The Supreme People’s Court solved an appeal case over the infringement of the exclusive right of an integrated circuit layout design, which involved the judgment of protection subject of the exclusive right of the layout design that does not contain an active component and the determination of commercial utilization of the layout design.
Company A filed a lawsuit claiming that through public research, it found that there were product manuals of the alleged infringing chip online, containing the watermark of Company B, and that the content of manuals was completely copied from the product specifications of its chip enjoying the layout-design right (the protected layout design). By comparing the layout design of the accused infringing chip to the protected layout design, it found that the layout design of the accused infringing chip manufactured and sold by Company B is completely identical to the protected layout design. Thus, Company A deemed that Company B’s infringement caused major damages to Company A and requested the Court to order Company B to immediately cease the infringement of Company A's exclusive right to the integrated circuit layout design, destroy the accused infringing products, and compensate Company A for economic losses. Company B argued in the first instance that Company A's exclusive right to the protected layout design does not comply with the relevant provisions of the "Regulations on the Protection of Layout-Designs of Integrated Circuits" (hereinafter referred to as the "Layout Design Regulations") and should be revoked. Firstly, based solely on the 12 layers submitted by Company A, it is not possible to present the three-dimensional configuration of the active component, which does not comply with the provisions of Article 2, Paragraph 2 of the Layout Design Regulations. Secondly, the application date of the protected layout design is October 24, 2017, and the commercial utilization time of the chip corresponding to the protected layout design is earlier than October 24, 2015, i.e. two years before the application date, which does not comply with Article 17 of the Layout Design Regulations. Thirdly, all of the 9 original points claimed by Company A cannot be established, and the protected layout design lacks originality.
The first-instance court found that the layout design is owned by Company A and filed on October 24, 2017. The registered sample of the layout design has 12 layers in total, and the first-instance court obtained the electronic layout design of Company A from the China National Intellectual Property Administration (CNIPA). Company B recognized that the accused infringing chip was a chip product produced by it, and confirmed that the layout design of the accused infringing chip was basically the same as the layout design that Company A registered in the CNIPA. However, Company B argued that the layout design of the accused infringing chip was achieved through reverse engineering.
The first-instance court held that: When determining whether the accused act constitutes infringement, the first step is to determine the protection scope of the protected layout design. The protected layout design should meet the three-dimensional configuration for layout designs being components and circuits and have at least one active component. The layout design submitted by Company A for registration does not contain any active components and does not meet the basic definition of layout design. Although the layout design has obtained exclusive rights and is still in a valid state, it cannot be the subject of exclusive rights to the layout design, nor be protected by exclusive rights to the layout design because it does not belong to a three-dimensional configuration of components and circuits for performing certain electronic functions. Therefore, the court ruled to dismiss the lawsuit request of Company A.
Company A was dissatisfied and filed an appeal.
The Supreme People's Court additionally found in the second instance that Suzhou C Company submitted an "Explanation on Chip Commissioned Processing Units" to the first-instance court, which recorded that Suzhou C Company delivered 25 batches of protected layout design chip wafers to Company A from March 24, 2014 to October 13, 2015. Even if the batches required for the tape-out stage are excluded, and other batches are calculated based on the industry practice of 25 wafers per batch and 7000 chips per wafer, the total number of chips should be around 3 million.
The Supreme People's Court holds that although the 12-layer layout design submitted by Company A does not contain active components, it shows the three-dimensional configuration relationship between active components and circuits, thus clarifying its interface with active components. In the case of using standardized components from wafer factories, the protected layout design can already achieve the corresponding circuit functions. Therefore, it can be deemed that the protected layout design belongs to a three-dimensional configuration of a circuit with two or more components, at least one of which is an active component, and all or part of them are interconnected.
Rule 17 in the Layout Design Regulations stipulates that where no application for the registration of any layout-design has been filed with the intellectual property administration department of the State Council within two years from the date on which it was first commercially exploited anywhere in the world, the intellectual property administration department of the State Council shall refuse to register such a layout-design. In this case, Company A continuously commissioned Suzhou C Company to manufacture chips containing the protected layout design from March 24, 2014 to October 13, 2015. Based on the numbers of commissions and chip quantities, it is evident that the number of commissions exceeded the requirements for tape out. Therefore, it should be determined that the protected layout design was put into commercial use before October 24, 2015. The layout design registered by Company A cannot be protected in this case due to serious defects in its right.
The second instance judgment of this case has a certain reference value for further clarifying the trial ideas of integrated circuit layout design infringement cases and is also conducive to the development of the chip industry and the orderly competition of related enterprises in good faith.
(2022) Zui Gao Fa Zhi Min Zhong No. 2133
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