In an initial decision on November 16, 2016, Chinese State Intellectual Property Office Patent Reexamination Board invalidated Novartis’ Chinese Patent No. 01809781.2 related to treatment of advanced malignancies involving bone and tumor-induced hypercalcaemia and the drug Zometa (zoledronic acid) for lack of novelty and inventiveness. Please note that this decision can be subject to judicial review. Keep posted.
Eli Lily lost a patent infringement appeal at the Chinese Supreme People’s Court last week, 13 years after its initial lawsuit. The Court held that Changzhou Watson Pharmaceutical Co., Ltd. did not infringe Eli Lily’s Chinese Patent No. 91103346.7 directed to olanzapine manufacturing method. Although Eli Lily initially obtained a favorable judgement of infringement and damages of 3.5 million RMB, the Chinese Supreme People’s Court ruling overturned the initial judgement. Notably, the Chinese Supreme People’s Court hired a technical expert from the Patent Reexamination Board of SIPO. see trial video at http://ts.chinacourt.org/1124.html.
On April 14, 2016, Beijing Intellectual Property Office and Beijing Municipal Government Information Office jointly issued the 2015 White Paper on Intellectual Property Rights Protection in Beijing. White Paper shows that the courts received 13,939 first instance IPR civil cases, an increase of 24.1% from last year; concluded 11, 858 cases, an increase of 8.49% from last year. The first intermediate court and the intellectual property courts in 2015 received a total of 7948 new first instance administrative intellectual property rights cases, a reduction of 18.38% from last year. The Beijing Intellectual Property Office handled 126 patent infringement cases, an increase of 57.5% from last year; investigated 551 cases of counterfeit patents, an increase of 96.1% from last year.
On April 14, 2016, Shanghai Intellectual Property Court released the first white paper. According to the white paper, the Court in 2015 received a total of 285 cases involving foreign, Hong Kong, Macao and Taiwan parties, accounting for 16.13% of total cases of 2015.
The foreign parties to the cases involve the United States, Germany, France, Britain, Italy, Japan, South Korea and Taiwan, Hong Kong, a total of 15 countries and regions and include General Electric, Hewlett-Packard, BASF, Microsoft and other Fortune 500 companies as well as Burberry, BMW, BOSS, LV, Rafi, Gucci, Victoria Secret, ZOJIRUSHI and other international brands.
SIPO publishes new enforcement guidelines for comments on March 4, 2016. The new guidelines include:
(1) Patent Infringement Activity Identification Guideline(《专利侵权行为认定指南》);
(2) Patent Administrative Enforcement Evidence Guideline (《专利行政执法证据规则指引》);
(3) Other Patent Disputes Administrative Mediation Guideline (《其他专利纠纷行政调解指南》).
The deadline for comments is April 5, 2016, see http://www.sipo.gov.cn/tz/gz/201603/t20160304_1246757.html.
For those prefer or advocate judicial enforcement, the administrative enforcement appears to be here to stay. It is important to take advantage of the administrative procedures. According to available statistics, SIPO and its local offices handled 24479 patent-related disputes in 2014, and 21334 patent-related disputes in the first 10 months of 2015.
Shanghai IP Court accepted Apple’s filing of a lawsuit seeking a declaratory judgment of noninfringement against Shenzhen Baili Marketing Services Co. Ltd. regarding Chinese Design Patent No. 201430009113.9.
According to the Court, the suit for patent non-infringement is an extension of suit of patent infringement. Thus, the territorial jurisdiction requirements related to patent infringement lawsuits apply. Shanghai is the place where the alleged infringement occurs. Thus, Shanghai IP Court has jurisdiction under Article 28 of Chinese Civil Procedure Law.
Shanghai IP Court just accepted a patent infringement complaint by Huntsman Advanced Material (Switzerland) Gmbh for alleged 200 million RMB damages against Zhejiang and Shanghai companies regarding Chinese Patent ZL00106403.7. We will keep you updated about further development of this case.
According to recent 2015 U.S.-China Strategic & Economic Dialogue, China commits that the intermediate people’s court in the locality of the antimonopoly enforcement body issuing the administrative decision under the Anti-Monopoly Law (AML) would have jurisdiction over the administrative appeal regarding that decision; provided that when such decision involves intellectual property rights, and the issuing authority is located in Beijing, Shanghai or Guangzhou, the intellectual property (IP) court in that municipality would have jurisdiction over the administrative appeal.
Is your China-related IP agreement considered abusive under Chinese law? Foreign companies entered into or planning to reach IP related agreements with a Chinese party should be aware that new rules may affect the validity and enforceability of those agreements. The Chinese State Administration for Industry and Commerce (SAIC) on April 7, 2015 issued “Rules on the prohibition of the abuse of intellectual property rights to eliminate or restrict competition” (SAIC IP Rules, see http://www.saic.gov.cn/zwgk/zyfb/zjl/fld/201504/t20150413_155103.html). The SAIC IP Rules provide certain safe harbors for IP agreements related to China, and specify requirements for an operator with a dominant market position to comply with Chinese anti-monopoly laws in entering and enforcing IP Agreements related to China. A multi-factor, rule of reason analysis is generally adopted. The SAIC IP Rules will take effect on August 1, 2015.
An IP agreement related to China is presumptively considered in compliance with Chinese anti-monopoly law under the following two situations:
(a) An operator’s market share does not exceed 20 percent of the relevant market, or there are at least four (4) alternative and independent technologies on the relevant market;
(b) An operator’s market share does not exceed 30 percent of the relevant market, or there are at least two (2) alternative and independent technologies on the relevant market.
An operator with a dominant market position is prohibited from entering into and enforcing the following IP agreements related to China that may eliminate or restrict competition:
(1) refusal to license intellectual property rights;
(2) requiring another party of the agreement to trade only with the operator or its designated party;
(3) tying or bundling sale of additional products regardless of consumption habit or product functionality,;
(4) the practice of differential treatment to parties of similar conditions;
(5) exclusive grant-back for improvement to the relevant IP; and
(6) prohibiting challenge of the validity of the IP by the party of the agreement.
The SAIC IP Rules also restricts the use of IP pooling to affect the ability of a third party not a part of the IP pooling organization to challenge IP validity or license relevant IP or enter into R&D agreements. The Rules further prohibits abusive agreements related to IP standard setting.
The penalties for violation of the SAIC IP Rules are injunctions and confistication of 1%-10% of annual sales with an abusive agreement or a fine of no more than RMB500,000 without an agreement.
Any further inquiry may be directed to Jiwen Chen, Esq. at email@example.com.