Patents

Under China’s Patent Law, a party, not satisfied with the decision on reexamination or on the invalidation petition made by the Patent Reexamination Board (PRB), may seek judicial review. According to China’s Administrative Procedure, the review of patent cases shall be confined to the legality of the decisions, i.e., whether proper procedure is followed, the decisions supported by evidence, and laws properly applied.

In practice, however, some courts overreach the above prescribed examination scope in order to improve judicial efficiency. For example, a court would entertain invalidation reasons not adduced by the parties and not considered by the PRB, or render a direct judgment on the validity of the patent, which affects the predictability of the patent litigation process.

Not long ago, the Supreme People’s Court clarified the examination scope of administrative patent litigation when deciding an administration arraignment case concerning the invalidity of a utility model patent in PRB vs. AJQ Company (AJQ) and Wang Yushan. The case involved the utility model patent No. 98248629 for CLEANER WASTE COTTON WITHHOLDING SYSTEM, issued to Wang Yushan. AJQ petitioned to invalidate the patent by reason of Art. 22 of the Patent Law (lack of inventiveness). The PRB found claims1 through 9 invalid, and claim 10 valid. AJQ was dissatisfied, and sought review by Beijing No.1 Intermediate People’s Court which sustained the Board’s decision. AJQ then further appealed to Beijing High People’s Court which reversed the court below and the Board, and went ahead invalidating all the claims. The PRB, unsatisfied with this second instance decision, sought reconsideration by the Supreme People’s Court.

In the ruling of the case, the Supreme People’s Court found that, among the invalidation reasons, concerning novelty of the invalidation petitioner, Evidence 5 was used in combination with other evidence to prove public use, not to prove the printed matter was publicly available; the assertion that Evidence 5 was public printed material was made, in combination with other evidence, to challenge inventiveness. The PRB contemplated the issue of Evidence 5 as prior art in combination with other evidence. By the petitioner’s statement and the purpose of introducing its evidentiary materials in the invalidation proceeding, petitioner never relied on Evidence 5 alone for challenging novelty of claim 10. Under the circumstances that neither did the petitioner assert, nor the PRB contemplate the issue, the court of second instance made its own finding on novelty on the presumption that neither parties disputed the fact that the subject matter recorded in Evidence 5 is identical with claim 10, which overreached the examination scope of the invalidation examination determination and violated the examination principle of legality in the administrative litigation.

The Supreme People’s Court found that, according to China’s Administrative Litigation Law, even if the PRB’s decision was erroneous, the reviewing court cannot modify the decision on its own motion, and can only vacate and remand. To render a judgment in its own opinion on the patent’s validity is act outside the judicial province, in violation of legality review principles of the overreached the Administrative Process.

This is the first Supreme People’s Court ruling on the scope of judicial review of patent administrative decisions, which may have far-reaching impact on, and enhanced predictability of, future patent litigation In addition, protecting judicial fairness generally, the judgment is favorable to the parties. If the first instance court, and even the second instance court, can directly determine the validity of the patent right, the chance to seek relief is less if the parties protest the judgment.

 

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