Necessity and Feasibility of Optimizing Patent Invalidation Procedure (II)

SPC IP Court Judge Cui Ning: Necessity and Feasibility of Optimizing Patent Invalidation Procedure (II)

III. Limitations of the current solutions

At present, the solutions in the judicial and administrative procedures respectively cannot solve the problems brought by the “dual system” concerning patent right confirmation and infringement. Some of the measures are just temporary. For example, Article 2 of the Interpretation (II) of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases stipulates that “If the right claim claimed by the patentee in a patent infringement action is declared invalid by the Patent Reexamination Board, the People's Court hearing the case of dispute over infringement of patent rights may decide to reject the right holder's lawsuit based on the invalidation claim.” And in practice, it has shortened the trial cycle. However, this solution is a temporary measure at the expense of the interests of right holders without modifying the legal solution to the drawbacks of the dual system. When the invalidation decision changes, the parties need to restart the progress. In this scenario, the market loss of the right holders and the costs of restarting the progress are not compensated. This kind of solution cannot serve as a substitute for legislation to solve the shortcomings of the "dual system".

The judiciary and the administration can work together to solve some specific problems, but they have different purposes. Besides, the coordination between them is costly and sometimes unachievable, especially on certain major issues. Therefore, coordination must be carried out at the legislative level. As for the view that the administrative agency is more capable in the specialized fields and the judicial procedure can be simplified into a procedural review, it does not conform to the spirit of the TRIPs Agreement. 

The feasibility of the optimization of the patent invalidation procedure

  During the “two sessions” in 2019, Luo Dongchuan, the vice president of the Supreme People's Court, made four legislative proposals for the revision of the Patent Law, namely:

1. People’s courts should be clearly granted the judicial power to modify administrative acts;

2. Patent invalidation defense should be clearly stipulated;

3. It should be made clear that the patent administration department under the State Council does not act as a defendant in patent invalidation proceedings;

4. It should be made clear that the patent administration department under the State Council may, when necessary or in accordance with the requirements of the people's courts, appear in court to express opinions on specific issues.

We believe these four recommendations are feasible in legislation:

1. There are no technical obstacles to legislation. At present, the main countries and regions of intellectual property rights have basically recognized the particularity of patent litigation procedure, especially the procedure of invalidation of patent right. It is difficult to classify it simply into civil or administrative proceedings. Even if some countries, such as Japan, stipulate the invalidation of patent rights in the Administrative Litigation Act, its specific provisions are still different from the special provisions of general administrative litigation. To know this will help us break through some of the limitations in our past thinking. Besides, the above legislative proposals can also be traced back to China's Administrative Litigation Law and Civil Procedure Law. At present, the judicial power to modify administrative acts has been applied in administrative punishment with good effect. And it is also legitimate to examine the basis of rights in civil proceedings, and the current practice is based on valid presumption.

2. Patent invalidation defense will not increase the burden on the court. First, the reason for introducing patent invalidation defense is not to evaluate whether the judicial or the administrative procedures have more reasons to conduct the review in specific cases, but to reduce the number of administrative patent invalidation disputes that become lawsuits and its overlapping with civil infringement procedures. In this way, patent protection system can be fundamentally improved and the “dual-system” problem solved. Judging from the more mature legislative cases and supporting systems in foreign countries, the procedural guidance at different stages can reduce the number of administrative litigations and will not significantly increase the court's trial burden. Secondly, there are 32 higher courts and 43 intermediate courts in China that have jurisdiction over patent infringement cases. With 75 institutions dealing with patent invalidation defense, compared with all the cases handled by an exclusive court, the burden relief is obvious. If these 75 institutions can carry out their work with the Supreme People's Court Intellectual Property Court as the second instance court, their professionalism and law enforcement uniformity can also be greatly improved.

In conclusion, to optimize the litigation procedure of patent invalidation by revising Patent Law is necessary on the macro level and urgent at the realistic level. It can overcome the limitations of existing solutions and is feasible. In the specific system design, we also need your recommendations and collaboration to make our patent protection system better.