Suspension System In Patent Ownership Disputes

During the procedures of the lawsuits related to the disputes over the ownership of the right to apply for a patent or the patent right (hereinafter referred to as “Patent Ownership Dispute”), the related patent may be invalid in the invalidation procedure, or the defendant may surrender, or transfer the relevant patent, which may bring significant disadvantages to the plaintiff.

In regard of this, “Patent Law” has stipulated the “Suspension System” to solve such problem.

“Suspension System” refers to the patent administration department shall be entitled to suspend the relevant procedures based on the application of the party (note: normally refers to the plaintiff), and the preservation of the right to apply for a patent or the patent right ordered by the court, upon the acceptance of such “Patent Ownership Dispute” by the patent administration department or the court. According to “Rules for the Implementation of the Patent Law”, “Patent Examination Guidelines” and other relevant regulations, “Suspension System” shall be specifically refer to suspending the procedure of preliminary examination, substantive examination or reexamination of a patent application, the procedure for the grant of the patent right or the procedure for invalidation of a patent right; and handling the procedure of surrendering, changing or transferring a patent right or the right to apply for a patent, the procedure of pledging a patent right and the procedure of cessation of a patent right prior to its expiration.

The suspension duration shall be 1 year when the request for suspension is filed by the party; or 6 months when the order for suspension is made by the court. Both durations could be extended.

In view of this, for the plaintiff, upon the acceptance of such dispute, in order to reduce its risks, it shall request the patent administration department to suspend the relevant procedures.

On the contrary, for the defendant, in order to deal with the problems brought by “Suspension System”, it could pay attention to the following aspects:

Firstly, to surrender the patent. Once the defendant has found that it would possible to lose the lawsuit, and would not obtain the license from the plaintiff, but the relevant technologies are extremely necessary, then it could surrender the patent before the plaintiff applies “Suspension System”. However, if such surrender be deemed as a malicious surrender, it would be possible for the plaintiff to recover the relevant patent by the final judgement.

Secondly, to hang up the proceeding. Once the plaintiff has applied to the court for the preservation of the relevant patent, the defendant could apply for reconsideration, which may hang up the proceeding.

In addition, while “Suspension System” has been initiated, and the lawsuit is unfavorable for the defendant, the defendant could apply for a patent evaluation report. If the report shows that the stability of the relevant patent is not good, the defendant could take advantage of such report in the reconciliation with the plaintiff. If the defendant fails to reach a settlement with the plaintiff, it could also use this report to deal with the infringement lawsuit which may be brought by the plaintiff.