Recently, the Intellectual Property Court of the Supreme People's Court, in a dispute over infringement of an integrated circuit layout-design, rendered a second-instance judgment clarifying that, in the trial of integrated circuit layout-design infringement cases, where the alleged infringer contends that the layout-design at issue does not meet the statutory conditions, the court may - even if the alleged infringer has not initiated cancellation proceedings - examine in accordance with law whether the layout-design has a basis of right and whether it should be protected in the infringement litigation. In this case, the evidence on record supports a finding that the layout-design at issue was applied for registration more than two years after the time of its first commercial exploitation, failing to meet the registration conditions set out in Article 17 of the Regulations on the Protection of Integrated Circuit Layout-Designs, and the People's Court does not grant it protection.

In this case, Ze Company is the right holder of the layout-design at issue, and it contended that the layout-design of the accused infringing chip products manufactured and sold by Xin Company and Chi Company was identical to the layout-design at issue in all four original points. At first instance, Chi Company argued that it had not actually participated in the manufacture and sale of the accused infringing chips, and did not dispute that the layout-design of the accused infringing chips was identical to the layout-design at issue in all four original points; Xin Company also acknowledged Ze Company's contention. On this basis, the first-instance court found that the layout-design of the accused infringing chips had copied the layout-design at issue. At the same time, the first-instance court supported Xin Company's request to apply the "existing layout-design" defence, holding that the layout-design of the accused infringing chip was an "existing layout-design" as provided in the Guidelines for Examination and Enforcement of Integrated Circuit Layout-Designs (Trial) (hereinafter the "Layout-Design Enforcement Guidelines"), and therefore that the accused acts of Xin Company and Chi Company did not infringe Ze Company's exclusive right in the layout-design at issue, and rendered judgment dismissing Ze Company's claims.

On second instance, the Supreme People's Court held: as to the "existing layout-design" provided in the Layout-Design Enforcement Guidelines, it should be a layout-design that the public could know before the filing date or the date of first commercial exploitation (whichever is earlier), and it may be used to assess the originality of a layout-design; however, there is currently no clear provision on which a non-infringement defence may be based thereon. Moreover, the guidelines are in nature a normative document and are not suitable to serve directly as the basis for a People's Court to make a civil adjudication. Nevertheless, in this case the evidence on record supports a finding that the layout-design at issue was applied for registration more than two years after the time of its first commercial exploitation, failing to meet the registration conditions set out in Article 17 of the Layout-Design Regulations, and it should not be protected.

The second-instance judgment pointed out that a layout-design undergoes only a preliminary examination at the time of registration, and whether it substantively meets the statutory conditions can often be determined only in litigation, when a party raises an objection or defence, based on the parties' evidence. Where the alleged infringer contends that a layout-design that the right holder has registered does not meet the statutory conditions, the court may conduct a reasonable examination of whether the layout-design has a basis of right and whether it should be protected in the infringement litigation, without needing to wait for, or require, the alleged infringer to initiate cancellation proceedings. The examination conducted by the People's Court in such circumstances is not a direct determination of whether the layout-design right should be cancelled, but merely a disposition of whether the registered layout-design can obtain judicial protection in the infringement litigation. If, after examination, the People's Court finds that the layout-design asserted does not meet the statutory conditions and has serious defects of right, it should not grant protection in the infringement litigation.

Source: Intellectual Property Court of the Supreme People's Court, 2026-09-04. Original: https://ipc.court.gov.cn/zh-cn/news/view-6024.html