SUPREME PEOPLE'S COURT OPINION ON CERTAIN ISSUES WITH RESPECT TO INTELLECTUAL PROPERTY JUDICIAL ADJUDICATION UNDER THE CURRENT ECONOMIC SITUATION
April 21, 2009
The Higher People’s Courts of all provinces, autonomous regions, directly controlled municipalities, PLA Military Courts, the Production and Construction Corps Branch of the Higher People's Court of Xinjiang Uygur Autonomous Region:
Now the "Supreme People's Court Opinion on Certain Issues with Respect to Intellectual Property Judicial Adjudication Under the Current Economic Situation" is issued to you, please actually and seriously implement it during trial work.
At present, our countries’ national economy is maintaining steady and rapid development, reform and opening are being further promoted, social undertakings are developing fast and people's lives are further improving, but at the same time we also face serious difficulties and challenges. To better implement the "two sessions" spirit, the implementation of national intellectual property strategy, and to allow intellectual property trials during international financial crisis to better serve to respond effectively and to promote stable and rapid economic development of the overall situation, in order to make more positive contributions “to maintain economic growth and maintain the people's livelihood and maintaining stability” and under the current economic situation to handle better a number of issues in intellectual property trial work by the people's courts, we issue the following opinion:
I. Based on actuality, with a prominent focus, strive hard to enhance the overall relevance and effectiveness of intellectual property adjudication
1. Fully understand the importance of intellectual property protection in promoting stable and rapid economic development and increase the sense of serving the overall situation. Intellectual property is a collective expression of the level of national scientific and technological innovation ability; is a strategic resource for national development; and, is a core element in improving international competitiveness. In the final analysis, modern economic competition is intellectual property competition. Strengthening intellectual property protection, improving intellectual property creation use and management levels are of great significance to speeding up economic restructuring and changing patterns of development, promoting independent innovation, deepening reform and improving the level of opening so as to maintain stable and rapid economic development. Historical experience shows that economic crises are often associated with scientific and technological revolutions; technological revolution has become an important engine for the new round of economic growth and prosperity. In the current economic situation, strengthening intellectual property protection has a significant role to promote effectively technological innovation and scientific and technological revolutions, the birth of new industries and create new market demands, cultivate new economic growth points and lead the new directions of economic development.
2. Pay high attention to the changes in international and domestic economic situation and new demands for intellectual property adjudication to effectively serve to enhance the overall situation with validity, efficiency and initiative. The current economic situation has created newer and higher requirements and expectations for intellectual property adjudication. Courts at all levels must enhance the sense of crisis and sense of urgency, their overall macro-consciousness and awareness, make greater effort to expand room for innovation, promote nurturing intellectual property rights brands and new economic growth points, enhance market competitiveness of enterprises and enhance the country’s core competitiveness; focus more attention to create an open and liberal trade and investment environment, standardize market order, safeguard fair competition, improve the socialist market economic system, vigorously promote the building of a society with integrity and in addressing the challenges, turn crisis into an opportunity to fully enhance the unique function of intellectual property adjudication.
II. Increase the strength of patent protection, efforts to cultivate and expand space for innovative scientific and technological innovation and actively promote independent innovation
3. Use the implementation of the newly revised patent law as an opportunity to place great importance on patent trials, and comprehensively improve the level of patent adjudication. Patents as the core scientific and technological innovations form the core of enterprises’ and national competitiveness and play the most direct and important role in strengthening patent protection for scientific and technological progress and independent innovation. Every relevant court, based on a sense of responsibility and mission to improve innovation capability and build an innovative country, needs to attach great importance to the trial of patent cases and to raise the level of patent adjudication as a priority. It is necessary to deeply understand and correctly grasp the legislative purpose and spirit of the patent law, strengthen research and ensure correct implementation of the revised patent law when new situations are discovered and resolve new problems.
4. Accurately grasp patent justice policies and strengthen protection of patent rights. It is necessary from China's national conditions, in accordance with the stage of development of China's industrial technology and industrial intellectual property policies, in accordance with law to confirm a reasonable scope for strengthening the judicial protection of patents, so as to enable enterprises to invest in innovation, to enable individuals to have creative enthusiasm, to enable full creative vitality of the community, but also not to enable patents to become an obstacle to technological progress, and a tool for unfair competition against competitors; to mobilise and configure fully the capital and technology resources of the whole of society, and to accelerate the dissemination and use of technical information. It is necessary to correctly apply the principles and methods of deciding patent infringement and further coordinate adjudication and improve the standards of patent claim interpretation and infringement comparison. To correctly interpret the claims of invention patents and utility models and properly delineate the scope of patent protection, one cannot simply limit the scope of patent protection to the strict literal meaning of the claims, nor can one use claims freely as technical guidance, instead one must set out from the middle of these two extreme positions, so that the interpretation of the claims can provide fair protection of patent holders, but also to ensure that the law gives the public reasonable stability. Whatever technical features are in the independent claim should be included among the technical features compared. If a patentee has specifically excluded features from the scope of the patent during the prosecution or validity proceedings, they shall be estopped in infringement proceedings and cannot include these features within the scope of protection. Strictly apply the provisions of the doctrine of equivalents, explore and improve the application of equivalent infringement rules to prevent inappropriate expansion of the scope of protection. According to law, seriously review the various non-infringement defences and infringement defences, reasonably identify first use rights and according to law support the prior art defence.
III. Strengthen the protection of commercial indicators, actively promote the economic development of brands and standardize the market order and defend fair competition
5. Fully respect the market value of well-known brands and in accordance with the law strengthen the protection of well known brands. Well-known brands embody competitive advantage for enterprises, are an advantageous tool for enterprises to participate in domestic and international market competition, represent the core of the economic competitiveness, are enterprises’ and the nation’s strategic assets and also are one of the key elements to drive market consumption. People’s courts need, through strengthening trademark protection and preventing unfair competition, in order to provide a harmonious and relaxed legal environment to promote the creation of famous brands and the economic development of brands, to stimulate and create consumer demand, stimulate economic growth and increase our nation’s enterprises domestic and international competitiveness.
6. Perfect trademark judicial policies, strengthen trademark right protection and enhance and promote the cultivation of own brands. Correctly grasp the exclusive nature of trademark rights, reasonably define the scope of rights, both to ensure the reasonable use of trademarks resources, and safeguard fair competition; based only on goods for which use is approved and trademarks for which use is approved, strengthen the core areas of trademark protection, but also using market confusion as a guide, reasonably delineate the exclusive scope of trademark rights, to ensure that that there are clear boundaries in the use of trademarks by business operators, so that the creation and development of own brands has sufficient legal space. Where without the permission of trademark registrant, a trademark is used on the same products for which the trademark is registered, except where this produces conditions of fair reasonable use, in confirming this is an infringing act it is not necessary to consider elements of confusion. When determining whether the trademarks are similar, or whether the products bearing the different trademarks are similar types of products, take into consideration the distinctiveness and public recognition of the registered trademark for which protection is sought and offer stronger and broader protection to trademarks that are more distinctive or better recognized in the market place, assist the leaders in market competition and clean the market environment and stop acts for unfair free-riding and copying.
7. Properly handle relationship between actual use of a registered trademark and the bearing of civil liability, allow the bearing of civil liability to encourage the use of the trademarks and activate trademark resources and prevent the use of registered trademarks improperly and opportunistically. Where the trademark for which protection is requested has not entered actual commercial use, the main way of determining civil liability may be to order injunctions against infringement, in determining the liability for damages it is appropriate to consider the actual non-use of the trademark and, except for reasonable costs incurred to protect rights, if indeed there is no actual damages and other damage, generally do not determine compensation based on the alleged infringer's profits; if the registrant or assignee has no real intention to use and the registered trademark is being used as a compensation tool, it is permissible not to order damages; where the registered trademark has reached three continuous years of non-use as provided by the Trademark Law it is permissible not to support a claim for compensation for damages.
8. Strengthen the judicial determination and supervision of well-known trademarks and improve the system for protection of well-known trademark to ensure the authority and credibility of judicial protection. Strictly control the confirmation scope and confirmation conditions of well-known trademarks and strictly prohibit the expansion of the confirmation scope and reduction of confirmation conditions. Whenever it is possible to give protection to a registered trademark on the basis products are similar it is not necessary to determine whether a trademark well-known mark. Where a well-known trademark is confirmed to meet the legal requirements, the level of protection needs to be increased and resolutely put a stop to acts of infringement that are derogatory or dilute the well-known trademark and according to law safeguard the brand value of well-known trademarks. Conscientiously implement the "Supreme Court Notice Relating to jurisdiction in Civil Disputes Concerning Well Known Trademarks " (No. 1 of 2009). After the notice is issued cases accepted by a court without jurisdiction must be transferred to a court with jurisdiction to adjudicate. For cases accepted prior to issue of the notice, and where such cases have not yet concluded, the audit before decision system must be strictly implemented. Courts at all levels should strengthen the investigation and supervision of cases where well-known trademarks have already been confirmed, in relation to cases where well known trademarks have been confirmed based on fabrication of evidence or fraud, and other cases where well-known trademarks have been illegally confirmed, you should correct the cases through the procedure of trial supervision; parties involved in well-known trademark cases who perform acts which obstruct civil litigation, shall be subject to sanctions. Courts with jurisdiction should positively accept the various aspects of supervision in relation to judicial determination of well-known trademarks and problems that arise must be solved in a timely manner. After judicial interpretations for protection of well-known trademarks are promulgated, courts at all levels should conscientiously implement them so that the judicial protection of well-known trademarks is standardised.
9. Strengthen trademark application review adjudication work, correctly handle the protection of trademark rights and their relationship to maintaining market order. It is necessary to effectively curb the improper acts of trade mark hijacking by others, strengthen the protection of prior trademarks with a certain amount of fame, and also accurately grasp the relative strengths of trademarks and not give cross category protection to non-well-known trademarks. Correctly distinguish between the right to cancel a registered trademark based on public and private rights, prevent the inappropriate expansion of the scope of a registered trademark and avoid the arbitrary revocation of registered trademarks. Trademarks which have been used for a relatively long time and have established a relatively high reputation in the market and created their own groups of related marks can not be lightly revoked, at the same time as protecting the earlier rights according to law, respect the market reality that the related public has already objectively formed a separation between the related marks. It is necessary to grasp the legislative spirit of the procedures of the Trademark Law relating to protection of prior rights and protecting the market order and focus on maintaining the procedures that have already established and stabilized the market order to prevent parties creating fake trademark disputes to opportunistically and predatorily take advantage and avoid hastily revoking a registered trademark causing great hardship to an enterprise’s ordinary course of business. For trademarks which conflict with other’s prior copyright, business names and other property rights, which have exceeded the period for dispute under the Trademark Law and cannot be cancelled, the prior right holder can still within the limitation period bring civil litigation, but the People's Court can no longer issue a decision of civil liability to stop use of the said registered trademark.
10. Properly handle the conflict between registered trademarks, enterprise names and prior rights according to the law stop "near the famous" and other acts of unfair competition. In addition to civil disputes relating to conflicts between registered trademarks, in relation to civil disputes over conflicts between registered trademarks, enterprise names and prior rights, including disputes where the Defendant has in actual use changed the registered trademark or used the registered trademark exceeding the scope of the goods for which it is registered, as long as it is a dispute over civil rights and interests and also meets the requirements in civil procedure rules to be accepted, people’s courts should accept the case. Wherever the alleged infringing mark is not registered at the time of acceptance, the people’s court should not be impeded from accepting and hearing the case. In cases where the alleged infringing mark has been registered but the alleged infringing act is copy, imitating or translating a prior well-known trademark, the people's court should accept the case.
In accordance with good faith, maintain fair competition and protection of the principle of prior rights, in accordance with the law try such cases of conflict of rights. Where there is a legal form of registration with the administration of industry and commerce etc, but in fact this constitutes trademark infringement or unfair competition, according to the law determine this constitutes trademark infringement or unfair competition, there is no need for administrative handling as a precondition, and there is no need to stay litigation because of administrative handling. For commercial indicators such as enterprise names that have been registered outside China, even if its procedures for acquisition complied with the overseas laws and regulations, but the use in China is a violation of our laws and disrupts of the market economic order, based on the principles of independence and territoriality of intellectual property, in accordance with our laws confirm the acts of use constitute trademark infringement or unfair competition. Where an enterprise name conflicts with and infringes the exclusive right of a prior registered trademark, in accordance with the law handle it as trademark infringement; where a company name does not conflict but its use is sufficient to produce market confusion, and is anti-competitive, in accordance with the law handle it as unfair competition. Where for historical reasons trademark registrations and business name rights conflict and the parties do not have bad faith, the specific circumstances of the case should be considered, based on considering the historical factors and current use, reach a fair settlement of the conflict, it should no simply be assumed to constitute trademark infringement or unfair competition; in relation to where an old indicator has a clear identity and other commercial indicator disputes, it is necessary to respect the history and the maintain the legal order already established. In relation to indicators that are part of an enterprise name and simplifications of enterprises names that have a certain market reputation, are well known to the relevant public and have an actual role as a trade description, they should be deemed to be enterprise names and given protection against unfair competition. Where use of an enterprise name has constituted trademark infringement, you may according to the specific circumstances of the case issue an order to stop using, or in relation to the method of use of such enterprise name impose restrictions on the scope of use. Where use of an enterprise name has unfairly used another person’s relatively well known registered trademark, without considering whether it has produced conflict and difficult to avoid market confusion, you should in accordance with the claims of the party order the cessation of use of the name or that the enterprise name be changed. Where an order is made for cessation and the party refuses execution, increase compulsory enforcement and consequential compensation for damages.
11. Strengthen unfair competition and anti-monopoly trials, fully consider the relationship between free competition and fair competition, actively promote improvement in the market structure and development of the socialist market economic system. Properly deal with the relationship between patent, trademark, copyright and other intellectual property laws and the anti-unfair competition law; unfair competition law’s supplementary protection nature cannot clash with the legislative policy of specialist laws, where the special provisions of law have been exhausted, in principle the Anti-Unfair Competition Law should not be used to extend protection. Where the Anti-Unfair Competition Law has special provisions which provide exhaustive protection for certain acts, generally the provisions setting out basic principles should not be used to expand its scope of protection; in relation to acts of competition where specific provision has not been made, only in accordance with generally accepted business standards and awareness is it possible to determine violation of provisions setting out general principles and determine they constitute acts of unfair competition; prevent unfair competition by improperly expanding the scope of unfair competition and thereby hinder free and fair competition. Properly address the protection of trade secrets and freedom of choice of occupation, restrictions on employment to protect confidentiality and reasonable circulation of talent, safeguard the legitimate right of employment of workers and the legitimate rights and interests of entrepeneurs. Attach great importance to the implementation of the Anti-Monopoly Law, according to the law handle well all kinds of monopoly dispute cases, curb monopolistic behavior, maintain fair competition and provide a free and relaxed environment entrepreneurship and development.
IV Improve the intellectual property litigation system, make efforts to improve the trade and investment environment, and actively promote the improvement of the level of opening to the outside
12. Strengthen the protection of the right to bring proceedings and make litigation channels smooth. According to law, protect the right to bring proceedings, all proceedings which meet the conditions to be accepted shall be promptly accepted; where a right holder has expressly authorized a lawyer to sue on their behalf, he can bring proceedings in the name of the right holder; also consider the actual circumstances of right holders outside china protecting their rights and not demand the right holders outside china sign and/or chop on the complaint. Bring together the actual practice of intellectual property trial practice, improve various litigation systems, and simplify processes for providing relief and implement measures for the convenience and benefit of the people so as to enhance the effectiveness of judicial relief.
13. Improve the confirmation of non-infringement lawsuit system to curb acts of abuse of intellectual property rights so as to provide a judicial environment for the security of trade and investment. Continue to explore and improve the confirmation of non-infringement litigation system in the field of intellectual property to give full play to secure its role to maintain investment and business activities. In addition to the situation where a right holder has issued a warning to a particular subject and has not within a reasonable time according to the law brought suit, so the warned party can bring an action to confirm the non-infringement, a party, who is implementing or preparing to implement investment and construct factories and other such business activities and receives from the intellectual property right holder in some other way a related patent infringement etc warning or threat, and takes the initiative to request the right holder confirm that its behavior does not constitute infringement, and provides in a reasonable manner the information required and materials to make such a confirmation and the right holder does not within a reasonable period reply or refuses to provide confirmation, a lawsuit for confirmation of non-infringement may also be brought. When investigating the trial of confirmation of non-infringement of trade secrets, both protect the plaintiff's legal rights and investment safety, but also prevent the abuse of the litigation by the plaintiff to obtain trade secrets of others.
14. Strictly grasp the provisions of law and cautiously use preliminary injunction measures. Adopting preliminary injunctions need to be done actively but also cautiously, and need to be not only reasonable but also effective, to properly handle and maintain effective suppression of infringement and protect the ordinary course of enterprises business relations. Preliminary injunctions are suitable mainly in cases where the facts are relatively clear and infringement easy to judge, and by strictly applying the criteria for infringement you should reach a level of basic confidence. In determining if the applicant would suffer irreparable harm, the key consideration should be whether the damage can be compensated by monetary damages and whether enforcement of a judgment can be reasonably expected. The determination of the amount of bond needs to be reasonable and needs to be effective, the main consideration is the loss the respondent may suffer after being injuncted, but reference can be made to the amount of the applicant's claim for compensation. Critically review a respondent's public interest defence, generally it should only be considered in relation to public health, environmental protection and other circumstances of major social interests. The existing conditions of defendant companies should be considered, so as to avoid taking measures that would unfairly cause trouble to the production and operations of the enterprise sued. Especially in patent infringement cases, if the alleged infringing activity does not constitute literal infringement and a relatively more complex comparison of technology is needed, preliminary injunctions should not be ordered. Where the respondent has requested a declaratory judgment of non-infringement, or has initiated invalidation proceedings, the court shall investigate these claims and cautiously decide to adopt relevant measures. In accordance with the way in which the case has progressed, pay attention to cancelling in accordance with the law preliminary injunction orders at an appropriate time. Strengthen measures to provide relief to those who suffer from wrongfully applied for preliminary injunction measures: where the applicant has not brought suit within the legally provided time period or has in fact has made a wrongful application, where the injured party brings a claim for compensation, the injured party should be given adequate compensation. Where in order to stop major business activities such as discouraging others from putting new products on the market a malicious application for preliminary injunctions is made, resulting in the serious damage to the market interests others, it is necessary to pay attention to giving full protection of the injured party.
15. Give full play to the role of injunctive relief, the responsibility to properly apply for injunctions, and effectively curb infringing acts. In accordance with the litigation claims of the parties, the concrete circumstances of the case and the actual need to stop infringement, parties can be clearly ordered to destroy materials and molds etc specifically used to manufacture infringing products. However, before adopting destruction measures, the precondition of necessity must apply, there should be comparable gravity to the infringing acts and not cause unnecessary losses. If stopping the relevant conduct will cause a significant imbalance of interests between the parties, or is contrary to public interest, or in fact can not be performed, you may in accordance with the specific situation of the case proceed to balance the interests and decide not to stop the infringing acts and adopt more substantial compensation or alternative measures such as economic compensation. Where the right holder has for a long period of time acquiesced in infringement and not enforced its rights, at the time it makes a claim for cessation of damage, if ordering cessation of the act would result in a relatively large imbalance between the interests of the parties, you may consider carefully not to order cessation of infringing acts but without affecting giving reasonable compensation in accordance with law.
16. Enhance the compensatory, punitive and deterrent effect of damages, reduce the cost of defending rights and increase the price to be paid for infringing. In determining damages make good use of the rules of evidence, comprehensively and objectively examine the evidence to calculate the amount of compensation, fully use logical reasoning and everyday life experience, conduct a full review and examination of the authenticity, legitimacy and probative value of the evidence and adopt advantageous standards of evidence to determine the facts of damages. Actively guide parties to choose damages calculations based on loss caused or profits made, as far as possible avoid simply using the statutory damages method. Where it is difficult to prove the loss caused or profits made but there is evidence it is significantly more than the statutory maximum amount of compensation, this should be combined with the actual case situation, and reasonable compensation greater than the statutory maximum determined. Unless otherwise provided in laws, in applying statutory compensation, the reasonable costs of protecting rights should be calculated separately. When applying statutory compensation as far as possible give a detailed and specific explanation of the discretionary elements of each practical matter considered, so that the final amount compensation resulting is reasonable and credible. When, in accordance with the request of the right holder, you are calculating profit made from the infringement and the defendant without good reason refuses to provide evidence of its acts, there must be reasonable grounds or reasons for the amount determined and it needs to be convincing and reasonable. Pay attention to comparability when referring to licensing fees when calculating compensation, fully consider normal licensing and the way in which infringement actually occurred, and differences between the timing and scale etc, and reflect the spirit that infringement damages should be appropriately higher than normal licensing fees. Pay attention to the role played by auditing, accounting and other professionals in determining damages, guide parties to seek the help of professionals to help the calculation, description, and cross-examination. Actively explore the issue of professional assessment of intellectual property damages, when conditions are appropriate introduction of a system of expert assessment of damages by a professional organization.
17. Pay attention and research new issues in economic field of intellectual property rights and actively promote the development of the science and technology trade base and service outsourcing base.
Strengthening investigation and research of science of intellectual property protection issues related to the technology trade base and development of service outsourcing, in a targeted manner strengthen judicial protection of related intellectual property rights, in order to provide a good judicial environment for promoting the trade and science and technology base and serve the outsourcing base. Increase the strength of intellectual property protection in the areas of information, software, pharmaceuticals, new materials, aerospace, fine chemicals and other high-tech fields of, and actively promote the development of the science and technology trade base. Guide high-tech enterprises to further enhance independent innovation capability, possess independent intellectual property rights, strongly support the export of high tech exports with independent brands and independent intellectual property rights to further enhance the international competitiveness of export products. Deeply research legal issues in service outsourcing, further the construction of the service outsourcing base. Through judicial decisions guide service outsourcing enterprises to establish intellectual property protection awareness, establish a sound corporate intellectual property protection system, and improve the competitiveness of outsourcing services.
18. Improve relevant judicial policies on processing trade, and promote the healthy development of processing trade. Seriously study intellectual property protection issues in the processing trade, pay close attention to pull together experience of adjudicating intellectual property cases in the processing trade and resolve prominent problems that exist, improve the judicial protection policies, promote transformation and upgrading of processing trade. Properly handle the current multiple trademark infringement disputes in “OEM” foreign trade, in relation to the situations where there is trademark infringement, you should strike a balance as to whether the processor had an obligation that required it to investigate and reasonably impose infringement liability.
19. Adhere to the equal protection principle and resolutely oppose any form of protectionism. Handle cases in strict accordance with the law, equal protection of the local and non-local, national and foreign parties’ legitimate rights and interests, resolutely curb local protectionism and departmental protectionism, promote unified opening of the domestic market, improve the investment environment and enhance investor confidence, improve the international reputation and establish a good image and improve the level of opening to the outside. Co-ordinate domestic and international situations, appropriately handle major trade-related intellectual property disputes, actively serve both domestic and international markets and make overall use of both resources, both to ensure compliance with relevant international conventions and international practices, to promote international trade and economic cooperation, at the same time always paying attention to safeguard national interests and economic security, encourage and promote independent innovation, enhance the total capability of China's intellectual property and international competitiveness. Correctly handle the relationship between the hearing of specific cases and international relationships, no matter whether it is an ordinary foreign-related case or a sensitive case that has drawn international attention, they should all be handled strictly according to law, you can not be blind-sided by outside opinion to sacrifice the fair administration of justice.
20. Strengthen the coordinated guidance for cases of a similar type and related cases, standardize judicial practices and defend a unified rule of law. Strengthen investigation and research and operational guidance for cases of a similar type, increase the strength of judicial interpretations, perfect judicial policy, and actively implement the guidance system of typical cases, continue to clarify and improve laws and applicable standards. Strengthen the binding and standardised system for the exercise of discretionary power by judges and refine proper standards for the exercise of discretion. For cases where the legal issues are the same but judgments are not the same, strengthen trial level supervision, give full play to function of error correction of second instance trials and retrials. Strengthen the strength of the coordination and guidance of related cases, and improve coordination mechanisms. Cases involving the same legal facts or cases associated with the same legal relationship, which need to be transferred to another court, shall be transferred to another court in accordance with the provisions governing jurisdiction and joinder. For related cases develop the communication between the trial courts handling related cases and a coordination and guidance system for reporting jointly to higher courts. A court that has accepted a case after another, should be proactive in strengthening communication and timely report to the higher court to coordinate and avoid conflicting contradictory rulings.