The Supreme People's Court, in a second-instance judgment concerning a dispute over an administrative ruling on a utility model patent infringement, clarified that where if the patent on which the infringement claim is based is declared invalid in a subsequent administrative decision that has taken legal effect, the prior administrative ruling that affirmed patent infringement shall be revoked on the ground that the factual basis for the ruling no longer exists.
This article involves two administrative decisions made in sequence. The case is summarized as follows:
1) Prior Administrative Ruling: A ruling made by the local patent enforcement authority at the place where the infringement occurred, which affirmed the existence of patent infringement.
2) Subsequent Administrative Decision: A decision on the invalidation of the patent in question, issued by the China National Intellectual Property Administration (CNIPA).
Patentee A has a utility model patent Patentee A requested the local intellectual property bureau to investigate a patent infringement matter, alleging that products manufactured by Company B infringed its patent at issue. After investigation, the local intellectual property bureau made an administrative ruling (hereinafter referred to as the “prior administrative ruling”), determining that Company B manufactured, sold, and offered to sell products infringing the patent at issue, and ordered Company B to immediately cease such acts.
Company B was dissatisfied with the administrative ruling and instituted a lawsuit. The first-instance court in its judgment dismissed Company’s lawsuit. Company B then appealed the first-instance judgment.
The Supreme People's Court, in its second-instance judgement, found that: after the infringement ruling was issued, Company B filed an invalidation request against the patent at issue with the CNIPA. The CNIPA later made a decision (the “subsequent administrative decision”), declaring the patent at issue entirely invalid. A was dissatisfied with this decision and filed an administrative lawsuit with the Beijing Intellectual Property Court, and the Court dismissed A's lawsuit. A did not appeal, and thus the subsequent invalidation decision became effective. Therefore, the second-instance court held that since the patent on which A based its claims had been declared invalid during the second-instance proceedings, the factual basis for both the prior sued administrative ruling and the first-instance judgment no longer existed. Therefore, the second-instance court revoked the first-instance judgment and the prior administrative ruling.
Through the above judgment, the Supreme People’s Court clarified the handling principle for intersecting administrative proceedings involving patent infringement and patent invalidation: “If the patent enforcement authority makes an administrative decision affirming infringement, and the relevant patent is subsequently definitively declared invalid, then that administrative decision shall be revoked.”
(2023) Zui Gao Fa Zhi Xing Zhong No. 1029
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