— (2024) Zui Gao Fa Zhi Min Zhong No. 1193

The Intellectual Property Court of the Supreme People's Court concluded a dispute over infringement of an invention patent, holding that where the accused infringer, after purchasing patented products from a third party through legitimate channels, replaced the trademark on the patented products with its own trademark, publicly claimed that the products were self-developed and self-manufactured, and sold them, such conduct — since it made no substantive change to the technical solution of the legitimately sold patented products and did not involve any process of implementing or reproducing the patented technical solution — does not constitute manufacturing within the meaning of the Patent Law, but rather falls within the application of patent right exhaustion and does not constitute patent infringement. Whether such conduct infringes trademark rights should be analyzed and determined under the Trademark Law. The court therefore reversed the first-instance judgment and dismissed all claims of the patentee's side.

This case involves an invention patent entitled "Antibody against Novel Coronavirus, Reagent and Kit for Detecting Novel Coronavirus" (the "patent in question"). Claims 2, 6 and 7 of the patent protect "an antibody against the novel coronavirus or its N protein, or a functional fragment thereof," the antibody being an important raw material for producing reagents or kits for detecting the novel coronavirus or its N protein. Fei Company Ltd. ("Fei Company") is the exclusive licensee of the patent. It sued, alleging that Hangzhou Hua Company Ltd. ("Hua Company"), without authorization and for production and business purposes, manufactured, sold and offered to sell the "Model M9062 2019-CoV NP antibody" (the "accused infringing product"), infringing the patent on a large scale with substantial profits, and requested the court to order Hua Company to cease the infringement and pay damages and reasonable expenses of RMB 30.24 million. Hua Company argued that the accused infringing products were genuine COV19-PS-MAb1 patented products purchased from Fei Company through a third party, which Hua Company relabeled with its own trademark and renamed before reselling, and that this fell under patent exhaustion and did not constitute patent infringement.

The court found through trial that the accused infringing products purchased by Fei Company under notarization all bore Hua Company's trademark, and that Hua Company claimed on its official website that the accused infringing products were developed and manufactured by itself. The evidence on file showed that all the accused infringing products sold by Hua Company had been purchased from Fei Company through a third party, and that the quantity Hua Company sold was less than the quantity it had purchased from the third party. The "Monoclonal Antibody De Novo Sequencing Analysis" issued by a third-party testing institution showed that the sequence of the accused infringing product had 100% light-chain and heavy-chain coverage with mutation combination 58 in claim 2 of the patent.

The court of first instance held that, considering that Hua Company claimed on its website that the accused infringing products were independently developed, marked the goods with its own trademark, and that its business license included the processing of biological reagents — thus holding itself out as the manufacturer — the accused conduct constituted manufacturing and did not fall within the circumstances not deemed patent infringement. It therefore ordered Hua Company to cease the infringement and pay RMB 60,000 in damages and RMB 140,000 in reasonable expenses. Hua Company appealed.

Upon trial, the Supreme People's Court held that Hua Company's patent exhaustion defense was established and the accused conduct did not infringe the patent, mainly for the following reasons. First, under the relevant provisions of the Patent Law, after the patentee or an entity licensed by the patentee sells a patented product, the accused infringer's subsequent use, offer for sale, sale or import of that product is not deemed patent infringement. Even if the accused infringer resells the legitimately sold patented product directly or after simple repackaging and relabeling, it should not be found to have carried out the act of manufacturing under Article 11 of the Patent Law merely on the basis of relabeling or publicly claiming the product as self-developed. Second, the accused infringing products in this case originated from Fei Company, the exclusive licensee of the patent; Hua Company obtained the patented product COV19-PS-MAb1 through legitimate channels and paid reasonable consideration; Fei Company had received reasonable consideration; and the evidence showed that the quantity Hua Company sold did not exceed the quantity it purchased. Third, Hua Company's acts with respect to the accused infringing products constituted resale rather than manufacturing, meeting the conditions for applying the exhaustion rule under the Patent Law. Although Hua Company affixed its own trademark to the outer packaging of the reagents it sold, the patented technical solution was already embodied in the product when Hua Company obtained Fei Company's patented product, and Hua Company's conduct did not re-implement or reproduce the patented technical solution. Therefore, the accused conduct did not constitute manufacturing under Article 11 of the Patent Law, but only resale, falling within Item 1 of Article 75 of the Patent Law, which provides circumstances not deemed patent infringement. Whether Hua Company's replacement of the trademark infringed Fei Company's other civil rights was beyond the scope of this case, and the parties may separately assert their rights in accordance with law.

This case makes clear that, in trying disputes over infringement of invention patents, acts such as "labeling," "relabeling" or "claiming self-development and self-manufacture" on legitimately purchased patented products should not be uniformly found to constitute manufacturing under Article 11 of the Patent Law; rather, courts should examine, in light of the specific circumstances, whether the accused infringer's disposal of the patented products re-implemented or reproduced the patented technical solution. Whether such conduct infringes trademark rights should be analyzed and determined under the Trademark Law.

Source: Intellectual Property Court of the Supreme People's Court. Authors: Du Guoshun, Shu Jinxi. Date of original: August 1, 2026. Original link: https://ipc.court.gov.cn/zh-cn/news/view-5976.html