The Effectiveness of the Declaration of the Patent Right Invalid to the Relevant Patent Infringement Proceeding

In the patent infringement proceedings, the plaintiff applies for the declaration of the patent right invalid to the Patent Review Board (“PRB”) during the defense period, which is a common strategy.

In the practice, when PRB has made a decision on declaring a patent right invalid, whether the court can dismiss the patentee’s claim on the decision date; or 3 months after the decision date, or upon the valid administrative order on affirming such decision, according to “Patent Law”, Article 46, paragraph 2?

However, different courts, even different judges may make a different choice on dealing with such cases.

Take some local courts’ decisions for example. (2005) Guangdong High People’s Court Min San Zhong Zi No. 321 Judgement, the Guangdong High People’s Court states: “During the second instance, PRB has made a decision on declaring a patent right invalid for Tian Yi Company’s patent. …… According to “Patent Law” Article 47, any patent right that has been declared invalid and shall be deemed to be non-existent from the beginning. So Tian Yi Company’s patent shall be deemed to be non-existent from the beginning.” However, (2006) Guangdong High People’s Court Min San Zhong Zi No. 180 Judgement, the Guangdong High People’s Court states: “During the second instance, PRB has made the No.7891 decision on declaring a patent right invalid for Co Wan Company’s patent …… Although Co Wan Company has ……brought an administrative proceeding, the Beijing First Intermediate People’s Court has affirmed the decision made by PRB. So, Co Wan Company’s patent has been declared invalid and shall not be protected by “Patent Law”. According to “Patent Law” Article 47, paragraph 1, any patent right that has been declared invalid and shall be deemed to be non-existent from the beginning. ……” These are the 2 typical cases that the same local court makes a different choice. Similar phenomenon also exists in other local courts’ judgments.

For the Supreme People’s Court of P.R.C.(“Supreme Court”), since 2009, the Supreme Court has made (2009) Min Shen Zi No. 1048 Civil Ruling, and (2009) Min Shen Zi No. 1573 ruling, a unified standard on dealing with such cases is established, namely that “Any patent that has been declared invalid according to “Patent Law” Article 47, paragraph 1, the relevant decision of PRB shall come into force. In other words, if the patentee has applied an administrative proceeding within the statutory period, before the affirmation judgment is made, such decision has not come into force, the court that hearing the related patent infringement proceeding, shall not dismiss the claim of the patentee.

However, on Nov. 28, 2011, Vice President of the Supreme Court Xi Xiaoming delivered a speech on the Nationwide Forum on IPR Trial Work, he said that where PRB has made a decision on declaring a patent right invalid on the relevant patent before the civil judgment has been made, the court can dismiss the claim of the patentee case by case. The decision made by PRB has been rejected in the administrative proceeding, the patentee may bring a lawsuit again after such administrative judgment has been made.” In view of this interpretation, some local courts including Shanghai have made some changes on dealing with such cases, and prefer the former choice.

Nevertheless, the later choice is applied by the relevant judgments and rulings of the Supreme Court in recent 2 years. For example, in (2013) Min Shen Zi No. 1144 ruling and (2013) Min Shen Zi 1283 ruling, the Supreme Court clearly states: “When the decision made by PRB is involving in an administrative proceeding, this case shall be determined based on the administrative judgment. So the civil proceeding and the verdict of execution shall be suspended before the administrative judgment has been made. ”

Another phenomenon is that the Supreme Court and SIPO hold the consistent opinion on dealing with such cases. SIPO “Review Guide” states: “According to Patent Law, Article 46, paragraph 1, after PRB had made a decision on declaring a patent right invalid (partly or whole), if the parties failed to bring an administrative lawsuit within 3 months after it had received such decision, or the court affirmed such decision, then the Patent Office shall register and publish such decision.” Which means that upon the decision was made, such decision shall not come into force, and be used as a basis for enforcement.

To sum up, currently, there is no unified standard for all courts on dealing with such cases. In a patent infringement proceeding, for the plaintiff, it shall investigate the trend of the competent courts on dealing with such cases, and make a preferable choice; for the defendant, it is very important to apply for the declaration of the patent right invalid and use these rulings of the Supreme Court to persuade the judges.