Chinese Patent Litigation

Chinese patent litigation has developed rapidly since the establishment of specialized IP courts in 2014. China is now one of the most active patent litigation jurisdictions in the world, with specialized procedures, substantial damages awards, and an increasing number of international patent disputes being litigated in Chinese courts.

IP Courts and Jurisdiction

Patent litigation in China is handled by the specialized Intellectual Property Courts (IP courts) in Beijing, Shanghai, and Guangzhou, as well as by IP tribunals in other intermediate people’s courts. The SPC’s Intellectual Property Tribunal, established in 2019, serves as the exclusive appellate court for patent and trade secret cases, ensuring uniform interpretation of patent law.

The IP courts have exclusive jurisdiction over: patent infringement cases (first instance); patent validity challenges (administrative cases); technology contract disputes; and trade secret cases. The IP courts apply specialized procedures, including: technical investigation officers; protective orders for confidential information; early disclosure and discovery; and expert witness procedures. The concentration of patent cases in specialized courts has improved the quality and consistency of patent adjudication.

Patent Infringement

Patent infringement is governed by the Patent Law (1984, amended 1992, 2000, 2008, 2020). The law protects invention patents (faming zhuanli, 发明专利), utility model patents (shiyong xinxing, 实用新型), and design patents (wai guan sheji, 外观设计). The 2020 amendment increased damages, introduced the partial design protection system, and addressed the patent linkage system for pharmaceuticals.

Infringement is determined by comparing the accused product or method with the patent claims. The doctrine of equivalents is applied, requiring that the accused product perform substantially the same function in substantially the same way to achieve substantially the same result. The court applies claim construction to determine the scope of patent protection, relying on the claims, specification, and prosecution history.

Claim Construction

Claim construction is a critical stage in Chinese patent litigation. The court interprets the patent claims to determine their scope, applying the principles of: the ordinary meaning of claim terms as understood by persons skilled in the art; the primacy of the specification in interpreting ambiguous terms; and the prosecution history estoppel (preventing the patentee from claiming scope surrendered during prosecution).

The IP courts have developed substantial expertise in claim construction, and the SPC’s IP Tribunal has provided guidance on claim construction principles. The IP Tribunal has held that: claim terms should be interpreted consistently throughout the patent; functional language defines the scope of protection by reference to the corresponding structures disclosed in the specification; and the specification may limit the scope of claims where the patentee has made clear statements about the scope of the invention.

Evidence Preservation and Discovery

Chinese patent litigation provides for evidence preservation (zhengju baocun) before trial. The court may, upon application, order the seizure or inspection of evidence at the alleged infringer’s premises without prior notice. Evidence preservation orders are available where the applicant shows: a reasonable basis for believing that infringement is occurring; that the evidence is in the alleged infringer’s control; and that there is a risk of destruction or concealment of evidence.

The court may also order the defendant to disclose evidence in its control, including manufacturing records, financial documents, and technical specifications. The 2020 Patent Law amendment introduced a discovery mechanism, requiring the defendant to provide evidence to prove the amount of damages. The court may draw adverse inferences if the defendant fails to comply with evidence disclosure orders.

Preliminary Injunctions

Preliminary injunctions (xian wei jinling) are available in patent infringement cases where: patent rights are valid and stable; infringement is highly likely; irreparable harm would occur in the absence of an injunction; and the balance of convenience favors the applicant. The court may require the applicant to provide security.

Chinese courts have become more willing to grant preliminary injunctions in patent cases, particularly in cases involving standard-essential patents (SEPs) and pharmaceutical patents. In Huawei v. Samsung (2018), the Shenzhen court granted a preliminary injunction preventing Samsung from manufacturing and selling infringing smartphones. The development of preliminary injunction practice has made Chinese patent litigation more effective for right holders.

Damages

The Patent Law provides several methods for calculating damages: actual loss of the patentee; illegal profit of the infringer; reasonable royalty (multiplied by a factor); and statutory damages (fixed amounts up to RMB 5 million, increased to RMB 5 million in 2020). The 2020 amendment introduced punitive damages of up to five times the calculated damages for intentional infringement.

The damages calculation has been the subject of extensive judicial development. Courts have awarded substantial damages in landmark cases, including: Huawei v. Samsung (RMB 80 million); Sanxing v. Tongfang (RMB 50 million); and Lyondell v. Shanghai Petrochemical (RMB 100 million). Statutory damages are commonly awarded where the patentee cannot prove actual loss or the infringer’s profit.