On 27 February 2021 the IP Court of the Supreme People's Court promulgated the following reports:

  • Annual Report 2020;
  • Judicial Gist Synopsis 2020; and
  • Ten Exemplary Technology IP Cases of 2020.

Annual report

The IP Court's annual statistics indicate that 3,176 technology-related IP cases were docketed in 2020, which is an increase of 63% compared with 2019. Appeals accounted for approximately 82% of the cases docketed, with 1,948 civil cases (an increase of 102% compared with 2019) and 670 administrative cases (an increase of 178% compared with 2019). There were 376 cases involving foreign parties (including those from Hong Kong, Macau and Taiwan), which represents 12% of all docketed cases and an increase of 116% compared with 2019.

The average period for closing a second-instance civil proceeding in 2020 was 121.5 days. The average period for closing a second-instance administrative proceeding in 2020 was 130.7 days. A further categorisation of the newly filed civil appeals reveals that the IP Court docketed:

  • 435 invention patent disputes;
  • 754 utility model patent disputes;
  • 163 patent prosecution and ownership disputes (which represents a significant increase of 154 cases compared with 2019);
  • 360 computer software disputes;
  • 67 technical contractual disputes;
  • 44 technical secret disputes;
  • 30 monopoly disputes;
  • five disputes relating to the layout design of integrated circuits; and
  • 50 other disputes.

In 2020 the IP Court concluded a total of 2,787 cases, 59.8% of which upheld the trial court decision. Of the 1,742 civil appeals concluded, first-instance decisions were sustained in 44.7% (779) of the proceedings. Interestingly, this percentage nearly doubled for administrative appeals (87%, or 430 maintained out of 494 concluded).

Synopsis

The IP Court selected 55 exemplary cases and generalised 46 adjudicative rules that showcase the judicial philosophy, adjudicative methodology and approach being applied in hearing technology-related IP cases that are either intricate, complex or of a new type.

The adjudicative rules were distributed across:

  • court hearings of substance involving patent civil and administrative litigation;
  • proceedings pertinent to disputes over new plant varieties, technical secrets, computer software, layout designs of integrated circuits and monopoly; and
  • hearings of jurisdiction and other procedural cases.

The synopsis covers various matters – including:

  • factors to be considered in granting behaviour preservation in an anti-suit injunction setting;
  • parameters by which an alleged act could be ascertained to be "for the purpose of production and operation" in the sense of patent infringement;
  • the burden of proof in determining the amount of damages on the basis of the profit of infringement;
  • the acceptance of declaratory judgments on non-infringement during patent invalidation proceedings; and
  • the effect of claim modification in parallel invalidation procedures.

The synopsis is expected to harmonise judicial practice and increase the predictability of court proceedings in the IP field.

Exemplary technology-related IP cases

The court released 10 exemplary technology IP cases of 2020, which covered both substantive and procedural issues not only in traditional technical fields (eg, mechanical and chemical engineering), but also in emerging technical fields (eg, high-tech materials, chip technology and wireless communication). The following cases had been in the spotlight before making the list.

Huawei cases

Huawei filed three suits against Conversant, requesting the court to make a declaratory non-infringement judgment and determine standard essential patent (SEP) royalty among Conversant portfolios. Further, Huawei made an application to the court to enjoin Conversant from applying for enforcement of the Dusseldorf Court's 27 August 2020 judgment until it made a final decision over the parties' SEP licensing dispute.

The court granted Huawei's anti-suit injunction application. The grant was the first anti-suit injunction ruling made by a Chinese court in the IP area. The ruling aimed to help the two parties solve the dispute by putting an end to their ongoing proceedings in multiple jurisdictions. The court also installed a daily penalty measure to ensure the execution of its behaviour preservation verdict. The cases elaborated on the parameters and factors identified to be considered in the granting of behaviour preservation measures in an anti-suit injunction context, which is conducive to the exploration of the anti-suit injunction mechanism in China. The IP Court believes that the case effectively safeguarded national interests, judicial sovereignty and the businesses' legitimate interests.

'Carbomer' case

The 'Carbomer' technical secret case resulted in the IP Court granting the first punitive damages. Taking into due consideration the subjective malice of the infringer, its obstruction to the burden of proof and the duration and scale of infringement, the IP Court ordered punitive damages of over Rmb30 million (five times the financial losses suffered by the trade secret owner).

Vanillin case

In another technical secret case, which involved the food flavouring product Vanillin, the IP Court handed out the largest ever trade secret damages – Rmb159 million. This case, along with the 'Carbomer' case, conveys a strong signal that the IP Court is ramping up the judicial protection of intellectual property in the core technology of key sectors and stringently fighting malicious infringement.

Siemens case

Siemens was the copyright owner of NX series software. It filed for litigation against a Chinese company, Wolfer, for infringing its copyright. According to Siemens's application, the Guangzhou IP Court had served an evidence preservation verdict on Wolfer and conducted evidence preservation at its premises. Wolfer had obstructed the preservation process, which led to the abrupt termination of the evidence preservation procedure. The Guangzhou IP Court had found infringement and ordered Wolfer to pay Rmb500,000 in damages, the highest statutory damages prescribed by law.

In the appeal ruling, the IP Court increased the damages to more than Rmb2.61 million after taking into account the number and price of the infringing software and Wolfer's malice in impeding the evidence preservation procedure. This case underlines that all parties in a litigation proceeding must abide by the good faith principle and that there will be consequences for those impeding the due process.