(Adopted on 19 June 2001 at the 1180th Meeting of the Adjudication Committee of the Supreme People's Court)

With a view to correctly adjudicating patent dispute cases, in accordance with the legal provisions of the General Principles of the Civil Law of the People's Republic of China (hereinafter General Principles of the Civil Law), the Patent Law of the People's Republic of China, (hereinafter Patent Law), the Civil Procedure Law of the People's Republic of China and the Administrative Procedure Law of the People's Republic of China and other laws, the following regulations are made:

 

Article 1

The people's courts accept following cases of patent disputes:

1. Patent entitlement cases;

2. Patent ownership cases;

3. Patent and patent application assignment dispute cases;

4. Patent infringement cases;

5. Patent counterfeiting cases;

6. Disputes over the fee use of a patent after publication of the application for a patent for invention and before the patent grant;

7. Disputes over the reward and remuneration for the inventor-creators of service inventions or designers;

8. Pre-action applications for ceasing infringement or for property preservation;

9. Disputes over the qualifications of inventors or designers;

10. Cases of dissatisfaction with the re-examination decisions of the Patent Re-examination Board to uphold rejection of applications;

11. Cases of dissatisfaction with the re-examination decisions by the Patent Re-examination Board on requests for invalidation of the patent right;

12. Cases of dissatisfaction with decisions by the Patent Administrative Organ under the State Council on execution of compulsory licenses;

13. Cases of dissatisfaction with the adjudication by the Patent Administrative Organ under the State Council on the use fees for execution of compulsory licenses;

14. Cases of dissatisfaction with the administrative re-examination decisions by the Patent Administrative Organ under the State Council;

15. Cases of dissatisfaction with the administrative decisions by the administrative authorities for patent affairs; and

 16. Any other patent dispute cases.

Article 2

Patent dispute cases of first instance shall be under the jurisdiction of the intermediate people's courts of the seats of the People's Government of the Provinces, Autonomous Regions and Municipalities directly under the Central Government and intermediate people' courts designated by the Supreme People's Court.

Article 3

Where any party dissatisfied with a re-examination decision made by the Patent Re-examination Board after 1 July 2001 on the requests for revocation of a patent for utility model or design, institutes a lawsuit in the people's court, the people's court will not accept it.

Article 4 

Where any party dissatisfied with a re-examination decision made by the Patent Re-examination Board after 1 July 2001 to uphold the rejection of the application for patent for utility model or design or with the decision on the request for invalidation of the patent right for utility model or design, institutes a lawsuit in the people's court, the people's court shall accept the lawsuit.

Article 5

Lawsuits instituted against acts of patent infringement shall be under the jurisdiction of the people's court of the place where the defendant has its domicile or the place of infringement. Places of infringement include: places where acts take place of manufacturing, using, offering for sale, selling or importing products accused of infringing a patent for invention or utility model; places where the acts of using a patented process takes place and where acts take place of using, offering for sale, selling or importing products acquired directly according to the patented process; places where acts of manufacturing, selling or importing products of patented designs; places where acts of counterfeiting patents of other persons take place.  Places where consequences of the preceding infringing acts arise.

Article 6 

Where a plaintiff takes action against the manufacturer of an infringing product, but not against the seller and the places where the infringing products are manufactured and sold are not the same place, the people's court of the place of the manufacture has jurisdiction; where the action is taken with both the manufacturer and seller as the co-defendants, the people's court of the place of sale has jurisdiction.

Where the seller is a subordinate organisation of the manufacturer and the plaintiff takes action against the acts of the manufacturer of the infringing products to manufacture and selling the product, the people's court of the place of sale has jurisdiction.

Article 7

Where a plaintiff institutes an infrigement lawsuit in relation to infringement of a process invention patent granted for a patent application filed before 1 January 1993, jurisdiction is determined by reference to the provisions of Articles 5 and 6 of these Provisions.

The people's court, in the substantive hearing of the preceding case, shall apply the rule that a process invention patent does not extend to the product.

Article 8

Any plaintiff who takes action for infringement of a utility model patent shall when filing the suit produce a search report made by the Patent Administrative Organ under the State Council.

Any defendant to a case of infringement of a utility model patent or external design who requests a stay of the action shall within the time limited for filing a defence, file a request for invalidation of the plaintiff's patent right. 

Article 9

In a case accepted by the people’s court for infringement of a utility model patent or external design, where the defendant files a request for invalidation of the patent right within the time limited for filing a defence, the people's court shall stay the proceedings. However, under any one of the following circumstances, the legal proceedings may [decide] not [to] stay the proceedings:

(1)    where in the search report produced by the plaintiff that there is not discovered any technical documentation to lead to the loss of novelty or inventiveness of the patent or utility model;

(2)    where the evidence submitted by the defendant is sufficient to prove that the technology it uses was already common knowledge;

(3)    where the evidence or grounds the defendant has submitted for requesting the invalidation of the patent right in question is obviously insufficient; or

(4)     any other circumstances where the people's court considers that the proceedings should not be stayed.

Article 10

In a case accepted by a people’s court for infringement of a utility model or external design, where the defendant files a request for invalidation of the patent right in question after the expiration of the time for making defence, the people's court shall not stay the proceedings, except where after examination it considers it is necessary to stay the proceedings.

Article 11

Where in a case accepted by a people’s court for infringement of an invention patent or for a case of infringement of a utility model patent or external design where the Patent Re-examination Board has upheld the patent right, the defendant has within the period for filing a defence files an application to invalidate the patent, the people's court may decline to stay the proceedings.

Article 12

Where the people's court decides to stay the proceedings, the patentee or the related injured party requests for an order that the defendant cease the relevant act or for taking other measures to stop the spread of damage caused by the infringement and provides security, the people's court, upon consideration, finds it in compliance with the provisions of the relevant laws, the people's court may at the same time as deciding to stay the proceedings make a related ruling.

Article 13

Where the people's court conducts property preservation in relation to a patent right, it shall send the Patent Administrative Organ under the State Council a notification for assistance in execution of the property preservation, indicating the matters for which assistance is sought and the duration of the patent right preservation, with the people's court written decision attached.

The period for patent right preservation that shall not last more than six months for each occasion, the term is counted from the date the Patent Administrative Organ under the State Council receives the notification of assistance for execution. If it is still necessary to continue to take measures for patent right preservation, the people's court shall serve the Patent Administrative Organ under the State Council with the notification of assistance for executing the continued preservation before the expiration of the time limit fixed for the preservation. Where such notification is not served before the expiration of the time limit fixed for the preservation, the property preservation of the patent right will be deemed to have been automatically cancelled.

The people's court may take the property preservation measures for pledged patent rights, the pledgee's priority of compensation is not affected by the preservation measure; the exclusive licensing contract concluded between the patentee and the licensee does not affect the people's court's conduct property preservation of a patent right.

The people's court shall not preserve a second time a patent right that has already been preserved.

Article 14

Where in respect of any invention-creation completed before 1 July 2001 by making use of the material and/or technical conditions of the entity to which the inventor or creator belongs, and the entity and the inventor or creator has concluded a contract, making provision for the ownership of the right to apply for patent and of the patent right, the provisions shall be observed.

Article 15

The people's court in any case accepted for patent infringement where there is a conflict of rights, should protect the legitimate rights and interests of the party that enjoys the prior right according to law.

Article 16

The prior legitimate rights referred to in Article 23 of the Patent Law include: trademark rights, copyright, enterprise name rights, portrait rights and the right to use the well known packaging or decorations of goods, etc.

Article 17

“The extent of protection of the right for invention or utility model shall be determined by the terms of the claims. The description and the appended drawings may be used to interpret the claims" mentioned in Article 56(1) of the Patent Law means that the scope of protection of patent right should be determined based on the necessary technical features expressly stated in the claims, and also includes the scope as determined by the features equivalent to the necessary technical features.

The equivalent features refer to the features which uses substantially the same means, perform substantially the same function and produce substantially the same results and which can be contemplated by an ordinarily skilled person in the art without inventive labour. 

Article 18

Where any act of patent infringement takes place before 1 July 2001, the provisions Patent Law before amendment shall apply when seeking civil liability; where such act takes place after 1 July 2001, the provisions of the amended Patent Law shall apply to seek civil liability.

Article 19

Where there is counterfeiting of another person's patent, the people's court may impose civil liability in accordance with the provisions of Article 58 of the Patent Law. Where the administrative authority for patent work does not impose any administrative penalty, the people's court may impose civil penalty pursuant to the provision of Article 134(3) of the General Principles of the Civil Law, and the amount of the applicable fine in civil terms may be determined by reference to the provisions of Article 58 of the Patent Law.

Article 20

When the people's court imposes liability for compensation on the infringer according to the provision of Article 57(1) of the Patent Law, it may, in accordance with the request of the right holder, determine the amount of compensation according to the losses suffered by the right holder due to the infringement or the profit made by the infringer from the infringement.

The losses suffered by the right holder due to the infringement may be computed by the total of the infringing products sold in the market times the reasonable profit of each infringing product. Where it is difficult to determine the total reduction in the volume of sale by the right holder, the total of the infringing products sold in the market times the reasonable profit of each infringing product may be deemed to the losses suffered by the right holder due to the infringement.

The profit of the infringer from the infringement may be computed according to the total of infringing products sold in the market times the reasonable profit of each infringing product.  The profit of the infringer from the infringement is generally calculated according to the business profit of the infringer. As for the infringer who solely engages in infringement as its entire business, the profit may be computed according to its sales profit.

Article 21

Where the losses of the infringee or the income of the infringer is difficult to determine, the people's court may, where there is a patent royalty that may be referred to, determine the reasonable amount of compensation according to the kind of patent right involved, the nature and facts of the infringement by the infringer, the amount of the patent royalty, the nature, extent and time of the patent license with reference to one to three times the patent licensing fee; where there is no patent licensing fee to be referred to or the license fee is obviously unreasonable, the people's court may, according to the factors, such as the kind of the patent right, the nature and facts of the infringement, determine the amount of compensation of more than RMB 5,000 yuan and less than RMB 300,000 yuan, but not exceeding RMB 500,000 yuan at most.

Article 22

The people's court may, on the request of the right holder or according to the specific facts of a case, include the reasonable expenses paid for investigation or for stopping the infringement in the amount of compensation.

Article 23

The limitation period for bringing action against patent right infringement is two years, computed from the date when the patentee or the related injured party knew about or had reasonable grounds to know about the infringing act. Where the right holder does not take action after two years and the infringing act is continuing when action is taken, the people's court shall, within the term of validity of the patent right in question, rule that the defendant desist from infringing acts, and the amount of compensation for the infringement shall be computed from two years before the date when the right holder instituted legal proceedings in the people's court.

Article 24

The offering for sale referred to in Articles 11 and 63 of the Patent Law means showing willingness to sell by way of advertisement, shop window display or exhibition.

Article 25

Where the people's court accepts a case of dispute arising from patent infringement in which the administrative authority for patent affairs has made a determination of infringement or non-infringement, the people's court should still carry out comprehensive examination in accordance with the litigation requests of the parties.

Article 26

Where there is any discrepancy between previous relevant judicial interpretations and these Provisions, these Provisions shall prevail.