SPC IP Court’s first patent non- infringement declaration litigation—VMI Holland B.V. et al. v. Safe-Run Huachen Machinery (Suzhou) Co., Ltd.

II.Key points of rulings by courts at two levels

The Suzhou Intermediate People’s Court, the court of first instance, held that the case did not meet the acceptance criteria for the declaration of patent non-infringement and dismissed the lawsuit for the following grounds:

The patent infringement dispute between the parties in this case had entered  the statutory dispute resolution procedure, through which it is completely possible  to determine whether it constituted infringement. Therefore, the administrative complaint filed by Safe-Run with Suzhou IPO did not constitute an “infringement warning” under the Patent Law.

If the patentee withdrew the warning or filed a lawsuit within a reasonable period of time, the person being warned or the interested party would be released from uncertainty. There would be no need to resolve the dispute by a declaration of patent non-infringement. The date when “a lawsuit is filed” should be determined based on the date when the patentee brings a lawsuit but not when the court accepts it.

The SPC, the court of the second instance, also held that the claim for the declaration of non-infringement in this case did not meet the corresponding acceptance criteria set forth in the Judicial Interpretation of the Patent Law. Thus, the SPC rejected the appeal and upheld the original ruling. For Issue 2, the SPC supported the first-instance court’s determination of the date when “a lawsuit is filed.” For Issue 1, however, it denied the first-instance court’s view for the following reasons:

First of all, in the patent infringement dispute resolution request submitted by Safe-Run to the patent administration department, the respondent was Cooper, the user of the Allegedly Infringing Products. As the manufacturer of such products, however, VMI must have realized that the equipment it manufactured or sold might be subject to the alleged infringement. Once the dispute resolution authority determined that infringement was established, VMI would inevitably be affected in the relevant market. Therefore, the influence of the administrative proceeding on VMI’s operation was objective in this case.

Secondly, the user Cooper was the only respondent of the administrative complaint filed by Safe-Run. Not being a respondent, the manufacturer VMI was  not given the opportunity to participate or claim its rights in the administrative proceeding. For VMI, it had been uncertain whether the Allegedly Infringing Products would be recognized as infringing products by the patent administration department. As a result, its product sales might be affected in the market and its rights and interests could not be protected in the corresponding administrative proceeding.

Finally, the purpose of VMI filing the lawsuit for the declaration of patent non- infringement was to confirm through judicial procedures as soon as  possible that  the Allegedly Infringing Products did not fall within the scope of protection of the Asserted Patent. If the result is in favor of VMI, VMI would thus be released from the uncertainty of the alleged infringement and stabilized in the corresponding market. In any event, it was not only in the interest of all the parties in the case, but also could help save administrative and judicial resources to determine whether the Allegedly Infringing Products fell within the scope of protection of the Asserted Patent as soon as possible. In this case, the result of the infringement dispute resolution request filed by the patentee to the patent administration department may directly affect the interests of VMI although it was not the respondent. Thus, it may be considered that VMI had been warned of infringement.

Therefore, in this case, with respect to VMI, Safe-Run’s request for patent infringement dispute resolution should be construed as an infringement warning stipulated in Article 18 of the Judicial Interpretation of the Patent Law.

III.Discussion on whether the “administrative complaint” constitutes an “infringement warning” under the Patent Law

(I)Under the two-track system of administrative and judicial patent protection, an administrative complaint should not constitute an “infringement warning” under the Patent Law

Article 18 of the Judicial Interpretation of the Patent Law, the core legal basis of the case, provides:

“[w]here a patentee issues a patent infringement warning to another person,  and such another person being warned or the interested party gives a written letter demanding the patentee exercise its right of action, but the patentee neither withdraws the warning nor files a lawsuit within one month after receipt of such written demand letter or within two months after the issuance of the written demand letter, the people’s court shall accept the case if such another person being warned or the interested party brings an action to the people’s court for a declaration that his/her/its act does not constitute infringement on the patent right.” Accordingly, there are three conditions for accepting a lawsuit for declaration of patent non-infringement as follows:

1.The patentee issues an infringement warning to another person;

2.Such another person being warned or the interested party issue a written demand letter; and

3.The patentee fails to withdraw the warning or bring a lawsuit within a reasonable time limit. In other words, when deciding whether to accept a lawsuit for declaration of patent non-infringement, a court should follow the logic rule of “warning → demanding → failing to exercise the right of action → filing a lawsuit for declaration of patent non-infringement.”

Therefore, whether there was an “infringement warning” becomes a prerequisite for further considering other acceptance conditions of this case. If there was even no “infringement warning,” it would be totally unnecessary to determine the existence of the next two stages. As such, it would be sufficient for the court to dismiss the lawsuit solely. In short, the court’s determination of the “infringement warning” was crucial, which would determine whether it was necessary to continue to consider other conditions.

The Safe-Run case has three particularities. The first is that the patentee Safe- Run had never sent any warning letter to any party in the case. This left the court with no choice but to consider other forms of infringement claims as “infringement warnings.” The SPC has innovated many intellectual property rules which are experiential, logical and full of vitality. In the author’s belief, however, it is indeed debatable to consider the patentee’s direct filing of patent administrative complaint as the “infringement warning” under the Patent Law.

(II)No legislative basis for the determination of infringement warning

The laws and regulations of the Mainland China do not provide for the connotation of “infringement warning.” Theoretically, the formal requirements of the patent infringement warning have been fully discussed. For example, whether “taking the initiative to withdraw a lawsuit after filing it with the court” is a form of infringement warning. Although there are disputes over the forms of infringement warning, so far no opinion holds that “submission of an infringement dispute resolution request to the patent administration department” constitutes an “infringement warning” under the Patent Law.

The legislation of China’s Taiwan region even denies such opinion. The Fair Trade Commission defines the infringement warning by description and enumeration in the Guidelines for Handling Cases Involving Enterprises Issuing Warnings Letters on Infringement of Copyright, Trademark or Patent Rights as follows: “Enterprises issuing warning letters referred to in the Guidelines means that enterprises, in addition to claiming rights or stopping infringement in accordance with legal procedures, notify their own business counterparties or other specific counterparties or potential counterparties of the following letters, indicating the acts of their specific competitors that infringe upon all their copyright, trademark or patent rights: warning letters, reminders, attorney letters, open letters, advertising notices, and other  written documents sufficient to inform their own business counterparties or other counterparties or potential counterparties of such acts.” It can be seen that the Taiwan region has specifically excluded the acts of “claiming rights or stopping infringement in accordance with legal procedures” from the “infringement warning.”

It is worth noting that there are documents of judicial interpretation nature    that allow the court to extensively interpret “infringement warning,” but the scope  of interpretation is limited. The Opinions of the Supreme People’s Court on Several Issues Concerning Intellectual Property Trials Serving the Overall Objective under the Current Economic Situation (Fa Fa [2009] No.23) provides: “If an intellectual property holder issues an infringement warning to a specific person and fails to initiate a lawsuit within a reasonable period, the person being warned may file a lawsuit    for declaration of non-infringement. In addition, if a party who is carrying out or preparing for carrying out business activities such as investing in the construction of factories receives a warning or threat concerning a patent infringement, etc. made by the intellectual property holder in any other way, such party may also file a lawsuit for declaration of non-infringement, provided that such party has taken the initiative to request the right holder to declare the non-infringement of its act and furnished the materials and information necessary for the declaration in a reasonable manner, but the right holder fails to reply or refuses to make a confirmation within a reasonable period.” Although the Opinions consider “warnings or threats in other ways” as the acceptance criteria, the “other ways” here mainly refer to the abuse of patent rights to unduly affect the operation of others. For example, the above-mentioned filing and withdrawal of the lawsuit lead to the unstable production and operation of the alleged infringer or the “explicit or implied disclosure of the infringement of another person’s products in newspapers and periodicals.” If the patentee does not abuse but protects its patent rights in accordance with the law instead, its action should not be the “warnings or threats in other ways” as mentioned above. In addition, the SPC issued the Opinions earlier than the Judicial Interpretation of the Patent Law. The “infringement warning” should still be determined in accordance with the latter new law, which provides that the “infringement warning” is to achieve the effect of being both informed and warned, and should not include all acts that will cause unease to interested parties.

(III)No judicial precedent for the determination of an administrative complaint as an infringement warning

The Safe-Run case is not only the first patent non-infringement declaration litigation since the establishment of the SPC IP Court, but also the first IP case in China in which an administrative complaint filed with the intellectual property authority constitutes an infringement warning. Prior to the case, the Chinese courts had denied this more than once.

Take as an example the administrative appeal involving the dispute between Shenzhen Baili Marketing Services Co., Ltd. (“Baili”) et al. and Apple Computer Trading (Shanghai) Co., Ltd. (“Apple”) ([2017] Jing Xing Zhong No. 2606) heard by Beijing Higher People’s Court. As the patentee of the design involved, Baili claimed that the offering for sale and sales of iPhone 6 and iPhone 6 Plus by Beijing Zoomflight Telecommunications Equipment Co., Ltd. and its store on Gongti East Road (collectively “Zoomflight”) infringed its patent right at issue. It requested a resolution of the dispute before the Beijing Municipal Intellectual Property Office (“BJIPO”). After the case was accepted, Apple, the maker of the aforesaid mobile phone products, requested to participate in the proceedings as a third party on the ground that it was interested in the result of the case. Later, BJIPO added Apple as a co-respondent other than a third party. After BJIPO made the decision of Jing Zhi Zhi Zi No. 2016854-16 against Apple, Apple filed an administrative lawsuit jointly with Zoomflight with the Beijing Intellectual Property Court ([2016] Jing 73 Xing Chu No.2648), requesting the court to revoke the decision. At the same time, it also filed a civil lawsuit, requesting a decision that the mobile phone products involved did not infringe the patent right.

Beijing Intellectual Property Court held that Apple’s simultaneous filing of administrative and civil lawsuits as mentioned above conformed to the provisions of Paragraph 1, Article 6 of the Administrative Procedure Law, and the court can hear them together. In the second instance, Beijing Higher People’s Court, corrected the decision of the court of first instance, holding that the civil lawsuit should at least meet the acceptance criteria for patent non-infringement declaration litigation. The second- instance court pointed out that there was no evidence to prove that the patentee Baili had issued infringement warnings to others, including Apple and the reseller involved in the case. Therefore, the case did not conform to the provisions of Article 18 of the Judicial Interpretation of the Patent Law and did not meet the acceptance conditions. It can be seen that Beijing Higher People’s Court did not consider the administrative complaint filed by Baili as an “infringement warning” under the patent law.

Moreover, Chinese courts have also clearly pointed out in the non-infringement declaration litigations of other types of intellectual property rights (such as trademark right) that “the patentee’s submission of an infringement dispute resolution request to the authority for industry and commerce (‘AIC’)” does not constitute an “infringement warning.” Take as an example the appeal involving the dispute between Quanzhou Wanlong Building Materials Development Co., Ltd. (“Quanzhou Wanlong”) and Tianjin Wanlong Group Co., Ltd. (“Tianjin Wanlong”) over declaration of trademark non-infringement ([2006] Min Zhong Zi No. 321). The court of first instance held that the action to seek a declaration of non-infringement should be filed based on  the facts: (i) that the interested parties had been warned of infringement; and (ii) that the patentee failed to initiate the procedure with the competent authority within a reasonable period of time in accordance with the law. The defendant Tianjin Wanlong had reported to AIC the plaintiff Quanzhou Wanlong’s use of the “Wanlong” registered trademark. AIC had accepted the report and was handling it. If Quanzhou Wanlong refused to accept the decision of AIC, it would be entitled to file an administrative lawsuit with the people’s court. Before AIC made its decision, the plaintiff filed a separate civil lawsuit, requesting the court to recognize that its use of the abbreviated company name “Wanlong” did not constitute an infringement upon the defendant’s registered trademark. The civil lawsuit did not fall within the scope of civil actions accepted by the people’s court.

In the Wanlong case, the court of second instance affirmed the ruling of the court of first instance, believing that Tianjin Wanlong as the appellee had already initiated the procedure with AIC in accordance with the law against the appellant Quanzhou Wanlong for its use of the “Wanlong” registered trademark. The AIC had accepted the case and was handling it. The appellant may receive full remedy from AIC and in the administrative litigation. If the people’s court accepted the non-infringement civil lawsuit, there may be contradictions and inconsistencies between the two proceedings. As such, it was not appropriate for the court to accept the civil lawsuit.

The author notes that SPC’s decision on the patent administrative complaint in the Safe-Run case is delicately connected with another retrial in which the letter sent by a patentee to the National Medical Products Administration (“NMPA,” formerly State Food and Drug Administration) was found to constitute an “infringement warning.” Specifically, in the retrial of dispute between Xi’ an Chiho Pharmaceutical Co., Ltd. (“Xi’an Chiho,” or the “Patentee”) and Jilin Tianyao Bencaotang Pharmaceutical Co., Ltd. (“Jilin Tianyao”) over the declaration of patent non-infringement ([2017] Zui Gao Fa Min Shen No. 2893), Xi’an Chiho sent an attorney letter to the NMPA, claiming that Jilin Tianyao infringed its invention patent. After receiving the letter, the NMPA sent a letter to Jilin Tianyao, informing it to resolve the patent dispute first. The SPC believed that Jilin Tianyao’s drug registration was interrupted by the infringement warning letter and its interests were affected. Under this circumstance, Jilin Tianyao had the right to file a lawsuit for declaration of non-infringement upon issuance of a demand letter.

However, there is great difference between the above case and the Safe-Run case. First of all, the NMPA is not the department legally responsible for patent administration. Secondly, the NMPA that received the attorney letter does not have the authority resolve disputes over patent infringement. The letter sent in the above case did not trigger any patent infringement resolution procedures. Finally, the NMPA did not substantively handle the attorney letter after receiving it, but simply informed the Patentee to resolve the patent dispute separately. In the Safe-Run case, however, the patentee submitted the patent infringement dispute resolution request to an IPO, and initiated a legal patent administrative protection procedure. The IPO accepted the case, and conducted administrative investigations including on-site examination. The resolution of the patent dispute had been substantially advanced. Since the two cases have completely different facts, they are of no reference or relevance in between.

(IV)Lack of reasonable explanation for the determination of an administrative complaint as an infringement warning

It is quite improper for the court to interpret the submission of administrative patent disputes resolution request as an “infringement warning” provided for in the judicial interpretation.

First of all, such interpretation  would  confuse  legal  protection  of  rights  with abuse of rights. In China, it is not the judicial interpretation but the law that determines how to solve disputes over patent infringement. Article 60 of the Patent Law provides: “Where a dispute arises as a result of the exploitation of a patent without the authorization of the patentee, that is, the infringement of the patent   right of the patentee, it shall be settled through negotiation by the parties. Where the parties are not willing to negotiate with each other or where the negotiation fails,  the patentee or any interested party may institute legal proceedings in the people’s court, or request the administrative authority for patent affairs to handle the dispute.” Three ways to resolve patent infringement disputes are clearly given: private negotiation, administrative resolution and judicial proceedings. The latter two are collectively known as the “two-track” system of patent protection. The patentee’s request for protection from the patent administration department and initiation of   the administrative procedure in accordance with the provision stated above are an exercise of legitimate rights to seek protection. As specified in the above-mentioned provision of the Taiwan region’s Guidelines and explained by the court for its decision in the Wanlong case, safeguarding legitimate rights is fully justified and should be distinguished from abuse of rights.

Secondly, such interpretation would render some clauses in the Patent Law meaningless. Article 60 of the Patent Law further provides: “When the administrative authority for patent affairs handling the dispute considers that the infringement is established, it may order the infringer to stop the infringing act immediately. If the infringer is not satisfied with the order, he may, within 15 days from the date of receipt of the notification of the order, institute legal proceedings in the people’s court in accordance with the Administrative Procedure Law of the People’s Republic of China.” Therefore, after the patent administrative protection procedure is completed, the respondent has the statutory right to seek remedies for the administrative result by filing an administrative lawsuit. At this time, the law has taken the judicial procedure as final remedy. If administrative complaints are interpreted as “infringement warnings” that also triggers judicial proceedings, no one will wait patiently for the result and choose to resort to judicial channels in advance. As a result, it makes the above further provision of Article 60 of the Patent Law meaningless, and administrative and judicial resources wasted.

Thirdly, such interpretation would lead to conflicts between legal sources in different ranks. Article 60 of the Patent Law entitles a patentee to statutorily file administrative complaints at his own discretion, and empowers certain administrative departments to accept patent infringement disputes. The word “statutorily” here means as prescribed in the law enacted by the National People’s Congress (the “NPC”). In  a lower rank, the Judicial Interpretation of the Patent Law shall not provide for a larger scope of validity than the NPC enacted law, otherwise the excessive part will be invalid. “Infringement warning” is a norm in judicial interpretation. Interpreting administrative complaints as infringement warnings will lead to parallel judicial proceedings and administrative actions, which is contrary to Article 60 of the Patent Law. Although the judgment made by the SPC is not universally binding, it has strong guidance and reference to the judicial activities of all local courts in the country. If Article 18 of the Judicial Interpretation of the Patent Law is so construed under the guidance of the Safe-Run case in the judicial practice across the country, the rules for acceptance of patent non-infringement cases established in that Article may be rendered invalid due to obvious violation of the NPC enacted law. It is worth noting that such serious consequence will affect the authority of the judicial interpretation.

Finally, such interpretation would overturn the current “two-track” protection system. As mentioned above, if filing an administrative complaint constitutes an infringement warning as defined by the Patent Law, does failure by the patentee to withdraw the complaint from the administrative authority mean that the respondent has the right to file a lawsuit with the court for declaration of non-infringement? At the same time, does the withdrawal of the administrative complaint by the patentee mean that the respondent in a state of unease has the right to file a lawsuit with the court for declaration of non-infringement? This will lead to an illogical conclusion: as long as the patentee complains to the administrative authority, whether he withdraws it or not, it will certainly open the door to the court. This obviously undermines the “two- track” system of patent protection. Back to the Safe-Run case, the second particularity of the case lies in that the subjects of the action for declaration of non-infringement were VMI and Cooper, not VMI alone which felt “uneasy,” while the respondent Cooper appeared in the judicial procedure. Cooper was already in the administrative dispute resolution procedure. The suspension of the administrative procedure is also the result of its request for invalidation in accordance with Article 82 of the Rules for the Implementation of the Patent Law. The IPO of Jiangsu Province would continue to handle the case after a decision was made on the invalidation of the patent. At that time, the administrative dispute resolution procedure had not yet been completed. Whether the infringement was committed or not was dependent on the decision to be made by the IPO. For Cooper, there was no uncertainty as claimed by VMI. If every respondent in the country serves a demand letter to the patentee or files a lawsuit with the court if it receives an administrative complaint, and brings a lawsuit for declaration of non-infringement directly after a reasonable period of time, it may be hard for people’s courts and patent administration department to jointly maintain the “two-track” protection under the current law.

(V)No procedural necessity for the determination of an administrative complaint as an infringement warning

The third particularity of the Safe-Run case lies in that the administrative procedure was found to have an impact on VMI’s operation although only the user Cooper was subject to the administrative complaint. The SPC also pointed it out very keenly     in its ruling. Hypothetically, Patentee A chooses to safeguard his rights through administrative procedure, B is the user of the allegedly infringing product and C is the manufacturer. Now A only complains to the administrative authority about B’s infringement. Here are the questions: 1. Does A’s administrative complaint against B constitute an infringement warning against C? 2. How does C safeguard its rights and interests in the administrative process of handling the dispute?

The tricky part of this hypothesis lies in that what A initiates is an administrative protection procedure. If a litigation procedure is initiated in the first place, the above problem can be easily solved by the mature third party system in the Civil Procedure Law of the People’s Republic of China (Civil Procedure Law). Specifically, when A sues B for infringement of its patent right, C, as a directly interested party, can apply for participation in the lawsuit as a third party with independent right to claim. It is not necessary for C to bring a lawsuit for a declaration of non-infringement, not to mention the complicated determination of infringement warning. In addition, C can fully exercise the right of defense and other rights of action. It is undoubtedly the most ideal situation for the manufacturers and sellers who are most affected by the establishment of infringement. In the Safe-Run case, the court of second instance, perhaps based on the superiority of the judicial system and for the purpose of ensuring that the interested party gets out of the uncertainty as soon as possible, decided that “one-sided administrative complaint” constituted an infringement warning for VMI. (Certainly, the concurrent problem at this time is that there is no uncertainty of Cooper. What is the basis for it being a co-plaintiff?)

In this regard, it should be pointed out that the reason why the third party system in civil proceedings bypasses the identification of infringement warning is because there is a mechanism that allows interested parties to directly participate in infringement proceedings. In other words, under the condition that the patent administrative procedure has been initiated, as long as there is a way to enable interested parties such as C who have not been complained to enter the administrative procedure, there is  no need to forcibly determine that “one-sided administrative complaint” constitutes an “infringement warning,” and the effect of eliminating the uneasiness of interested parties outside the case can be achieved.

The current patent administrative protection system already allows a third party to participate. Article 2.1.1.3 of the Guidelines for the Administrative Adjudication of Patent Infringement Disputes, and Article 2.1.2.3 of the Operating Guidelines for Patent Administrative Law Enforcement (for Trial Implementation), both issued by the National Intellectual Property Administration, provide for the joint respondent system: “Where a patent infringement dispute falls under any of the following circumstances, the relevant units or individuals shall jointly participate in the resolution of the dispute: (1) where there are two or more patentees for the patent right involved, all the co-patentees shall be co-claimants, except where some of the co-patentees explicitly waive the relevant substantive rights; (2) where the respondent is an individual partnership, all partners shall be the co-claimants; or (3) any other circumstances prescribed by laws and regulations.” Paragraph 3 of the above provision allows the patent administration department to invoke the litigant system in civil proceedings. Of course, “any other circumstances prescribed by laws and regulations” also includes the circumstances where the interested party is a necessary joint participant or a third party with independent right to claim under the Civil Procedure Law.

Similarly, some provincial regulations on patent administration clearly specify that interested parties have the right to participate in administrative procedures upon application. Article 4 of the Regulations of Yunnan Province on Patent Administrative Enforcement provides: “Any unit or individual that is legally interested in thehandling or mediation of a patent dispute may, as a third party, request to participate in the handling or mediation of such patent dispute, or may be informed by the patent administration department to participate in the handling or mediation.”

Non-respondents can request to join the patent administrative procedure, which has not only the legislative basis but also judicial experience to follow. In the above- mentioned administrative dispute between Baili and Apple, the two courts discussed the question “whether there was a legal basis for BJIPO to list Apple as a co-respondent under the premise that Apple only applied to participate in the administrative procedure as a third party.” Beijing Intellectual Property Court, the court of first instance, held that under the premise that the claimant Baili did not make a request for resolution and Apple only requested to participate in the administrative procedure as a third party, BJIPO should not add Apple as a co-respondent. Beijing Higher People’s Court, the court of second instance, held a different view that the administrative authorities enjoy certain administrative discretion in the mediation and dispute resolution of civil infringements. The BJIPO’s addition of Apple as a third party or a co-respondent is an exercise of its administrative discretion. It did not violate legal procedures or damage the substantive or procedural rights of other parties. Obviously, the two courts did not deny that interested parties can apply to join the administrative procedure. Instead, they directly discussed the specific issue of whether interested parties may join as a third party or a co-respondent.

As shown by judicial practice, if the patent administration department refuses the participation of manufacturers and sellers in handling infringement disputes, it will be likely to order them to participate as interested parties and make a new decision in the final remedy of administrative proceedings. In the administrative dispute between Guangdong Imetto Digital Imaging Technology Co., Ltd. (“Imetto”), Wang Kui and Jinan IPO ([2008] Lu Xing Zhong Zi No.22 and [2007] Ji Xing Chu Zi No.19), Imetto alleged that Jinan Xinkangjia Digital Laser Photo Printing Company (“Xinkangjia”) and Wang Kui infringed its patent ZL200520037960.1 and requested Jinan IPO to take administrative action. On 1 November 2007, the IPO made a decision, finding that users Wang  Kui and Xinkangjia infringed the patent right and ordering them   to stop the infringement immediately. Dissatisfied with the administrative decision, the two users filed an administrative lawsuit. Jinan Intermediate People’s  Court   and Shandong Province High People’s Court respectively ruled that the Jinan IPO should make a new administrative decision within 60 days from the effective date  of the judgment on the ground that Guangzhou Huayi Digital Technology Co., Ltd. (“Huayi”), the manufacturer of the allegedly infringing product, was not added as a party to the administrative procedure by Jinan IPO. Jinan IPO then, on the basis of the above judgement, added Huayi as a third party and made a new administrative decision to immediately stop the infringement.

Therefore, where an interested party who has not been complained can completely apply to join the administrative patent dispute resolution procedure, the court should be modest and restrained in determining whether a “one-sided administrative complaint” constitutes an “infringement warning.” By explaining to the interested party that it can apply to join the administrative procedure, among others, the court should endeavor to respect the choice of the patentee’s way of safeguarding rights and the hard work of the patent administration department, so as to maintain the integrity of the administrative procedures for resolving patent disputes. In the Guidelines of Jiangsu Higher People’s Court for Trial of Trademark Infringement Dispute Cases, Paragraph 3 of Article 10.4 provides: “[t]he legitimate rights and interests of the plaintiff will be or threatened to be damaged if an action for a declaration of non-infringement is not brought, and the instability and unsafety can be eliminated only by filing a lawsuit for a declaration of non-infringement.” The above is taken as criteria for accepting case involving the declaration of non-infringement. That Article further points out that “as a new type of cases, cases involving declaration of non-infringement should be subject to the prerequisite of necessity and the criteria for accepting such cases should be strictly restricted.”

Conclusion

“The purpose of the system for the lawsuit of declaration of patent non-infringement is to grant the litigation right to the counterparty to enable it to eliminate such uncertainty,” stated in the SPC’s judgment of the Safe-Run case. In this regard, the SPC shall be supported for its starting point. As it pointed out, however: “[t]he patentee has a certain right of choice as to whether the patent infringement dispute is handled by the patent administration department or the people’s court. No matter who will handle the dispute, the key is to determine whether the Allegedly Infringing Products or method falls within the scope of protection of the Asserted Patent.” The results may be contradictory if the patent administration department and the people’s court make their respective determinations on whether the same allegedly infringing product falls within the scope of patent protection. In order to prevent such contradiction, it is more appropriate for the court not to determine the administrative complaint as an “infringement warning.”

To sum up, the patent administrative complaint does not constitute an “infringement warning” under the Patent Law, either for the respondent or for interested parties who are rendered uneasy because of the “administrative complaint.”

The court should be cautious when dealing with patent infringement disputes that have already been accepted by administrative authority. It should reasonably decide whether to accept the filing after fully considering whether there are any ways other than an action for a declaration of patent non-infringement for the counterparty to safeguard its rights.

Thank Zhou Ziwei for his contribution to this article.