Adjudication Attached | Summary of the Supreme People's Court's Annual Report on the Application of Law in 43 Intellectual Property Cases Across National Courts (2024)

1. For computer software that must be used with specific hardware, if the right holder sells the hardware and computer software as a package, it can be regarded as distributing the software in the form of tangible carriers, and the principle of exhaustion of rights of distribution can be applied as appropriate. After paying a reasonable consideration, the buyer obtains the ownership of the original or copy of the software and has the right to use it himself or transfer it to others. Restrictions imposed by the right holder on the scope of use and resale of the aforementioned software are not necessarily binding on buyers with whom there is no contractual relationship and third parties who lawfully acquire the original or copy of the software from such buyers. However, unless for the purpose of lawful use, such buyers or third parties shall not arbitrarily reproduce the software, nor shall they use the software copy after transferring the original or copy of the software.

2. According to the specific circumstances of the case, specific measures to stop infringement of trade secrets may include: ceasing to use the trade secrets involved in the case to manufacture or entrust others to manufacture related products, and ceasing to sell related products manufactured using the trade secrets involved in the case; without the consent of the true right holder, the infringer shall not implement, license others to implement, transfer, pledge, or otherwise dispose of patents applied for using illegally obtained trade secrets involved in the case, including maliciously abandoning patent rights; destroying relevant carriers containing trade secrets involved in the case held or controlled by the infringer and relevant units and personnel, or transferring them to the trade secret right holder under the supervision of the people's court or with the witness of the right holder; in the form of public announcements and/or internal notices, notifying company shareholders, senior management, relevant employees, affiliated companies, and upstream and downstream manufacturers who may have access to the trade secrets involved in the case to actively cooperate in fulfilling the requirements of the people's court's judgment regarding stopping infringement, and providing clear guidance on internal intellectual property compliance operations; individually notifying relevant employees who have left the trade secret right holder and joined the infringer and its affiliated companies, all other personnel of the infringer and its affiliated companies responsible for or participating in relevant R&D work (including relevant senior management), and upstream and downstream manufacturers who may have access to the trade secrets involved in the case of the requirements to stop infringement, and signing a commitment letter with them to keep the trade secrets involved in the case confidential and not to infringe.

3. Coordination of Patent Infringement Determination in Related Cases

[Case No.] (2023) Supreme People's Court Zhi Min Zhong No. 740

[Adjudication Summary] For identical accused infringing products, identical patent rights, and identical grounds for non-infringement defense, the determination in related cases should remain consistent to prevent conflicting judgments. Even if the accused infringer did not appeal after the first-instance judgment, the second-instance court can still, based on the determination of the same defense grounds in another effective judgment, revise the judgment to recognize the accused infringer's defense.

1. Judgment with Conditions for Performance and Interest on Debts During Delayed Performance

[Case No.] (2024) Supreme People's Court Zhi Min Zhong No. 370

[Adjudication Summary] 1. For cases where patent invalidation proceedings are suspended due to property preservation measures taken against the patent involved, making it impossible for the National Intellectual Property Administration to make a decision on the request for invalidation before the patent infringement judgment, the people's court may, according to the specific circumstances of the case, make appropriate arrangements for the performance of the obligations determined in the judgment, including attaching necessary conditions to the performance of items such as cessation of infringement and compensation for losses. For example, making the National Intellectual Property Administration's decision to uphold the validity of the patent claims involved in the lawsuit as a prerequisite for the performance of the judgment, and making arrangements for the interest on debts during the period, so as to reasonably balance the interests of all parties.

2. For judgments with conditions for performance, the interest on debts during the delayed performance period can be simultaneously judged, i.e., after the conditions for performance are met, from the date of service of the effective judgment until the date the conditions for performance are met, interest shall be calculated at the loan prime rate (LPR) announced by the National Interbank Funding Center for the same period (i.e., simple interest); if the monetary payment obligation determined in the judgment is not fulfilled after the conditions for performance are met, double interest shall be paid for the delayed performance period.

2. Handling of Executed Patent Infringement Judgments After a Decision Declaring Patent Invalidity

[Case No.] (2024) Supreme People's Court Zhi Min Zai No. 1

[Adjudication Summary] 1. The execution of a judgment after a decision declaring patent invalidity does not fall under the circumstances where the invalidation decision has retroactive effect on an effective patent infringement judgment as stipulated in Article 47, Paragraph 2 of the Patent Law. Generally, the executing court should order the applicant for execution to return the property and its fruits obtained from the executed person in the reversal of execution procedure, and the people's court may also order restitution in the retrial judgment as appropriate.

2. For patent infringement judgments involving multiple accused infringers, if the different times of their compensation obligations lead to different application results of Article 47, Paragraph 2 of the Patent Law, violating the principle of fairness, the people's court may apply the provisions of Article 47, Paragraph 3 of the Patent Law for handling.

2. Handling of Type I Declarations by Generic Drug Applicants Before Patent Information Registration

[Case No.] (2023) Supreme People's Court Zhi Min Zhong No. 1593

[Adjudication Summary] Where the marketing authorization holder of a drug has correctly registered patent information within the prescribed period, but the generic drug applicant has already made a Type I declaration before the patent information registration, the marketing authorization holder of the drug should have the opportunity to request the generic drug applicant to timely apply for a change in the type of declaration within a reasonable period. If the generic drug applicant changes a Type I declaration to a Type IV declaration, or refuses to apply for a change within a reasonable period, or applies for a change to other incorrect declarations, the people's court should accept and conduct substantive review of the patent linkage lawsuit filed by the patentee.

3. Handling of Changes in Drug Technical Solutions in Drug Patent Linkage Dispute Cases

[Case No.] (2023) Beijing 73 Min Chu No. 855

[Adjudication Summary] In drug patent linkage dispute cases, the people's court should use the technical solution reviewed by the drug approval authority as the basis for determining whether it falls within the scope of patent protection. The applicant for drug marketing authorization should timely and truthfully explain to the people's court any changes in the technical solution that may affect the determination of whether it falls within the scope of patent protection, otherwise, they shall bear adverse consequences in accordance with the law.

1. Determination of Inventor Status for Use Patents

[Case No.] (2022) Su 05 Min Chu No. 925

[Adjudication Summary] A use invention patent is an invention created by discovering new uses for known compounds. Its core is not in the known compound itself, but in the discovery and application of new uses for known compounds. If the conception of "old drug, new use" plays a key role in R&D activities, and the person who proposed the conception, contributed to the formation or substantial improvement of the specific technical solution, and made substantial contributions to the phased R&D, can all be listed as inventors.

2. Determination of Environmental Features and Infringement Judgment

[Case No.] (2022) Hu 73 Zhi Min Chu No. 223

[Adjudication Summary] The determination of environmental features can be comprehensively judged based on the description of the invention name, invention subject, and claims related to installation of the patent involved, combined with the content of the specification. When considering whether the accused technical solution has environmental features related to the claims of the patent involved, it is not required that the accused product necessarily has components related to the environmental features, as long as the accused product can be applied to the environment limited by the environmental features.

3. Inventions and Creations of Funeral Products that Violate Social Morality and Harm Public Interest Should Not Be Granted Patent Rights

[Case No.] (2023) Supreme People's Court Zhi Xing Zhong No. 2

[Adjudication Summary] 1. The patent system aims to protect inventions and creations that promote scientific and technological progress and economic and social development. So-called "inventions and creations" that have no substantial benefit to scientific and technological progress and economic and social development should not be granted patent protection. The understanding and application of specific provisions, including Article 5, Paragraph 1 of the Patent Law, should be based on the legislative purpose stipulated in Article 1 of the Patent Law.

2. In judicial practice, socialist core values should be upheld, and social morality and public interest recognized by the people should be advocated and promoted. Even if certain funeral products do not belong to funeral items for feudal superstition, they may still fall under the circumstances of violating social morality or harming public interest as stipulated in Article 5, Paragraph 1 of the Patent Law.

2. Acceptance of Deletion-Style Amendments to Claims During Patent Invalidation Examination Window Period

[Case No.] (2022) Supreme People's Court Zhi Xing Zhong No. 870

[Adjudication Summary] In the oral hearing procedure for patent invalidation examination, when the National Intellectual Property Administration believes that some claims after amendment are unacceptable, the patentee should be allowed to delete the unacceptable claims from the current claims text, and the remaining acceptable claims should be used as the basis for examination. Regardless of whether the deletion is proposed orally by the patentee in court or in writing, the National Intellectual Property Administration should generally accept it; if replacement pages are not submitted in court, the National Intellectual Property Administration may require them to be submitted within a certain period; if replacement pages are not submitted within the specified period, it can be regarded as the patentee not having amended the claims in accordance with the law, and the corresponding handling should be made.

3. Determination of Whether the Design Patent Clearly Shows the Appearance Design to Be Protected

[Case No.] (2024) Supreme People's Court Zhi Xing Zhong No. 672

[Adjudication Summary] If, based on the general consumer's knowledge level and cognitive ability, and considering the patent views, usage state diagrams, and common sense, the appearance design shown in the attached drawings of the design patent still has multiple possibilities, then it can be determined that the design patent document does not clearly show the appearance design of the product to be protected.

II. Trademark Case Adjudication

1. Factors to Consider in Determining Infringement of Geographical Indication Certification Trademark Rights

[Case No.] (2024) Supreme People's Court Zhi Min Zai No. 21

[Adjudication Summary] To determine whether an alleged infringing act constitutes infringement of geographical indication certification trademark rights, the following factors need to be considered: First, whether the alleged infringing goods meet the conditions for using the geographical indication trademark, i.e., whether the goods originate from a specific place of origin; Second, whether the alleged infringing goods have the specific quality of geographical indication products; Third, whether the alleged infringing act is likely to cause confusion or misidentification among the relevant public regarding the origin and specific quality of the goods.

2. Recognition of Prior Use Defense for Trademarks

[Case No.] (2024) Supreme People's Court Zhi Min Zai No. 218

[Adjudication Summary] The application of the prior use defense for trademarks requires balancing the interests of the prior user and the registered trademark exclusive right holder. For a prior user who has used a trademark identical or similar to another's registered trademark on the same or similar goods with a certain influence in good faith within the original scope, the prior user has the right to continue using it; if the use, although earlier than the trademark application date, is later than the trademark registration date, and there is evidence to prove that the prior user knew or should have known of the registration, it is not appropriate to recognize the prior use defense.

3. Recognition of Legitimate Use of Scenic Spot Names

[Case No.] (2024) Supreme People's Court Zhi Min Zai No. 123

[Adjudication Summary] For the use of a mark solely to refer to a scenic spot name, or to describe the relevant content and characteristics of the scenic spot, without exceeding the necessary limits, and where the relevant public, with general attention and combined with daily experience, will not be confused about the origin of goods or services, it constitutes a legitimate and reasonable use of the mark and does not constitute trademark infringement.

4. When There is Evidence of Infringement Profits, Damages Should Be Determined Primarily Based on Infringement Profits

[Case No.] (2023) Supreme People's Court Zhi Min Zai No. 178

[Adjudication Summary] Article 63 of the Trademark Law stipulates the order of calculating damages. When determining the amount of damages, the people's court should prioritize the actual losses of the right holder, the profits obtained by the infringer from the infringement, and reasonable licensing fees as calculation methods. Only when the actual losses, infringement profits, and licensing fees are difficult to determine, statutory damages shall apply.

5. Judgment on Whether Retail Services and "Promoting for Others" Services Constitute Similar Services

[Case No.] (2022) Su Min Zhong No. 356

[Adjudication Summary] Retail services provided by sellers to end consumers, from the perspective of purpose, content, method, and object, are highly similar to "promoting for others" services in Class 35. In the process of providing retail services, unauthorized use of a mark identical to the "promoting for others" trademark in Class 35 is likely to cause confusion or misidentification among the relevant public regarding the source of the services, and should be determined to constitute trademark infringement.

6. Calculation of Contribution Rate and Application of Punitive Damages in Drug Trademark Infringement Cases

[Case No.] (2021) Su 05 Min Chu No. 437

[Adjudication Summary] 1). In drug trademark infringement cases, the contribution rate of the involved mark to the profits of the accused infringing drug should be reasonably determined by thoroughly considering the macroscopic development trends in the pharmaceutical field, the microscopic perspective of consumers purchasing drugs, the different thresholds for entering specific pharmaceutical industries, the technical distinction between original and generic drugs, and the reputation of the pharmaceutical company itself.

2). If the accused infringer, as a shareholder of the right holder and belonging to the same industry, uses a mark similar to the right holder's trademark on the same goods after the termination of the shareholding relationship, and has not ceased the alleged infringing act after an administrative judgment has determined the trademark to be invalid, and the drugs involved are high-alert, easily confused drugs, and the infringing act may endanger human health, it falls under the circumstances of "malicious infringement of exclusive trademark rights with serious circumstances" as stipulated in the Trademark Law, and punitive damages may be applied in accordance with the law.

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