The Supreme People's Court resolved an appeal case involving an administrative dispute over the revocation of an integrated circuit layout design. In the case, the Court clearly stated that intellectual property rights, as civil rights, must be acquired, exercised, and disposed of in accordance with the principle of good faith. If the owner of a layout design right seriously violates the principle of good faith in the application for registration, they shall bear the adverse consequences.
An invalidation petitioner requested the CNIPA to revoke the layout design right for Integrated Circuit Layout Design M (hereinafter referred to as "the present layout design") owned by Company A. The primary argument was that a reference Layout Design N was a conventional design completed before the date of completion of the present layout design and was identical to it. Therefore, the present layout design did not meet the requirements of Article 4 of the Regulations on Layout Designs and lacked originality. The CNIPA issued the contested decision, revoking the exclusive right to the present Layout Design. Dissatisfied, Company A filed a lawsuit with the first-instance court, requesting the revocation of the contested decision and an order for the CNIPA to reissue a decision.
The first-instance court found that: 1) The present layout design M had a date of application of October 23, 2009, a registered date of completion of January 22, 2009, and a date of first commercial use of May 3, 2009. 2) The reference Layout Design N, owned by Company B, had a date of application of February 2, 2010, a registered date of completion of August 6, 2008, and a date of first commercial use of January 5, 2009.
The first-instance court held that, to determine the originality of a layout design, the completion date of that layout design should be the reference point for assessment. Since a layout design is inevitably completed when it is commercially utilized or registered, when the exact date of completion cannot be determined, the date of first commercial use or the date of application may be presumed as the date of completion. In this case, although Layout Design N registered a date of completion and a date of first commercial use, these dates were self-reported by Company B without supporting evidence. Evidence submitted by Company A showed that Company B was established on November 20, 2009, which was after the date of first commercial use of January 5, 2009 reported in the registration application for Layout Design N. Company B also stated that it had not conducted any development or preparation work for integrated circuit layout designs before its establishment. Therefore, the first-instance court found that the evidence was insufficient to prove the authenticity of the date of first commercial use reported in the registration application for Layout Design N. Since an earlier date of completion makes it easier to establish originality, and in the absence of evidence proving the actual date of completion or commercial use date of Layout Design N, only its date of application (February 2, 2010) could be presumed as its date of completion. The date of first commercial use of the present layout design M was May 3, 2009, and its date of application was October 22, 2009, both of which predated the date of application of the reference Layout Design N. There was no evidence proving that Layout Design N was publicly known before the date of application of the present layout design. Therefore, Layout Design N could not be considered a prior design against the present layout design. The contested decision, which evaluated the originality of the present layout design based on Layout Design N, lacked factual and legal basis. The first-instance court ruled in favor of Company A, revoking the contested decision and ordering the CNIPA to reissue a decision.
Dissatisfied with the first-instance judgment, both the CNIPA and the invalidation petitioner appealed to the Supreme People's Court.
The Supreme People's Court held in the second-instance judgment that: The date of completion and date of first commercial use reported in the layout design registration application have significant legal implications. However, these dates are self-reported by the applicant, and the CNIPA does not conduct substantive examination on them. This requires applicants to adhere to the principle of good faith, fulfill their obligation to report truthfully, and ensure the comprehensive, accurate, and truthful declaration of information to uphold the publicity and certainty of the layout design registration system. In this case, Company B and Company A were affiliated companies. Knowing that the subject matter of Layout Design N was identical to the previously registered Layout Design M, they successively applied for and obtained exclusive rights to both layout designs, with Company B acknowledging the facts and providing assistance in the process. This directly demonstrated that Company A and Company B colluded to abuse the integrated circuit layout design legal system through false declarations, fraudulently obtaining the exclusive rights to Layout Design N. At the same time, it also cast substantive doubt on the authenticity of the date of completion and date of first commercial use of Layout Design M.
As a civil right, the acquisition, exercise, and disposition of intellectual property must comply with the principle of good faith. The principle of good faith, as a fundamental principle of a rule-of-law society, should also apply to administrative legal relationships. In this case, Company A, the owner of the previously registered layout design, colluded with Company B to apply for and obtain registration of an identical layout design under Company B's name. This constituted a clear act of deception against the CNIPA and the public, evidently violating the principle of good faith and rendering the dates of completion and dates of first commercial use of both registered layout designs unreliable. In such circumstances, an adverse determination should be made against Company A, the right owner of the present layout design, meaning that the present layout design should not be protected, and Company A should bear the adverse consequences of the revocation of the exclusive rights to the layout design. In conclusion, the appeals of the CNIPA and the invalidation petitioner were well-founded and should be upheld. The Supreme People's Court revoked the first-instance judgment and ruled against Company A's claims. Whether the exclusive rights to Layout Design N should also be revoked falls outside the scope of this case and may be addressed separately by the CNIPA in accordance with the law.
The second-instance judgment clarified that the acquisition, exercise, and disposition of intellectual property must comply with the principle of good faith. As a fundamental principle of a rule-of-law society, the principle of good faith should also apply to administrative legal relationships. Intellectual property obtained through serious violations of the principle of good faith should not be protected. This case has a guiding significance for upholding the principle of good faith in the field of intellectual property.
(2022) Zui Gao Fa Zhi Xing Zhong No. 472
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