InsummaryDamagesawardsarekeyissuesthatrightholderscareabout,especiallyafterChinesecourtshaveimplementedpunitivedamagessince2013.Recently,therehavebeensomemajorcasesinChinathathavegrantedaveryhighnumberofdamagesawards.ThisarticlemainlyintroducessometypicalcasesinthepastyearandtheChineselawsandregulationsondamagesawardsandpunitivedamages,whicharehelpfulforrightsholderstocollectevidenceandclaimpunitivedamagesinatrademarkinfringementcivillawsuit.DiscussionpointsRecenttrademarkinfringementcasesinChinawithhighdamagesawardsMethodsofcalculatingbenefitsobtainedbytheinfringersintrademarkinfringementcasesConsiderationsofChinesecourtsondamagesawardsApplicationofpunitivedamagesEvidencecollectiontoprovedamagesinpracticeReferencedinthisarticleChineseTrademarkLawSupremePeople'sCourtInterpretationontheApplicationofPunitiveDamagesinCivilCasesofIntellectualPropertyInfringementSupremePeople'sCourtProvisionsonSeveralIssuesConcerningEvidenceinCivilLitigationofIntellectualPropertyRightsChateauLafitePanPanSiemensArticle63oftheChineseTrademarkLawstipulatesthefollowingwaystocalculatedamages:theactuallossessufferedbytherightsholder,thebenefitsgainedbytheinfringersduetotheinfringementandareasonablemultipleofthetrademarklicensingfee.Theabovecalculationmethodsshouldbeappliedinorderandaresubjecttofivetimesofpunitivedamagesatmostiftheinfringementissevereandofbadfaith.Ifallmethodsarenotabletodeterminethedamages,thecourtshallawardcompensationbydiscretionintherangeofunder5millionyuan(statutorydamages).[1]Inpractice,statutorydamagesaremostlyapplied.After2019,punitivedamageshaveincreasinglybeenappliedbythecourts.Whencalculatingdamages,themostcommonlyapplicablemethodiscalculatingthebenefitsgainedbytheinfringers.Inthepastyear,therewereseveralhighdamagesawardscasesinChina,andtheyapplieddifferentmethodstocalculatethedamagesamounts,whichdemonstratesthecurrentjudicialtrendtowardspunishinganddeterringinfringers.Belowarethreetypicalcases,whichwerelistedinthenationaltop10ofintellectualpropertycasesorthelocaltop10ofintellectualpropertycases.ChateauLafitecaseTheplaintiffwasthetrademarkholderof‘LAFITE’and‘CHATEAULAFITEROTHSCHILD’forwine.[2]Theinfringersregisteredandusedthetrademarks‘CHATEAULAFITEinChinese’and‘LAFEIMANOR’forwine.TheCourtdecidedthatbothmarksweresimilartotheplaintiff’smarksandsuchuseconstitutedtrademarkinfringement.Asforthedamagesawards,theplaintiffclaimedtocalculatethembasedonthebenefitsgainedbytheinfringers,namely,salesvolumetimesprofitrate,andclaimedpunitivedamages.TheCourtthoroughlyexaminedalltheevidencesubmittedbyeachpartyandmadethefollowingcalculation.First,basedonthesalesinvoicesandcustomsdeclarationformsofimportingwine,theCourtcalculatedthewholesalesvolumeoftheinfringinggoods.Second,theCourtneededtocalculatetheprofitratebycomparingtheinfringinggoods’sellingpriceandcostprice.Astheinfringinggoodsweresoldindifferentunits,suchasbottle,boxandset,etc,theCourtdecidedtocalculatethesameperbottle,whichistheminimumsellingunit,bydividingthewholesalesvolumeandnumberofsoldbottlesextractedfrominvoices.ThecostpriceofinfringinggoodswascalculatedbasedonthecustomsdeclarationformsasthewinewasimportedtoChina.Pursuanttothepriceofeachlitreofimportedwineandthefactthateachbottleofwinecontains0.75litre,theCourtwasabletocalculatethecostpriceperbottle.Therefore,theprofitrateequalledto:(Sellingpriceperbottle–costpriceperbottle)SellingpriceperbottleThebenefitstheinfringersgainedcouldthenbecalculatedaccordingly.Finally,asfortheclaimofpunitivedamages,theCourtconsideredthehighreputationofLAFITE,theextensivesalesscalesoftheinfringersandthemisleadingadvertisingoftakingafreerideonLAFITE’sreputation,andgrantedtwotimesthepunitivedamages.PanPancaseTheplaintiffwasthetrademarkholderof‘PanPan’,whichisareputablebrandofsecuritydoorsinChina,anditshouselogoisapanda.[3]Theinfringersregisteredacompanywiththetradename‘XinPanPan’engaginginthesamebusinessofconstructionmaterials,includingsecuritydoorsandwindows.Theinfringersalsoprominentlyused‘XinPanPan’asatrademarkextensively,includinginthedomainname,website,WeChataccount,app,advertisingbrochuresandofflineshops.TheCourtdecidedthatbothparties’marksweresimilarandwereusedonsimilargoods.Theinfringers’behavioureasilycausedconfusionandconstitutedtrademarkinfringement.Inthiscase,theplaintiffwasnotabletocollecttheinfringers’salesdata,andtheinfringersstatedtherewerenoproperfinancialdocumentstocalculatetheirprofitsduringtheinfringingperiod(2017–2019).Underthiscircumstance,althoughtheevidencesubmittedbytheplaintiffwasnotverysufficientoraccurate,itcouldbeusedasvalidevidenceoftheinfringers’profits.Theevidencesubmittedbytheplaintiffmainlyincludedadvertisingmaterialin2018inwhichtheinfringersdeclaredtheywouldreachonebillionyuaninproductionvalueanda50percentgrowthrateperyearinthenextfiveyears.Basedontheaforesaidstatistics,theCourtwasabletofigureoutthetotalsalesvolumefrom2017to2019tobe361millionyuan.Asfortheprofitrate,theCourtadoptedanationalaverageprofitrateof7.5percentinthefurnituremanufacturingindustryin2017.Therefore,theprofitgainedfromtheinfringementwas27.075millionyuan(361times7.5percent).TheCourtgrantedfourtimesthepunitivedamagesinthiscase,duetothefollowingconsiderations:thelegalrepresentativeoftheinfringershadbusinessrelationshipwiththeplaintiffandshouldhaveknownabout‘PanPan’trademark;theinfringersnotonlyplagiarisedthe‘PanPan’mark,butalsousedasimilarpandalogo;theinfringerssometimesomittedthe‘Xin’characteranddirectlyused‘PanPan’;evenafterthe‘XinPanPan’markwasinvalidated,theinfringersstillcontinuedtheinfringement;andtheinfringers’businessexpandedto12provincesand180distributorsandnearly100offlineshops.Thedamagesawardsweredeterminedtobe108.3millionyuan(27.075times4)andmorethantheplaintiff’sclaimof95millionyuan.Therefore,theplaintiff’sclaimwasfullysupportedbythecourt.SiemenscaseSiemensisafamousbrandofhouseholdelectricappliance.Theinfringersused‘ShanghaiSiemensElectricsCo,Ltd’(ashellcompanyregisteredinSeychelles)onitswashingmachines.TheCourtdecidedtheabovecompanynamewasusedasatrademarkwiththefunctionofidentifyingthesourceand‘Siemens’wasthedistinctivepart,whichwasidenticalwiththeplaintiff’smark.Suchbehaviourconstitutedtrademarkinfringementandtheuseof‘Siemens’astradenameconstitutedunfaircompetition.[4]Theplaintiffclaimeddamagesawardsof100millionyuanbasedontheinfringers’benefitsduetotheinfringement.[5]However,theplaintifffailedtosubmitfinancialinformationoftheinfringerstoprovethis.TheCourtdemandedtheinfringerssubmittheiraccountbookstoascertainthefacts,buttheinfringersdidnotcooperate.TheCourtthusconsideredthefollowingpointstodeterminethedamages:SiemenswasanenterpriseintheFortuneGlobal500anditstrademarkhadacquiredahighreputation.TheinfringersobviouslyactedinbadfaithastheyshouldhaveknownaboutSiemens,andtheyalsoplagiarisedotherbrands,suchasPhilipsandAOSmith.Thescaleofinfringementwasextensive,consideringtheplaintiffdiscoveredinfringingwashingmachinesinmanyprovinces,andtheinfringersclaimedtohavemorethan1500distributors,withsalesvolumesof1.5billionyuanperyear,andtheirbusinesslastedforaroundfiveyears.Referringtotheannualreportsofotherpeeroperatorsintheindustryofwashingmachines,theCourtadmittedanaverageprofitrateof35percent.Outofthetotalsalesvolumeof1.5billionyuanforallwashingmachines,theCourtdecided1/15ofthemwerebrandedwithaninfringingmarkbydiscretion.Hence,theinfringers’benefitswouldbe1.5billiontimes1/15times35%times5,namely,175millionyuan,whichwasbeyondtheplaintiff’sclaim.Basedontheabove,theplaintiff’sclaimof100millionyuanshouldbefullysupported.CalculationofbenefitsobtainedbyinfringersDamagesawardsareanimportantpartofincreasingthedeterrenceofcivilaction.Ifinfringerscouldmakemoreprofitsthandamagesawards,civilactionwouldcertainlynotbeabletostopinfringement.Ontheotherhand,ChineselawsfollowthePrincipleofIndemnitythatdamagesawardsshouldcovertherightholders’lossesbutshouldnotbemore,topreventmaliciouslawsuits.Inpractice,ithasalwaysbeenachallengeforrightholderstocollectsufficientevidencetoaccuratelycalculateinfringers’benefits,andthecourtisusuallyinclinedtodecidedamagesawardsbydiscretion,whichiseasierwithoutmanycalculations.Theabovethreecasessharethefollowingcommonpointsthatallowthecourttodetermineveryhighdamagesawards:therightholdershadsomebasicevidencetoprovetheinfringers’benefits,suchasinvoices,customsdeclarationforms,statementsfromtheinfringersinsomeadvertisingmaterials;andthebenefitswereclearlymuchmorethanthestatutoryamount(5millionyuan).Undersuchcircumstances,itwouldbeunconscionabletodecidethedamagesawardsundertherangeof5millionyuan.Thereisanotherproductivewayforrightholderstoclaimdamagesbyrequiringinfringerstoprovidefinancialstatistics.TheChineseTrademarkLawstipulatesthat:Inordertodeterminetheamountofdamages,whentherightholdershavemadeeveryefforttoprovideevidence,andtheaccountbooksandmaterialsrelatedtotheinfringementaremainlyinthepossessionoftheinfringers,thecourtmayordertheinfringerstoprovidesuchaccountbooksandmaterialsrelatedtotheinfringement;iftheinfringersdonotprovidethesameorprovidefalseaccountsandmaterials,thecourtmayrefertotherightsholders’claimsandprovidedevidencetodeterminetheamountofdamages.[6]Furthermore,theSupremePeople'sCourtProvisionsonSeveralIssuesConcerningEvidenceinCivilLitigationofIntellectualPropertyRightsstipulatesthat:Thecourt,inaccordancewiththelaw,requiresthepartiestosubmitrelevantevidence.Ifapartyrefusestosubmitwithoutjustifiablereasons,submitsfalseevidence,destroysevidence,orengagesinotheractsthatrendertheevidenceunusable,thecourtmaypresumethattheclaimsoftheotherpartyconcerningthematterstobeprovedbysuchevidenceareestablished.[7]TheabovelawsandregulationsbasicallyformthesystemofproofimpairmentinChinaandareveryhelpfulforrightholderstoreducetheirliabilityofproof.Withtheabovesupport,therightholdersfirstcollectsomebasicevidenceoftheinfringers’profits,suchas:salesdatadisplayedone-commerceplatforms;theinfringers’self-admissionatsomeeventorinadvertisingmaterials(especiallyTikTokvideosandLittleRedBookposts);andtheaveragerateofprofitintheindustry.Basedonthisevidence,therightholdersfurtherfilearequestwiththecourtforaccountbooksandmaterialsrelatedtotheinfringementfromtheinfringers.Iftheinfringersdonotcooperatewiththecourt’sorder,theyshallbearthenegativeconsequences,andtherightholders’evidenceandcalculationswillbeverylikelytobeadmittedbythecourt.PunitivedamagesPunitivedamagesarearelativelynewsysteminChina.[8]Theyarepredicatedontheplaintiff'srequest,andthecourtmustnotapplypunitivedamagesonitsowninitiative.Punitivedamagesmustbeclaimedbeforetheconclusionofthecourtdebateinthefirstinstance.Applyingpunitivedamagesrequirestwopreconditions:theinfringementissevereandinbadfaith(intentional).TheSupremePeople'sCourtInterpretationontheApplicationofPunitiveDamagesinCivilCasesofIntellectualPropertyInfringement(theJudicialInterpretationonPunitiveDamages)explainsindetailtheapplicationofpunitivedamages.In‘severe’cases,theJudicialInterpretationonPunitiveDamagesliststhefollowingconditions:committingthesameorasimilarinfringementagainafterbeingadministrativelypenalisedoradjudicatedbythecourtforinfringement,theinfringeragaincommitsthesameorasimilarinfringement;engagingintheinfringementofintellectualpropertyrightsasabusiness;abricating,destroyingorconcealingevidenceoftheinfringement;refusingtocomplywithpreservationrulings;theprofitsobtainedfromtheinfringementorlossessufferedbytherightholderaresubstantial;theinfringementmayendangernationalsecurity,publicinterestorpersonalhealth;andothercircumstancesthatcanbedeterminedassevere.[9]Inbadfaithcases,theJudicialInterpretationonPunitiveDamagesliststhefollowingconditions:theinfringercontinuestocommittheinfringementafterbeingnotifiedorwarnedbytherightholderoraninterestedparty;theinfringeroritslegalrepresentativeoradministratoristhelegalrepresentative,administratororactualcontrolleroftherightholderoraninterestedparty;thereexistsalabour,service,cooperation,licensing,distribution,agency,representationorothersuchrelationshipbetweentheinfringerandtherightholderoraninterestedparty,andtheinfringerhashadaccesstotheinfringedintellectualproperty;therehavebeenbusinessdealingsornegotiationsforthepurposeofreachingacontractbetweentheinfringerandtherightholderoraninterestedparty,andtheinfringerhashadaccesstotheinfringedintellectualproperty;theinfringerengagesinpiracyorcounterfeitingregisteredtrademarks;andothercircumstancesthatcanbedeemedasbadfaithorintentional.[10]Ifatrademarkinfringementcasemeetstheaboverequirements,thenpunitivedamagescanbeconsidered.Thepunitivedamagesarecalculatedbybasenumbertimesamultiple.Asmentionedabove,thebasenumbershouldbedeterminedbytheactuallossessufferedbytherightholder,thebenefitsgainedbytheinfringerduetotheinfringementandareasonablemultipleofthelicensingfeeforthetrademark.Asforthemultiple,theJudicialInterpretationonPunitiveDamagesstipulatesthefactorstoconsider,namely,thedegreeoftheinfringers’subjectivefaultandtheseverityoftheinfringementact,etc.[11]Theseconsiderationsarequitegeneral,soinpracticethemultipleismainlydecideddiscretionarilybythecourt,andthemultipledoesnothavetobeaninteger,accordingtotheunderstandingandapplicationoftheJudicialInterpretationonPunitiveDamages.[12]Technically,punitivedamagesonlyapplywhenthedamagescanbecalculatedbytheactuallossessufferedbytherightholder,thebenefitsobtainedbytheinfringerduetotheinfringementorthemultipleofthelicensingfeeforthetrademark.Ifthecourtappliesstatutorydamages,punitivedamagesshouldnotbeadopted.Thisismainlybecauseoftheconsiderationthatwhenthecourtdecidestheamountofstatutorydamageswithinthe5millionyuanlimit,itshouldhaveconsideredthefactorsofthereputationoftherightholder,theseverityoftheinfringementandthebadfaithoftheinfringer,etc,whichalreadyincludethefactorsofpunitivedamages.Inthepastfewyears,therehavebeensomecasesthatadoptpunitivedamagesandstatutorydamagesatthesametime.Thatistosay,forthedamagesthatcanbecalculatedandascertained(withevidencesuchassalesdata),thecourtcalculatesthesameandrulespunitivedamagesaccordingly;forthedamagesthatcannotbeaccuratelycalculated(withoutsufficientevidence),thecourtdecidestheamountatitsdiscretion.Thefinaldamagesawardswillbethesumoftheabovetwoparts.[13]Thismainlyhappenswhentheinfringementissevere,andeachpartofdamagesalonemaynotbeabletocovertherightholders’lossesortodetertheinfringers.Thisisanewandmeaningfulexplorationofthedamagesawardssystemthatcanhelptherightholderstoreducetheirburdenproofandbetterdefendtheirinterests.Asweknow,itischallengingforrightholderstohavetheexactfinancialinformationoftheinfringers,especiallyconsideringthatmanyinfringersinChinaarerathersmall-scale,withnostandardisedfinancialmanagement.Therefore,withthisnewtendency,punitivedamagescanbeusedmoreoftenandplayamoreimportantroleinfuturetrademarkinfringementcases.Currently,theexaminationcriteriaofdamagesawardsandpunitivedamagesstillvariesindifferentprovincesandcourtsinChina,especiallywhentheevidenceisinsufficienttocalculatethedamagesfrominfringers’benefitsaccurately.Somecourtssticktothestatutorydamagesandhaveahighstandardforevidence,somearemoreopentodiscretionarydamagesandarewillingtoapplypunitivedamageswhenthereisonlybasicevidence.Forrightsholders,itisadvisabletoarrangeathoroughinvestigationagainsttheinfringersbeforeinitiatingthelawsuitandtrytoestablishjurisdictioninthemoreopencourts.Herearetwoinsightsfortherightholdersindefendingtheirrightsthroughtheabovethreetypicalcasesandthejudicialinterpretationonpunitivedamages:Theyshouldactivelydefendtheirrights,suchasfilingoppositionsorinvalidationsagainstmalicioustrademarks,orsendingdemandletterstoinfringers,becausethesemeasurescanleadtotheinfringers’activitiesbeingconsideredrepeatedinfringements,whichcanthenbesubjecttopunitivedamages.Theyshouldfullyutilisesalesdatadisclosedbyinfringersthroughtheirwebsiteandotherpublicchannelstoproveinfringers’profits.[1]Article63oftheChineseTrademarkLaw.[2]Oneofthenationaltop10intellectualpropertycasesinChinain2023,[2022]ZuiGaoFaMinZhongNo.313.[3]Oneofthetop10intellectualpropertycasesinJiangsuProvincein2023,[2022]ZuiGaoFaMinZhongNo.209.[4]Oneofthenationaltop10intellectualpropertycasesinChinain2023,[2022]ZuiGaoFaMinZhongNo.312.[5]Theplaintiffclaimeddamagesbasedonunfaircompetition,notthetrademarkinfringement.Butconsideringthespiritoftrademarklawandanti-unfaircompetitionlawondamagesawardsisthesame,andthiscaseisratherrepresentative,itisincludedinthearticle.[6]Article63ofChineseTrademarkLaw.[7]Article25oftheSupremePeople'sCourtProvisionsonSeveralIssuesConcerningEvidenceinCivilLitigationofIntellectualPropertyRights.[8]PunitivedamageswereincludedinChineseTrademarkLawin2013whenthemultiplewasthreetimesatmost.In2019,theChineseTrademarkLawwasamended,andthemultiplewasraiseduptofivetimes.In2021,punitivedamageswereaddedintoCivilCode.[9]Article4oftheJudicialInterpretationonPunitiveDamages.[10]Article3oftheJudicialInterpretationonPunitiveDamages.[11]Article6oftheJudicialInterpretationonPunitiveDamages.[12]https://www.court.gov.cn/zixun/xiangqing/297121.html.[13][2022]Hu73MinZhongNo.187.[2020]Yue0104MinChuNo.46217.

DavidHuangInpractice,whenreceivingaNoticeofReexaminationfromtheChinesepatentoffice,thepatentapplicantusuallywouldchoosetofurtherrevise(normallynarrow)theclaimstoincreasethelikelihoodofpersuadingthereexaminationpanel.Asthegeneralobservation,itisdifficulttopersuadeapaneltochangeitsopinionbyargumentsonlyonthisoccasion.Inarecentcase,afterreceivingtheNoticeofReexamination,LexFieldproactivelycalledtheexaminersforamoreaccurateunderstandingofthepanel'srealopinionandpresumptionuntoldintheNotice,andthensearchedforandsubmittedevidencetoprovethatcertainpresumptionbythepaneliswrong,eventuallymanagingtopersuadethepaneltoreversethelowerrejectionandthenobtainingapatentfortheclientprotectinganewpharmaceuticalconjugate.SubjectapplicationTheapplicationseekstoprotectaconjugateofmutantfibroblastgrowthfactor21(FGF-21).FGF-21haslongbeenconsideredtohavethepotentialtotreatdiabetes,especiallytypeIIdiabetes.Whenenteringthereexaminationproceeding,claim1oftheapplicationprotectsaspecificmutantFGF-21peptideconjugatewhosestructureattachesthepeptidesequenceatanaminoacidpositionneartheC-terminusofthesequencetoaglycosylmoiety,whichisthenattachedtoalinearPEGof20kDa(i.e.glycoPEGylationofthepeptidesequence).Meanwhile,thespecificationincludesdetailedexperimentaldatashowingthatthesubjectconjugatecaneffectivelyreducethelevelofglycosylatedhemoglobin(HbA1c)insubjectpatients.Examiners'opinionFromthelowersubstantiveexaminertothereexaminationpanel,theexaminershaveheldthattheconjugateofthepresentapplicationisobviousoverthecitedreferences.TheclosestpriorartR1generallydiscussesglycoPEGylationofpeptides.Amongthenumerouspeptides,R1alsotestedFGF-21ofthesamesequence(numberedB.41).Incomparison,differencesbetweenB.41andclaim1include:(1)differencesintheglycosylstructure,(2)differencesinPEG:B.41usesbranchedPEGof40kDa,whileclaim1useslinearPEGof20kDa.R1doesnotaddressmedicalpurposeorefficacyofthetestedsubstances(includingB.41),andinparticulardoesnotdiscussortestwhetherB.41hasefficacyondiabetes.IntheNoticeofReexamination,thecollegialpanelheldthat:(1)besidesB.41,R1alsotaughtthevariousglycosylgroupsinthestructureofclaim1,and(2)anotherreferenceR2taughttheuseof20kDalinearPEG-butyraldehydetomodifyFGF-21,andthemodifiedproductretainedthebiologicalactivityoftheprotein,anditsthermalstability,anti-trypsinhydrolysisabilityandinvivohalf-lifeweresignificantlyimproved.Therefore,onthebasisoftheaboveteachingsofR1andR2,thoseskilledintheartwouldbemotivatedtomodifyB.41toreachthestructureofclaim1.Asfortheeffectof"loweringHbA1clevel"ofthepresentapplication,sinceHbA1clevelhasbeenthegoldstandardfordiagnosisandtreatmentofdiabetes,andR2hastaughtthatFGF-21hasthepotentialtotreatdiabetes,thiseffectcouldhardlybecharacterizedas"unexpected".Thepanelfinallyheldthatclaim1isnotinventive.Previously,theapplicanthadpresentedthefollowingarguments:(1)R1didnotdiscussthepharmacologicalefficacyofB.41atall,butonlygenerallydiscussedglycosylationofvariouspeptides,andthoseskilledintheartcouldnotdeterminehowtomodifyB.41orpredictwhetherthemodificationwouldhaveefficacysimilartothepresentapplication,(2)thespecificationofthepresentapplicationclearlystatesthatglycoPEGylationattheC-terminusofthepeptidesequenceovercomesalong-heldprejudiceintheart,becauseitwastraditionallybelievedthattheC-terminusshouldbepreservedforbindingwithβ-Klothoproteintoachieveitspharmacologicalefficacy.TheapplicantalsocitedthefailedFGF-21conjugateswithsimilarglycoPEGylatedstructuresfromPfizer,EliLillyandBristol-MyersSquibbascounterevidencetoprovethattheeffectoftheconjugateofthepresentapplicationwouldbeunexpected.Ontheabovearguments,theexaminersgavethesecomments:(1)teachingsofR1andR2wouldbesufficienttomotivatethoseskilledinthearttomodifyB.41torealizethepresentapplication,andsinceitwasknownthatFGF-21hasthepotentialtotreatdiabetes,theeffectofthisapplicationcouldbeexpected,(2)theeffectofglycoPEGylationattheC-terminusorattheN-terminuscouldbeeasilydeterminedthroughroutineexperiments.AsfortheproductsofPfizer,EliLillyandBristol-MyersSquibb,theexaminersheldthattheirspecificsequencesorglycoPEGylationsitesaredifferent,andthustheyhavenoreferencevalue.CommunicationwithexaminersandevidenceSincesomeofthecommentsintheNoticeofReexaminationwerevagueandothersindicatedopportunitiesfortheapplicanttopresentcounterevidence,LexFieldcalledthepresidingexaminerofthecollegialpanelseveraltimesinordertobetterunderstandtheexaminers'trueopinion.Inatelephoneconversation,thepresidingexaminerrevealedthatinthepanelists'minds,whetheraFGF-21conjugatehasefficacymainlydependsonthespecificmutationwhileglycoPEGylationhasonlyaminoreffect,andthisunwrittenpresumptionactuallyistherootcausewhythepanelconsideredtheconjugateofthepresentapplicationobviousoverB.41ofR1.However,accordingtothepreviouscommunicationwiththeinventor,LexFieldknewthatthisunderstandingisactuallywrong.LexFieldthushadin-depthdiscussionswiththeinventoranddecidedtointroducethefollowingevidence:(1)historicalexperimentaldatadevelopedbytheinventor,especiallycomparisondatatestingdiabetestherapeuticpotentialofmultipleFGF-21mutantsbeforeandafterglycoPEGylation,toshowthattheeffectofglycoPEGylationonthetherapeuticpotentialisactuallymoresignificantthantheselectionofmutants.(2)analysisbytheinventortoshowthatB.41ofR1islikelyinactivebasedonexistingexperimentaldata.Atthesametime,LexFieldsearchedforliteraturesontheselectionoftheC-andN-terminusofthepeptidesequence,andsubmittedanumberofpapers(includingverynewonespublishedaftertheprioritydateofthisapplication)toprovethat"theC-terminusofthesequenceoftheFGF-21peptideshouldnotbeusedforglycoPEGylationbecauseitneedstobeboundwiththeβ-Klothoprotein"wasalongstandingunderstandingintheart,asfurthercorroborationandreinforcementtoexistingstatementsinthespecificationofthisapplication.Basedonfurthertelephonecommunicationwiththepresidingexaminerandthefinalresult,theaboveevidenceplayedadecisiverole.TheexaminermusthavepaidmoreattentiontothechoiceofparametersofglycoPEGylation,includingthechoiceofC-terminal/N-terminalandthechoiceofPEGconfigurationandmolecularweight.Theexaminerevenconductedhisownsearch,andfoundandcitedanotherreferenceoccurringwithreferencessubmittedbyLexField,showingthat"peptidesequencesshouldnotbeglycoPEGylatedneartheC-terminus"wasindeedalongstandingknowledgeintheart.Intheend,thecollegiatepanelconcludedthat,inviewoftheabovefacts,thoseskilledintheartwouldbeunabletodeterminewhetherB.41ofR1wasactive,wouldnotbemotivatedtomodifyittorealizethepresentinvention,andthustheclaimedconjugatewouldbenon-obvious.Ontopofthis,thepanelfurtherrecognizedtheexperimentaldatainthespecificationofthisapplicationoncontrollingtriglycerideandHbA1clevels,andheldthattheconjugateofclaim1hasachievedbeneficialtechnicaleffectsandthusmade"notableprogress"overthepriorart,whichcompletedtheinventivenessanalysiswitharesultfavorabletotheclient.ConclusionApplicantsandpractitionersareoftenfrustratedwithexaminers'stubbornness.Thiscasehighlightstheneedforeffectivecommunicationtofindoutpossibleuntoldpresumptionexaminersmaybepreoccupiedwiththatareunwrittenintheformaltextofanofficeaction.Theapplicantscanthentrytosearchforevidencetorebutsuchassumptions.FromLexField'sexperiencewiththisandothersimilarcases,whenpresentedwithconvincingevidenceandargumentsbasedonthesame,Chineseexaminerscanbepersuaded.

DavidHuangWhetheritisapatentinfringementactionoraninvalidationaction,howtointerpretthetermsoftheclaimsisabasicissue.TheIntellectualPropertyDivisionoftheSupremePeople’sCourttookbasicallyoppositedirectionsonthisissueintworecentjudgments:inonecase,thecourtinterpretsthekeytermastheusualmeaninginthesubjectfieldthatiswiderandbeyondembodimentstaughtinthespecification,whileintheothercasethekeytermisinterpretedinarestrictivemanneraccordingtothepurposeoftheinvention.Itisworthnotingthattheresultoftheinterpretationisbeneficialtothepatenteesinbothcases.Thesetwojudgmentsareworthyofin-depthcomparativereading,andhavestrongguidingsignificanceforinfringementactions,invalidationactionsandthedraftingofpatentspecificationsandclaims."Touchscreen"case:theusualmeaninginthesubjectfieldThiscaseisaninfringementcase,theinvolvedpatentispatentNo.201010235151.7,andthetitleis"Atouchscreenanditsmulti-channelsamplingmethod".Claim1reads:1.Atouchscreen,comprisinganinfraredemittingtube,aninfraredreceivingtube,atouchdetectionarea,afirst-levelprocessingcircuitandasecond-levelprocessingcircuit...Thekeyquestioninthiscaseiswhethertheterm"touchscreen"coverstangiblephysicalhardware.Thecourtoffirstinstance,theGuangzhouIntellectualPropertyCourt,interpretedthetermasatangiblehardwarestructuremainlybasedonthegeneraldictionary"ModernChineseDictionary",anddeterminedthattherewasnoinfringementonthegroundsthattheallegedinfringingproductdoesnothaveacorrespondinghardwarestructure,withthefollowingspecificreasoning:•Thespecificationofthesubjectpatentdoesnotgiveaspecialdefinitionfor"touchscreen".•Fromtheinterpretationof"touchscreen"givenbytheModernChineseDictionary,itcanbedeterminedthatitisatangiblemedium.•Thetouchscreeninallembodimentsthroughoutthespecificationofthesubjectpatentisatangiblemedium.TheSupremePeople'sCourthoweverreachedtheoppositeconclusionbasedonthefollowingreasons:•Accordingtotheevidencesubmittedbythepartiesoncommonknowledgeinthefield,"touchscreen"isatechnicaltermwithadefinitemeaninginthisfield,coveringcontacttouchscreenswithaphysicalscreenstructureandnon-contacttouchscreenswithoutaphysicalscreenstructure.ThelowercourtusedtheModernChineseDictionaryandotherreferencebooksthatarenotfromthisfieldasthemainevidence,whichisoutoftouchwiththetechnicalbackgroundandknowledgesystemofthisfieldandneedstobecorrected.•Theembodimentsrelatedtothetouchscreeninthespecificationdonotspecificallylimittheterm,andtheconstructionofthistermshouldnotberestricted.Inparticular,theinventionofthispatentdoesnotlieinimprovingthematerialorstructureofthetouchscreen,butinhowtoimprovetheresponsespeedofthetouchscreen,thesamplingmethodandthecorrespondingcircuitry.•Evenifdependentclaim16furtherlimitsthetouchscreeninitstechnicalsolutionasatouchscreenwithaphysicalscreenstructure,thislimitationshouldnotbeappliedtoindependentclaim1."Calculation"case:purposeoftheinventioncannarrowthemeaningofatermThiscaseisapatentinvalidationcase.TheinvolvedpatentispatentNo.201310072198.X,andthetitleis"Planarechoimagingsequenceimagereconstructionmethod".Claim1reads:1.Animagereconstructionmethodofplanarechoimagingsequences,characterizedincomprisingthefollowingsteps:acquiringplanarechoimagingdataSi,andsimultaneouslycollectingthreereferenceechosignalsR1,R2,R3thatarenotphase-encoded…;calculating,viathereferenceechosignals,parametersthatareneededtocorrecttheplaneechoimagingdata...Thekeyissueinthiscaseishowtointerprettheterm"calculation"inclaim1.IntheinvalidationproceedingbeforetheNationalIntellectualPropertyAdministration(CNIPA),theinvalidationrequesterarguedthat"calculation"shouldcoverallcalculationmethods(includingthecalculationmethodinthepriorartitcited),andaccordinglyclaim1isnotnovel.However,initsdecision,CNIPA,basedontheteachingsonthedefectsofthepriorartinthespecificationofthepatent,heldthatthe"calculation"ofthispatentshouldreflectimprovementsoverthepriorart,andshouldthereforebeconstruedas"directcalculationfromthereferenceechosignals".Basedonthis,CNIPAconcludedthatclaim1isnoveloverthepriorartcitedbytherequester.Thecourtoffirstinstance(BeijingIntellectualPropertyCourt)overturnedCNIPA’sdeterminationbasedonthefollowingreasons:•Theterm"calculation"hasaclearanddefinitemeaningtothoseskilledintheart:calculatinganunknownquantitybasedonknownparameters.Thus,itisnotnecessarytousetherelevantdefinitionsinthespecificationtoconstrueitsmeaning.•Evenifthetermisinterpretedinaccordancewiththeprincipleof“broadestreasonableinterpretation"asdeterminedbytheSupremePeople'sCourt,theabove-mentionedbroadinterpretation("calculatinganunknownquantitybasedonknownparameters")doesnotexceedthereasonablerange.•Thedecisionindisputeinterpretedthe"calculation"as"directcalculation",whichessentiallyisaconclusionfromfirstsummarizingthespecificembodimentstaughtinthespecificationandthencomparingitwiththecalculationmethodofthecitedpriorart.Thismethodofinterpretingclaimswillbringgreatuncertainty,andwhatis"direct"isvagueinitself.Astheresult,thescopeofprotectionofclaim1willbecomeunclear,whichdoesnotcomplywiththepurposeofclaimconstruction.However,inthesecondinstance,theSupremePeople’sCourtbasicallyadoptedCNIPA’sdeterminationbasedonthefollowingreasons:••Article2oftheSupremePeople’sCourt’sProvisionsonSeveralIssuesConcerningtheApplicationofLawintheTrialofAdministrativeCasesforPatentExaminationandValidation(I)stipulates:“ThePeople’sCourtshalldefinetermsofaclaimaccordingtotheusualmeaningpersonsintheartwouldunderstandafterreadingtheclaims,specificationanddrawings.Ifatermofaclaimhasadefinitedefinitionorexplanationinthespecificationordrawings,thedefinitionorexplanationshallbefollowed.”•Accordingly,theinterpretationoftheterm"calculation"inclaim1ofthispatentshouldnotsimplybebasedonitsliteralmeaning,butshouldbeunderstoodbythoseskilledintheartafterreadingtheclaims,specificationanddrawings.Evenwhenapplyingtheprincipleofbroadestreasonableinterpretationtointerprettheclaims,“reasonable”shouldbethestartandendwithinthebroadestscopeofmeaningoftheterm.•Inviewofthepurposeofthesubjectinventionandexplanationsanddescriptionsof"calculation"inthespecificationanddrawingsofthispatent,itcanbeknownthatthe"calculation"inthispatentdoesnotcoverallpossiblecalculationmethods,buthasitsspecificmeaning.ThispatentpointsoutseveralshortcomingsofthepriorartintheBackgroundsectionandContentoftheInventionsection.Inordertoovercometheaboveshortcomings,thispatentintendstoprovideamoreaccurateimagereconstructionmethodforplanarechoimagingsequences.Itcanbeseenthatthepurposeoftheinventionofthispatenthasclearlyexcludedthecalculationmethodofthetwoechosignalshavingphasedifferenceandthuslosingphaseinformation.Thus,thoseskilledintheartcouldunderstandbyreadingthespecificationanddrawingsthatthe"calculation"inclaim1ofthispatentisadirectcalculationwithoutlossofphaseandotherinformation.

IntwojudgmentsissuedconsecutivelyinNovember,theSupremePeople’sCourtofChina(“SPC”)reversedthelowercourts’findingofinfringementunderthedoctrineofequivalents.Inbothjudgments,SPCheldthatthespecificationandclaimsofthepatentsincludelanguagethatwouldleadpersonsinthearttobelievethattheaccusedtechnicalsolutionshouldbeoutsidethescopeofthepatents,thuspreemptingtheapplicationofthedoctrineofequivalents.Inoneofthejudgments,SPCrevivesthe“foreseeability”conceptintheequivalencyanalysis,whiletheotherjudgmentrevivesthe“intentionalexclusion”concept(whichcanalsobeanalyzedunderthe“foreseeability”concept).SPC’sreasoninginapplyingtheconceptspointstoimperfectionsinthedraftingofthetwopatentsindispute.Apparently,byissuingthejudgmentsconsecutivelyandgivingthemgoodpublicities,SPCwantstosendasternalertthatwhileChinaisenhancingprotectionofpatentrights,patentownersshouldalsospendmoreresourcesenhancingthedraftingqualityoftheirpatents.ForeseeabilityTheplaintiffinthiscaseownsinventionpatentNo.201610201500.0entitled“Electricity-drivenHedgeTrimmer”,whichisalsothepreambleofclaim1.Thedefendant’strimmerisdrivenbyfuelwhilereflectingallotherfeaturesofclaim1.ThelowerIntermediatePeople’sCourtofSuzhoufoundequivalencybetween“drivenbyelectricity”and“drivenbyfuel”onthefollowinggrounds:--Both“drivenbyelectricity”and“drivenbyfuel”havebeencommonlyusedintheart.--Thecorefunctionofthepatent,switchingbetweentwotrimmingmodes,isirrelevanttohowthetrimmerisdriven.Thatis,theproblemtobesolvedbythispatent,thekeytechnicalfeaturesadoptedandthetechnicalresultachievedareallirrelevanttohowthetrimmerisdriven.--Therefore,“drivenbyelectricity”and“drivenbyfuel”arefeaturesadoptingsubstantiallythesamemeans,realizingsubstantiallythesamefunctionandachievingsubstantiallythesameresultthatcouldbeperceivedbypersonsintheartwithoutinnovativeefforts.SPChoweverfoundnoequivalencybasedonthefollowingrules:--Determiningthescopeofapatentneedstobalancethepatentowner’sinterestsandthepublic’srelianceonthe“publicnotice”functionofpatentdocuments.--Ifthepatentowner,whendraftingthepatentapplicationdocuments,clearlyknew(i.e.foreseeable)atechnicalsolutionbutfailedtoincludethesolutionwithinthescopeoftheclaims,heshouldbeprohibitedfromclaimingthatsolutionbackviathedoctrineofequivalents.--Todeterminewhetherthepatentowner“clearlyknew”atechnicalsolutionwhendraftingthepatentshouldbedonebasedonawholisticreadingandunderstandingoftheclaims,specificationanddrawingsfromtheperspectiveofpersonsintheart.SPCappliestheaboverulestothefollowingfactsrelatedtothesubjectpatent:--Fromthetitleofthepatent,thepreambleoftheclaimsandrelevantteachingsinthespecification(particularlytheBackgroundsection),itisclearthatthepatentownerwasawareofthetwodrivingmodes(byelectricityorbyfuel).--Thespecificationalsostatesthat“environmentfriendlywithoutpollution”isaveryeffecttobeachievedbythesubjectpatentoverthepriorart.--Fromalltheabovefactors,personsintheartwouldknowthattoachievethe“environmentfriendlywithoutpollution”effect,thepatentownerexplicitlydidnotseektoprotecttechnicalsolutionsdrivenbyfuel.Ifthepatentownerisallowedtocoversuchsolutionsviathedoctrineofequivalents,thepublic’srelianceonthe“publicnotice”functionofpatentdocumentswouldbeundermined.IntentionalExclusionTheplaintiffinthiscaseownsutilitymodelpatentNo.201420474545.1.Claim1ofthepatentdefinesatinprintingpatchweldingfixtureforPCBcomprisingasquarefixtureray,andspecificallyrecitesthat“eachedgeofthefixturetrayismovablyprovidedwithanedge-positionpush-pulldeviceforclampingeachedgepositionofthePCB”.Theaccusedproductalsohasasquarefixturetray,andisdifferentfromclaim1onlyinthatitsfixturetrayhasthepush-pulldevicesprovidedonlyattwooppositeedges.ThelowerIntermediatePeople’sCourtofShenzhenfoundequivalencybetweenthetwofeaturesonthefollowinggrounds:--Boththepatentandtheaccusedproductusecorner-positionandedge-positionpush-pulldevicesofthesameconfigurationforclampingaPCBandfacilitatingtheassemblyanddisassemblyofthePCB.--Whenboththepatentandtheaccusedproductalsousethecorner-positionpush-pulldevices,providingedge-positionpush-pulldevicesateachofthefouredgesoronlyattwooppositeedgesachievessubstantiallythesamefunctionandeffect,andtheinterchangebetweenthetwooptionswouldnotneedinnovativeefforts.Inreversingthelowercourt’sequivalencyfinding,SPCagainhighlightsthepublic’srelianceonthe“publicnotice”functionofpatentdocuments,andspecificallyholdsthatifpersonsintheart,afterreadingthespecificationandclaims,wouldunderstandthatthepatentownerintentionallyexcludedatechnicalsolutionfromthescopeofthepatent,thepatentownershouldbeprohibitedfromclaimingthatsolutionbackviathedoctrineofequivalents.Specifictothiscase,SPCmadethefollowingreasoning:--Whenaclaimuseslanguagelike“atleast”or“nomorethan”tolimitanumericalvalueandpersonsintheartafterreadingthespecificationandclaimswouldunderstandthatthepatentspecificallystressesthelimitingeffectofsuchlanguage,thepatentownershouldbeprohibitedfromtryingtocoveradifferentnumericalvalueviathedoctrineofequivalents.--Personsintheartwouldknowthatprovidingthepush-pulldevicesatfourortwooppositeedgesofthetrayhassubstantiallythesameeffect,andthepatentowneralsoadmittedtothisinthelegalproceedings.However,thepatentownerstillusedthelanguage“eachedge”inclaim1,whichshouldberegardedasanintentionalhighlight.Giventhis,personsintheartwouldunderstandthatthepatentownerintentionallyexcludedthe“twooppositeedge”solutionfromthescopeofthepatentwhenapplyingforthepatent.Inthiscase,thepatentownershouldbeprohibitedfromclaimingthesolutionbackviathedoctrineofequivalents.CommentsThe“foreseeability”concepthasbeenthesubjectofcontroversysinceitwasintroducedintothepatentlaws,asopponentsarguethattheconceptwouldimposeanundulyburdenonpatentownersindraftingpatentapplications.WhileSPChasapplieditseveraltimesinindividualcases,theHighPeople’sCourtofBeijinghasformallystipulateditinArticle60ofitsGuidelinesfortheDeterminationofPatentInfringement(2017)(whicharelegallybindingoncourtsintheBeijingMunicipalityandalsocommonlyreferencedtobycourtsacrossthecountry).Thisarticlelimitstheapplicationofthisconceptto3scenarios:(1)anon-innovativefeatureofinventionpatents,(2)anamendedfeatureofinventionpatentsand(3)featuresoftheclaimsofutilitymodelpatents.TheaboveSPCjudgmentcorrespondstoscenario(1).Meanwhile,Article59oftheGuidelineshasstipulationonthe“intentionalexclusion”concept.TheHighPeople’sCourtofBeijinghaspublishedabookgivingarticle-by-articleexplanationstotheaboveGuidelines,andtheexplanationsonArticle60provideacompleteexaminationtothehistoryofanddebatesaround“foreseeability”,includingacomparisonwithpracticeintheUnitedStatesandJapan,whichisamust-readonthisconcept.ThebookparticularlyexplainsSPC’skeyrationaltohaveintroducedthisconcept:todiscouragethefilingofpatentapplicationsofalowquality(whichareusuallytheproductsofpatentattorneysworkingunderverylowlegalfeesforthedrafting)andencouragepatentfilerstospendmoreresourcesenhancingthequalityofdrafting.TheHighPeople’sCourtofBeijingalsorecognizesthedisagreementsonthisconceptandstatesinthebookthatitshouldbeappliedverycarefully.Inviewofthehistory,andgiventhepublicitiesSPCmadetotheabovetwojudgments,obviouslySPCwantstosendasternalerttothepubliconqualityofpatentdrafting.

DavidHuangLexFieldLawOffices•Theinterpretationincludesnoteworthyrulesonsubstanceandprocedures,andbringsmoreconsistencywithrulesforinfringementactions.•Thepromulgationofthisinterpretationhastakenunusuallylong,andthefinalinterpretationismuchnarrowerandmoremodestthanitspreviousdrafts.ObjectionfromCNIPAisanimportantcausetothedelayandwatering-down.•Severalarticlespresentinearlierdraftsarenotincludedinthefinaltext.ThedeletionimpliesthatrelevantdisagreementsbetweenCNIPAandthecourtswerenottotallyresolvedandthedeletionwasacompromisefornow.TheSupremePeople'sCourt("SPC")ofChinahasrecentlypromulgateditsfirstjudicialinterpretation("JI")governingjudicialreviewofCNIPA'spatentreexaminationandinvalidationdecisions.TheJIincludesarticlesaddressingbothsubstantivelawsandproceduralissues.ManyofthearticlesmerelycodifypracticethathasbeenadoptedbytherelevantcourtsandCNIPAandthusarenotdiscussedhere.BelowwefocusonarticlesthatareparticularlynoteworthyandsomearticlesthatwereincludedintheearlierdraftsofthisJIbutareconspicuouslyabsentfromthefinaltext.ClaimconstructioninexaminationandinvalidationactionsArticles2and3oftheJIrelatetorulesforclaimconstructioninexaminationandinvalidation,althoughthetwoarticlesintentionallyuseaChinesetermfor"claimconstruction"differentfromthatforinfringementactions.Consistentwithinfringementactions,Article2providesthatintrinsicevidenceshouldbepreferredoverextrinsicevidenceinclaimconstruction.SinceSPChadclosecommunicationwithCNIPAinmakingthisJI,itisbelievedthatArticle2willovertaketherelevantparagraphsinCNIPA'sExaminationGuidelines("Guidelines")whichapparentlypreferextrinsicevidence.Article3providesfortheso-called"reverseestoppel"inthatargumentsmadebyapatentownercanbeusedtointerprettheclaimsinaninvalidationaction.Thisarticlecompletesthemutualinfluencebetweeninvalidationandinfringementactions,andimposesahigherrequirementforpatentownersinmakingarguments.Therewasanotabledeletionofaprovisionfromtheearlierdraft,whichwouldstipulatethatpriorexaminationhistorycanbeusedtoconstructtheclaimsinexaminationandinvalidationactions.ThisdeletionmeansthatCNIPAandthecourtswouldgivelittleweighttothepatentapplicant/owner'spriorargumentsinpreviousexaminationorinvalidationactionsandfocusmoreonobjectiveevidenceonrecords,whichisamajordifferencefromtheruleforinfringementactions.ExperimentaldataIthasbeenwellknownthatChinaemphasizesexperimentaldataintheinventivenessanalysisanddisclosuresufficiencyanalysis,particularlyforchemicalandlife-scienceinventions.SeveralarticlesinthisJIrelatetothistopic.Codifyingthespiritgivenbycourtsinthehigh-profilecaseeventuallyinvalidatingpharmaceuticalpatentNo.201110006357.7,Article5formallyprovidesthatifevidenceonrecordsprovesthattheembodiment,technicaleffect,dataordiagramsinthespecificationanddrawingswerefabricated,thecourtcaninvalidatetherelevantclaimsbasedontheapplicablelegalgrounds.Meanwhile,Article10dealswithsupplementaldatasubmittedbyapplicantsforpharmaceuticalpatentapplicationstoprovetheinventivenessordisclosuresufficiency.Thisarticleisnotableforbothwhatitsaysandwhatitdoesnotsay.Itsaysthat,inlinewithChia'scommitmentmadeinthephase-onetradeagreementwiththeUS,thecourtshallexaminesupplementaldatasubmittedbytheapplicantaftertheeffectivefilingdate.Butwhatismorenotableisthatthisarticledoesnotsay:(1)whetheritalsoappliestograntedpatents(i.e.datasubmittedininvalidationactions),(2)whetheritappliestoothertypesofapplicationsthanpharmaceuticalones,and(3)whatcriteriathecourtwillusetorecognizeordenythevalueofsuchdataregardinginventivenessofdisclosuresufficiency,particularlywhetherthecourtshouldadoptthestandardCNIPAgivestheGuidelines:thevalueofsuchdatacanberecognizedonlyifthe"technicaleffect"tobeprovenbysuchdatashouldbeabletobederivedfromoriginaldisclosuresoftheapplication.ActualproblemtobesolvedbyadistinguishingfeatureArticle12codifiesthespiritSPCgaveinitsjudgmentonthereexaminationproceedingofpatentapplicationNo.201210057668.0,whereitheldthattherequirementofinventivenessservesadifferentlegislativepurposefromdisclosuresufficiency,andthereisnoneedforthespecificationanddrawingstoprovideteachingsonthetechnicaleffecttobeachievedbyadistinguishingfeatureofthesubjectclaimovertheclosestpriorart;instead,thecourtcanmakeadeterminationonthetechnicaleffect(andthustheactualproblemtobesolved)basedoncommonknowledgeintheart,therelationshipbetweenthedistinguishingfeatureandotherfeaturesintheclaimandthefunctionofthedistinguishingfeatureinthetechnicalsolutiondefinedbytheclaim.CNIPAstronglyobjectedtoSPC'sjudgment,buttheformalpromulgationofthisarticleinthisJIimpliesthatSPCandCNIPAhavereachedagreement.Thisarticlecallsfornewconsiderationsfrompatentchallengersandpatentownersinfutureinvalidationactions.Evenifaclaimsurvivesaninventivenesschallengebecausetheauthorityrecognizestheactualproblembasedonthedeterminationmethodologyprovidedinthisarticle,thereisaquestionwhethertheclaimcanbechallengedonthegroundsthatthespecificationanddrawingsprovidenoexplicitteachingsontherelevanttechnicaleffect.SpacefordesignandfactorstodetermineitArticle14willintroducethisconceptintothenoveltyandmarked-differenceanalysisfordesigns,asithasbeenusedininfringementactions,inthatwhenthespacefordesignislarge,generalconsumersarelesslikelynoteasmalldifferencebetweentwodesigns,andifthespaceissmall,theconsumersaremorelikelytonotesuchadifference.Thisarticlefurtherliststhefollowingfactorsbywhichthecourtmaydeterminethespace:(1)functionandusageofthesubjectproduct;(2)theoverallsituationofthepriordesigns;(3)designscommonlyusedintheart;(4)compulsoryprovisionsinlawsandadministrativeregulations;(5)nationalorindustrialtechnicalstandards;and(6)otherapplicablefactors.AlthoughthisJIisforvalidityactions,theabovefactorsshouldalsobeusedininfringementactions.Invalidationdecisionsbeyondthescopeofthechallenger'srequestsThisissueisaboutsomecontroversialinvalidationcaseswhereCNIPA'sdecisionswerechallengedforhavinggonebeyondthechallenger'srequests,whichwasregardedasanabuseofitsexofficiopowers.AnarticleincludedinanearlierdraftofthisJIwouldprovidethatCNIPAshouldmakeaninvalidationdecisionwithinthescopeof(1)thechallenger'srequestsand(2)alistofexceptionalscenariosgivenintheGuidelineswhereCNIPAcanmakeexofficioactionsbeyondthechallenger'srequests;otherwisethecourtshouldreversethedecision.Withthedeletionoftheabovearticle,Article23oftheformalJIaddressingCNIPA'sproceduresininvalidationactionsismorefocusedonwhetherCNIPAgivesthepartiesanoticeandopportunitytorespondforanynewgroundCNIPAmayintroducethatgoesbeyondthenormalscope.ThissupposedlywillgiveCNIPAmoreleewaytointroduceexofficiogrounds(onthelegalbasisorevidence)ininvalidatingpatents,andpatentownersneedtobevigilant.PartialreversalofCNIPA'sdecisionsArticle24oftheJIstatesthatthecourtcanpartiallyreverseaCNIPAdecisiontowardsomeoftheclaimsordesignswhilemaintainingthedecisionontheotherclaimsordesigns.Thisisalong-awaitedproceduralimprovement,particularlyforaninvalidationactionaccompanyinganinfringementaction.Underthisarticle,theportionofaCNIPAdecisionthatisnotreversedwouldberegardedasbecomingeffectiveearlier,whichwouldbringmoreproceduralcertaintytotheproceedings.Also,Article25and25togethergivecourtstheflexibilityonwhetheritisnecessarytoorderCNIPAtomakeanewdecisionforadecisionthatwasfullyorpartiallyreversedbythecourt.Thepossibilityofnoneedforanewdecisionisalsoaproceduralimprovement.DeletionofanarticleonnewmatterAnarticleinapreviousdraftoftheJIwouldadoptthesamestandardsforthedeterminationofnewmatterdeterminationasforthedeterminationofthesupportbythespecificationtoclaims,butthisarticleisnotpresentintheformalJI,likelybecauseofstrongobjectionbyCNIPA.DeletionofanarticleonstandingtoinvalidateadesignpatentAdesignpatentcanbeinvalidatedifitisinconflictwithapriorright(e.g.copyright)ofathirdparty.Arelevantproceduralquestioniswhohasthestandingtoinvokethisgroundinaninvalidationaction.PRCPatentLawanditsImplementingRulesasthesuperiorlawsdonotprovideanylimitationonthestanding,butCNIPA'sGuidelinesstipulatethatonlytheownerofthepriorrightoraninterestedpartyrelatedtothatrighthasthestanding.ThereareargumentsthatthisCNIPAstipulationisinvalidasitisinconsistentwiththePRCPatentLawanditsImplementingRules.AndtherewerecaseswherethecourtsissuedjudgmentsoverrulingtheCNIPAstipulation,whichhasbroughtsomecertaintytothisissue.AnarticlewasincludedinapreviousdraftofthisJIwhichappearedasaformalcodificationofthosecourtjudgments,butnowitisnotpresentintheformalJI.Noreasonwasgivenonthisdeletion,anduncertaintyonthestandingissueisbackagain.

As litigations involving standard-essential patents ("SEPs") are on the rise globally and in China, LexField's research team has recently conducted a thorough statistical review of SEP cases accepted by the Chinese courts in the period of 2011~2019.We are excited to share the report out of this review.Basic findings include:·From 2011 to December 2019, Chinese courts accepted 160 cases related to SEPs.·Most of the cases involve foreign entities and relate to the telecommunication industry.·Most of the cases were filed with the courts in Beijing, Guangdong, Shanghai and Jiangsu.·Most of the cases are patent infringement disputes, while cases asking the court to determine FRAND terms during license negotiations are also on the rise.The report includes a quantitative analysis from annual distribution, parties involved, geographic distribution of the courts, causes of action, adjudication progress and final outcomes, and also provides a particular summary of the SEP cases accepted in 2018 and 2019.Please clickhereto download the full report.If you have any questions with the report, please contact our partner Ms. Zhao Qishan atqishan.zhao@lexfieldlaw.com.