Chinese Supreme Court Aims for Higher Efficiency and Greater Predictability in Patent Disputes
· In two high-profile cases, the Supreme Court consolidated the infringement and validity proceedings.
· The courts have been in a turf war with the patent office to obtain powers for courts to review validity in infringement actions.
· The court conducted a common claim construction procedure for both infringement and validity analysis.
In two recent cases, the Intellectual Property Tribunal of the Supreme People's Court ("SPC"), taking advantage of the situation that it was adjudicating both the infringement and validity actions between the parties, conspicuously consolidated the proceedings of the two aspects of the cases. The tribunal's move has drawn attention, largely praise, from the public.
Currently, China has two parallel systems with respect to patent infringement disputes. Civil courts handle infringement actions without the power to review the validity of the patents. Validity actions are centrally handled by the Patent Office (CNIPA) but are subject to judicial review. The separation between the two systems is often blamed for the undesirable protraction of disputes between patent owners and the accused infringers and waste of administrative and judicial resources.
Another issue with the concentration of validity actions under CNIPA is the resultant bottleneck at Beijing Intellectual Property Court ("BIPC"), the first-instance court reviewing CNIPA's invalidation decisions. This bottleneck is caused by the imbalance of the human resources between CNIPA and BIPC and the faster pace of resolutions from CNIPA's administrative proceedings as compared to BIPC's judicial proceedings.
As a potential solution to the above issues, SPC has proposed allowing courts to also review validity of the patent being asserted in an infringement action, thereby resolving their disputes in one action and alleviating the burden on BIPC, against resistance from CNIPA. As in a typical "turf war", SPC's proposal would reduce CNIPA's influence. This struggle between SPC and CNIPA is a major cause to the repeated postponements of the promulgation of the ongoing revisions to the PRC Patent Law. SPC's move in the two recent cases is likely its latest attempt to highlight benefits for its position in a "live" manner.
A major reflection of SPC's consolidation in the two cases was the pretrial session on claim construction for the dual purpose of inventiveness analysis and upcoming infringement analysis. This procedural change illustrates another related position proposed by SPC: in both validity and infringement actions, there should be a stage of claim construction and the rules should be the same in both actions. CNIPA historically has not adopted a distinct claim construction stage in invalidation actions, and the lack of formal claim construction is a cause to the relatively higher unpredictability of invalidation actions. We look forward to further developments that will lend to greater efficiencies to the patent system in China.