The Supreme People's Court has concluded an appeal case against infringement of patent right of a utility model, clarifying that in patent infringement proceedings where a patent assignment occurs, the qualification of litigation of the original patentee as the plaintiff in the case is not affected. If the defendant is found to have infringed the patent right, the court shall support the original patentee's claim to order the defendant to stop the infringement in accordance with the law, except where the defendant can prove that it has obtained permission from the patent assignee.
Natural person X (the original patentee) filed a lawsuit with the first-instance court, requesting Shenzhen A Company to immediately stop selling and offering for sale goods infringing his patent, and economic compensation and reasonable expenses for right protection.
The first-instance court found that the patent in question was granted to X on January 4, 2019, and transferred to natural person Y, a party unrelated to this case, on January 14, 2022. The assignment was announced by the China National Intellectual Property Administration (CNIPA) on February 25 of the same year. In this case, X requested protection for claim 1 of the patent. He bought the accused infringing product from an online shop following the notarial purchase procedure. Shenzhen A Company confirmed that they sold the accused infringing product.
The first-instance court held that Shenzhen A Company infringed the patent in question. Given that X is no longer the patentee in question, his claim requesting Shenzhen A Company to stop the infringement was not supported. However, X's claim requesting Shenzhen A Company to compensate for economic losses and reasonable expenses for right protection and to bear the litigation costs of this case should be supported with the amount being determined appropriately. X's other claims were rejected.
Shenzhen A Company was dissatisfied with the first-instance judgment and appealed to the Supreme People's Court, requesting the Court to revoke the first-instance judgment and reject all the claims of X.
Upon review, the Supreme People's Court held that there is nothing significantly inappropriate in the first-instance court's discretion on compensation in this case. Although X didn’t appeal against the first-instance judgment’s not ordering Shenzhen A Company to stop the infringement, it was an incorrect application of the laws when the first-instance court, following the regulations in Article 321 of the Judicial Interpretation of the Civil Procedure Law, did not order Shenzhen A Company to stop the infringement. The main analysis is as follows:
Article 249 of the Judicial Interpretation of the Civil Procedure Law stipulates: “During litigation, the transfer of the disputed civil right and obligation does not affect the qualification and status of the litigation subjects. A legally effective judgment or ruling made by a People's Court is binding on the assignee. If the assignee applies to participate in the litigation as a third party without independent request right, the People's Court may allow. If the assignee applies to take the place of the party concerned to undertake litigation, the People's Court may decide whether to allow it according to the concrete case circumstances; in the case that the request is refused, the assignee can be added as a third party without independent request right”. Pursuant to this Article, if the patent is transferred during the litigation of the patent infringement dispute, the qualification of the original patentee as the plaintiff in the case is not affected, and the effective judgment of the case is binding on the patent assignee. Where the court holds that the defendant constitutes the infringement of the patent, the court should support the original patentee's claim to order the defendant to stop the infringement in accordance with the law, except where the defendant can prove that it has obtained permission from the patent assignee.
In this case, after the first-instance trial, the patentee in the case was changed from X to Y. Despite finding that Shenzhen A Company had infringed the patent in question, the first-instance judgment rejected X's claim of stopping the infringement on the ground that the patentee had changed before the first-instance judgment was made. On the one hand, this judgment is not in conformity with the regulations of Article 249 of the Judicial Interpretation of the Civil Procedure Law, because pursuant to this article, all the claims, actions, and consequences of X are extended to Y; and X's claim for stopping the infringement shall not be rejected solely due to the change of the patentee. On the other hand, it may, to some extent, condone the continuation of the infringement, causing damage to the legitimate rights and interests of the patent assignee, which is not in line with the legislative spirit of the Patent Law to protect the legitimate rights and interests of the patentee and encourage invention-creation. However, considering that X has recognized in the second instance that the relevant link of the accused infringement products on the website has been removed, no additional judgment for stopping the infringement was added. The final judgment rejects the appeal and upholds the original judgment.
The clear rule established in this second-instance judgment is helpful to ensure the smooth progress of the litigation proceedings and provide full protection for the legitimate rights and interests of the patentee.
(2022) Zui Gao Fa Zhi Min Zhong No. 1923
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