate comparison. Upon such comparison, the bowl, plate and cup in the accused design have so minute differences from the prior art, as to produce no substantial impact on visual effect. Therefore, the defendants’ conduct is not infringement of plaintiff’s design patent. The decision of this case clarifies the rules for making comparison in defense of prior art for a set of products, comfortably in line with the present prior art defense to patent infringement, so as to achieve the purpose of substantially resolve civil disputes.
PATENT INVALIDITY ADMINISTRATIVE PROCEEDINGS BETWEEN NOVARTIS AND PATENT REEXAMINATION BOARD ◆ First Instance Docket: (2016) Jing73XingChu No. 985 CASE 13 :
City of Beijing
[Headnotes] Evidence in patent invalidity proceedings. The examining authority may refer to relevant provisions of the judicial proceedings, taking into
consideration the evidence of record and probability of fact to be proven, balancing the weight of evidence adduced by parties, to admit more credible evidence.
[Synopsis] Plaintiff: Novartis Holdings Inc. (Novartis) Defendant: State Intellectual Property Office, Patent Reexamination Board
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(PRB, or the Board) Third Party: Hanson Pharma (Hanson) Novartis is a joint patentee of the invention patent for “Treatment of Gastrointestinal Stromal Tumors” (“the patent”), the inventive point of which is the discovery of new use of imatinib mestylate in treating diseases of gastrointestinal stromal tumors. The patent claims are drafted in “Swiss-type” method. Upon request by Hanson, the Board made the decision at issue, finding lack of inventiveness of the patent, and invalidating all the claims. Novartis, dissatisfied, filed suit in Beijing Intellectual Property Court, demanding a remand. Upon examination the court sustained the decision for lack of inventiveness, found the Board’s invalidity proceedings consistent with the law, and dismissed plaintiff’s complaints.
[Judge’s Comment] The so-called “Swiss-type” claim is an exception to the general principle under Chinese Patent Law that medical treatment may not be patented, for the purpose of giving some room and incentive to the necessary protection of creative medical uses, and balancing the interests of both the public and proprietors. Because this case relates to the manufacture and sale of the medicine for treatment of gastrointestinal stromal tumor, and also involves determination of the publication date for references, as well as determination of inventiveness for new medical uses, it attracts wide
attention in society. According to the Patent Law and relevant provisions, “inventiveness” means prominent substantive character and notable progress in light over prior art, i.e., on the basis of ascertaining the differences between the patented invention and the prior art, according to the technical problem for the subject matter, to determine whether the subject matter as whole is obvious or not to a person having ordinary skill in the art. In examining inventions in the chemical field, it has to be taken into consideration, apart from ordinary determination, the unique aspect of such inventions. The court in this case is of opinion: (1) it would be insufficient to claim results from merely in vitro test or animal test; it must reach the level of human treatment, which does not necessarily mean it must achieve absolute clinical result; instead, it would be, as long as a person having ordinary skill in the art (PHOSITA) could have reasonable expectation of success on the drug. (2) Due to complexity of the oncological drug research, a PHOSITA might easily be interested to any positive data, and try on it for any useful purpose. Therefore, even if the prior art does not disclose specific test type and test data, but a PHOSITA may, based on the level of skill and the prior art, when motivated by the information disclosed by the prior art to use a particular compound for treatment of such patient, form reasonable expectation on its success, it may be said that the prior art has disclosed the subject matter of the invention.
As for claim 1 of the patent, its effect on gastrointestinal stromal tumor (GIST) should be more than in vitro test or animal test. It must reach in vivo level for GIST. The PRB interpretation of claim 1 is correct, but “in vivo level on GIST patient” does not mean absolute success on clinical test phase; it only means that a PHOSITA may have reasonable expectation of the success. Novartis contends that the rate of success for tumor drug research is very low, but the demand for the drug is tremendous. Under such circumstances, a PHOSITA would be motivated to try even with extremely low expectation of success. But such generalized motivation not based on any technical teaching, is not “the motivation in patent sense” which, in the absence of any scientific, empirical (as with test data), would produce reasonable expectation for success. On this the court disagreed that precisely because of the complexity of the research for oncological drugs, a PHOSITA would pay great attention to any positive information, and would try on it. Thus, although reference 1 did not disclose any test type and test data, but a PHOSITA admittedly, based on his knowledge and reference 1 disclosure, would come up with the patented subject matter without creative effort. This case clarifies the interpretational rule for “Swiss-type claims” and the standard for determining inventiveness for second medical use of drugs, being relatively useful as a guidance for future cases.
PATENT INVALIDITY CASE OF HEWLETTPACKARD INVENTION PATENT. ◆ First Instance Docket: (2016) Jing73XingChu No. 2757 ◆ Second Instance Docket: (2017) JingXingZhong No. 2673 CASE 14 :
City of Beijing
[Headnotes] Interpretation of a claim term is not unique to patent infringement proceedings, nor conditioned for ambiguous claim or lack of unequivocal meaning. In estimating inventiveness of a patent, it is also necessary to conduct claim interpretation to ascertain the protection scope, and on that basis to determine whether it has been taught by the prior art. Moreover, claim interpretation must be done by the standard of level of knowledge and technical ability of a person having ordinary skill in the art (PHOSITA), taking the claim and the written description if necessary to ascertain the scope of protection under the claim.
[Synopsis] Appellant (Defendant below): State Intellectual Property Office, Patent Reexamination Board (PRB, or the Board) Appellant (Third party below): Bao Hongwei Appellee (Plaintiff below): HewlettPackard Development Co. (HP) This case relates to an invention patent for “Ink Jet Print Head Having Ground Bus That Overlaps Transistor Active Regions” (the Patent) Bao Hongwei petitioned the PRB for invalidation of the Patent on February 26, 2015, on the grounds that claims 1-8 of the Patent lack inventiveness, in violation of Patent Law provision in Article 22(3). Therefore, all claims of the Patent should be invalidated, for which he provided evidence. Upon examination, the Board found: claim 1 of the Patent, in light of combined references 2-1 and 2-3, lacks prominent substantive character and notable progress, and therefore does not have inventiveness, in violation of Patent Law provision in Article 22(3). It issued Decision No. 27391 for invalidity (the “Decision”), invalidating all the claims. HP is not satisfied with the Decision and filed suit for review of the administrative proceedings, claiming: (1) The Decision’s interpretation of the “Active Region” and the finding of fact for reference 2-3 is inaccurate; and (2)
claims 1-8, in light of the combination of references 2-1 and 2-3, and common sense, do have inventiveness, in conformity with Patent Law provision in Article 22(3). In sum, HP requests that the court vacate the Decision and remand for a new one. The PRB argues: the Decision made a proper finding of fact, and proper application of law, with proper procedure and conclusion. It therefore requests the court dismiss plaintiff’s complaint, so does the third party. Beijing Intellectual Property Court found: a PHOSITA, on the premises that he understands the working principles of field effect transistor, combined with relevant information recorded in the patent specification, will recognize that claim 1, in light of the combination of reference 2-1 and 2-3, has prominent substantive character and notable progress, and possesses the inventiveness required under Article 22(3) of the Patent Law. The recited claims 2-8 depending from claim 1 also have inventiveness. Based on this, the court vacated the Board’s decision and remanded the case for a new decision. The Board and Bao Hongwei, both dissatisfied, appealed to Beijing High People’s Court, which dismissed the appeal.
[Judge’s Comment] The key issue of this case is how to interpret “Active Region” as used in the claim of the patent. Only when this patentee-coined phrase is properly interpreted can further determination be made as to whether prior art teaches on the relevant technology. Since HP introduces in claim 1 the concept of “Active Region” which has no ordinary definition, and claim 1 is distinguished from reference 2-1 in the ground bus that overlaps transistor active region. Therefore, to determine whether the prior art teaches on the patent, it has to be first understood what “Active Region” means in claim 1 to define its protective scope. The subject matter of a patent claim is an intangible thing which can only be portrayed in words, and words
that is all a patent can use to define its protective scope. When a claim is expressed in limited language, it needs to be interpreted, which is claim interpretation. Thus claim interpretation is indispensable for determining patent protective range. In the patent claim, in particular, the patentee, in order to describe the subject matter concisely and clearly, would coin certain technical terms which do not have ordinary interpretation in the relevant field. In such circumstances, it is more necessary to interpret such terms from the perspective of a PHOSITA so as to correctly understand the claimed subject matter to ascertain the protective scope of the patent. As to the problem of claim interpretation in patent administrative proceedings, in most cases, the basic rule is maximum interpretation rule in the patent prosecution process, i.e., the most expansive reasonable interpretation on basis of literal language of the claim, in combination with the written description. When the written description does not give specific definition of a claim term, the ordinary meaning should be the interpretation made by a PHOSITA upon reading the claim, written description and the drawings. Reading improper limitations from written description or prosecution history into the claim terms must be avoided to reach a better conclusion of patentability and the effect of the claims, to prompt amendment and improvement of the patent specification, for better quality of the issued patents. It can be seen that claim term interpretation is not limited to patent infringement proceedings, nor is it premised on ambiguity or equivocality of claim terms; it can be necessary, in evaluating patent inventiveness, to conduct claim interpretation to ascertain scope of protection, and on that basis, to determine whether the prior art teaches on the invention. Moreover, such claim interpretation must be made by the PHOSITA standard, in combination with claim language and the written description to define the protective scope.
IN RE PATENT APPLICATION OF CELGENE CORP. ◆ First Instance Docket: (2015) JingZhiXingChuZi No. 2069 ◆ Second Instance Docket: (2017) JingXingZhong No. 1642 CASE 15 :
City of Beijing
[Headnotes] Supplemental embodiments and test data that an applicant submits after filing date should be examined to evaluate the weight of such evidence in a particular case for the facts to be proven. The additional embodiments and test data may be used to further prove what has been disclosed in the written description, rather than to add new contents. Otherwise it would be akin to allowing the applicant to complete his invention he did not finish before the filing date, and giving patent to an invention that was not completed before the filing date is contrary to the first filing principle.
[Synopsis] Appellant (Plaintiff below): Celgene Corp. Appellee (Defendant below): State Intellectual Property Office, Patent Reexamination Board (PRB, or the Board) Celgene is applicant for patent on “5-substituted quinazolinone derivatives as anti-cancer agents” which cover a new compound to be used for treatment of cancer and many other symptoms. On May 30, 2012, the State Intellectual Property Office (SIPO) issued a final rejection on the application on basis of Patent Law, Article 26(3). The PRB on July 3, 2014 rendered a decision on review under No. 73780 (the “Decision”) sustaining the SIPO rejection. Dissatisfied, Celgene filed a judicial review proceeding with Beijing
Intellectual Property Court, alleging: the specification has clearly indicated the specific method of composition and structural verification data of the claimed compound, and described in detail the use and effect, as well as determinant active data. Meanwhile, Celgene in its response to the first Office Action submitted the quantitative test data. Thus, the application is in line with Patent Law, Article 26(3), and the Decision is erroneous. Beijing Intellectual Property Court upon examination found that since both parties agree that the written description has sufficiently disclosed how to identify and prepare the compound, then the key to full disclosure of the claimed compound is its use and/or effect. The specification did not disclose any qualitative or quantitative active data of the claimed compound, the technical effect of which is merely a research plan of Celgene without result. Meanwhile, it is insufficient that the inventor discloses in the specification a test method publicly known in the field; he must also disclose the test data through these methods to verify the effect and use of the new compound, and only by then can the invention be completed. This is dictated by the fundamental requirements for first filing and the doctrine of quid pro quo. In the absence of test data, the specification cannot be said to have fully disclosed the effect and use of the new compound by indicating multiple publicly known methods of
active testing of the compound. Based on the test data from Celgene, Beijing Intellectual Property Court found that the Board made a statement on page 7 of the Decision on the Celgene’s supplemental test data. Thus, it cannot be said that the Board paid no attention of the test data, but conducted examination in this case, which is not unfair. Secondly, the specification did not indicate any test data to show the effect and use of the compound, nor could a person of ordinary skill have practiced the invention by combining his knowledge on the date of application with prior art to recognize the effect and use, i.e., unable to practice the invention by what is disclosed in the specification. Thus, even though Celgene in response to first office action submitted supplemental test data, such data is insufficient to prove that Celgene has completed the subject matter of the invention by the application filing date with sufficient disclosure, which is a fact of insufficient disclosure. For this reason, Beijing Intellectual Property Court dismissed Celgene’s complaint. Celgene is dissatisfied and appeals to Beijing High People’s Court which denied the appeal and affirmed.
[Judge’s Comment] I. On the Disclosure in the Specification Biopharmaceutical applicants usually have reservation on test data when they file for patent applications, which lead to many
problems with test data for judicial practice, especially in prosecution and invalidation of chemical compounds. Whether supplemental test data is sufficient for complete disclosure for purposes of patent application is a major problem. This application intends to cover a new compound, for which there is no evidence to show a similar or analogous active compound in the prior art, and person of ordinary skill is thus unable to determine that the subject matter will produce the expected result. For this reason, the subject matter must rely on test result, and Celgene is obligated to disclose such test data in the specification. In this case, the specification did not indicate the use and effect and the qualitative or quantitative act data of the claimed compound.
Although the specification indicated multiple publicly known test methods, but did not indicate any data by such methods to prove the use and effect of the compound. Therefore, the specification cannot be said to have made full disclosure in patent sense. II. About Supplemental Test Data As to supplemental test data, the Patent Office and courts in current practices do not absolutely preclude, e.g., embodiments or test data, but will take them on case-by-case basis for examination to see if they could be used to prove certain facts. Meanwhile the first filing principle dictates that the embodiments and test data may not change the facts established by the patent specification on the filing date. In other words, the supplemental embodiments and test data may support what is in the
specification, but may not add new contents, or it will be adding new matter to the application that has not been completed on the filing date. And conferring patent to an invention which has not been completed on the filing is contrary to the first filing principle. In the case at hand, the PRB did take the Celgene supplemental test data into consideration, but the specification fails to indicate any test data for the effect and use of the claimed compound; nor can a person of ordinary skill, on the date of application, by his knowledge and cognizance, in combination with prior art, practice the invention by referring to the specification. Therefore, the supplemental test date submitted by Celgene fails to prove that the specification has achieve sufficient disclosure in patent sense.
