In the absence of corroborating evidence, the "date of production" indicated on the nameplate of a prior design as physical evidence generally cannot be directly determined as the "disclosure date through sale" or the "disclosure date through use."
Fujian A Company is the patentee of the design patent for a fully automatic block forming machine (T10VA). On August 20, 2020, Company B in Gaotang County requested the CNIPA to declare the patent entirely invalid, citing as a primary reason that the patent did not comply with the provisions of Article 23, Paragraphs 1 and 2 of the Patent Law as amended in 2008. On April 26, 2021, the CNIPA issued a decision on the case, stating: Upon verification, Evidence 6 shows no apparent formal defects. Based on Evidence 6, it can be confirmed that there was a block forming machine in a production workshop near the village committee of a village in Hebei Province. Regarding the date of production of the machine, since the nameplate on the machine is technically detachable, and in the absence of other corroborating evidence such as sales contracts, invoices, delivery notes, warranty cards, or maintenance records, it is difficult to ascertain a definitive correspondence between the information on the nameplate and the machine itself. Therefore, the date of production of the machine cannot be determined solely based on the nameplate. Consequently, the design of the block forming machine shown in Evidence 6 cannot be considered a prior design for this patent. Company B's argument regarding using Evidence 6, in combination with other evidence, to assess whether the patent complies with Article 23, Paragraph 2 of the Patent Law, was deemed invalid. As a result, the CNIPA decided to uphold the validity of the patent.
The first-instance court issued an administrative judgment dismissing Company B's claims. Dissatisfied, Company B filed an appeal. On September 14, 2023, the Supreme People's Court issued a final administrative judgment, dismissing the appeal and upholding the original judgment.
The effective judgment of the court held that Article 23, Paragraph 4 of the Patent Law stipulates: "The prior design referred to in this Law means any design known to the public before the date of filing in China or abroad." The phrase "known to the public" refers to a state where the design is available for public access at their wish, regardless of whether the public has actually known it. Means of making a design available to the public include "publication" and "other forms of disclosure" (such as use, sale, or exhibition). In this case, whether the design of the machine in Evidence 6 could be considered a prior design for the patent involved two issues: 1) whether the nameplate on the machine could be accepted as credible evidence, and 2), if the nameplate were accepted, whether the date of production "August 29, 2014" recorded on the nameplate could be identified as the date the machine's design was made known to the public.
First, regarding the credibility of the nameplate on the machine, the contested decision held that since the nameplate is technically detachable, and in the absence of other corroborating evidence such as sales contracts, invoices, delivery notes, warranty cards, or maintenance records, it was difficult to establish a definitive correspondence between the information on the nameplate and the machine. Additionally, Fujian A Company argued that the information on the nameplate was contradictory and that counterfeit block forming machines were prevalent, and it had not sold such equipment to Hebei Province. The court, however, ruled that the nameplate on the machine should be accepted as credible. On one hand, the facts regarding which entity sold the machine to another and which entity currently possesses and uses it are unrelated to the credibility of the nameplate. In other words, sales contracts, invoices, and delivery notes are irrelevant to determining the authenticity of the nameplate. On the other hand, although the nameplate is technically detachable, considering that the nameplate is a form of an identification marker for large machinery and is designed to be permanently fixed in terms of installation location and fixation methods, it is difficult to remove and replace it without leaving traces, which is different from machine components that are consumables and require replacement. Moreover, regarding the allocation of the burden of proof, Company A should bear the burden of proof if the nameplate has been removed and replaced, however, Company A did not provide any evidence or a reasonable explanation regarding this issue throughout the invalidation proceedings, the first-instance trial, and the second-instance trial. Furthermore, regarding Fujian A Company's claim that they did not sell block forming machines to Hebei Province and that the manufacture serial number (T10A) on the nameplate contradicted the equipment model (T10VA), the court noted that machinery is movable property and can be legally transferred. Thus, even if Fujian A Company did not sell this model of machine to Hebei, this alone does not prove that the machine in Evidence 6 was counterfeit. As for the alleged contradiction between the manufacture serial number (T10A) and the equipment model (T10VA), the full manufacture serial number was T10A14015, indicating a different format rule for manufacture serial numbers compare to equipment models, but the shared element "T10" is consistent. Yet, Fujian A Company did not provide evidence or a reasonable explanation regarding how they produced nameplates for its block forming machines or how manufacture serial numbers were assigned. In summary, in combination with Fujian A Company's admission during the second-instance trial that it had been selling T10VA block forming machines on the market since 2014, the nameplate on the machine should be accepted as credible.
Second, regarding whether the date of production "August 29, 2014" recorded on the nameplate could be identified as the date the machine's design became known to the public, Company B argued on appeal that the date of production on the nameplate is the publication of the machine's design. However, the court held that the concept of "date of production" primarily pertains to Product Quality Law, and is used for warranty period calculations and carries no specific legal significance in Patent Law. It cannot be simply equated to the "disclosure date through sale" or the "disclosure date through use" and must be assessed based on the specific cases.
In this case, the T10VA block forming machine is a large piece of equipment that requires transportation, assembly, and other processes after manufacture before its design can be fully presented and available to the public at their wish. Therefore, on one hand, the date of production on the nameplate does not indicate that the block forming machine had been assembled and presented in its complete form by that date, so it cannot be deemed the "disclosure date through sale." On the other hand, the filing date of the patent is December 26, 2014, and Company B provided no evidence proving that the machine in Evidence 6 was assembled and put into use before the patent's filing date. Thus, the date of production on the nameplate cannot be deemed the "disclosure date through use." Consequently, based on the totality of evidence in this case, the date of production "August 29, 2014" recorded on the nameplate cannot be determined as the date the machine's design was made known to the public.
In conclusion, the design of the machine in Evidence 6 cannot be considered a prior design for this patent in the invalidation proceedings.
(2022) Zui Gao Fa Zhi Xing Zhong No. 393
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