Administrative Remedies against Patent Infringement in China
By Michael Zou
In China, if a patent infringement occurs, the patentee or the interested party may request government administrative departments to handle the infringement matter, or file a lawsuit with the court for a settlement.
Pursuant to Article 60 of the Patent Law in China, in the event that a dispute arises out of any exploitation of a patent without permission of the patentee, that is, the infringement upon a patent right, the parties shall settle the dispute through negotiations. If they are not willing to negotiate or fail to reach an agreement through negotiations, the patentee or any interested party may either bring a lawsuit with the people’s court, or request the patent administrative department, for settlement. If the government department of patent administration ascertains at the time of settlement that infringement exists, it may order the infringer to immediately stop the infringement act. The party dissatisfied may, within 15 days as of receipt of the notification, bring a lawsuit with the people’s court in accordance with the Administrative Procedural Law of the People’s Republic of China. If the infringer neither brings a lawsuit within the time limit nor stops the infringement act, the patent administrative department may apply to the people’s court for compulsory enforcement. The patent administrative department that settles the dispute may, upon request of the parties, hold a mediation regarding the compensation amount for infringement upon the patent right. If no agreement is reached through mediation, either party may bring a lawsuit with the people’s court in accordance with the Civil Procedural Law of the People’s Republic of China.
If products (hereinafter “infringing products”) infringing a patent are exhibited or sold at a fair or exhibition, or if there are any other patent infringements being found, in addition to gathering evidence and filing a lawsuit with court in China, the patentee can also choose to gather evidence and report the matter to the government department of patent administration (i.e. the Intellectual Property Bureaus of the local governments of various levels, hereinafter “IPB”), who will ascertain whether a patent infringement has been committed. If IPB determines that a patent infringement exists, according to the Patent Law and also the relevant administrative regulations and rules, IPB shall order the infringer to stop immediately the infringement act, in addition, IPB also has the power to take the following administrative measures to stop the infringement acts and prevent further infringements:
1. If a infringer produces infringing products, the authority shall order the infringer: (1) to stop immediately the activities of producing or manufacturing infringing products; (2) to destroy the special equipment and molds used for producing or manufacturing the infringing products; (3) not to sell or use the infringing products which have not been sold out or put the infringing products into market; (4) to destroy the infringing products;
2. If the infringer sells infringing products, IPB shall order the infringer: (1) to stop immediately the activities of selling the infringing products; (2) to destroy the remaining infringing products not being sold;
3. If the infringer offers for sale of the infringing products, IPB shall order the infringer: (1) to stop immediately the activities of offering for sale of the infringing products; (2) to eliminate the effects; (3) not to conduct any actual activities to sell the infringing products;
4. If the infringer imports the infringing products, IPB shall order the infringer: (1) to stop immediately the activities of importing the infringing products; (2) if the infringing products have arrived in the territory of China, the infringer shall not sell and/or use the infringing products, or to put the infringing products into market; (3) to destroy the infringing products; (4) if the infringing products have not yet arrived in the territory of China, IPB may send notification to customs about IPB’s decision on the handling of the matter.
5. IPB shall order an exhibitor who committed patent infringement at an exhibition: (1) to withdraw the infringing products from the exhibition; (2) to destroy or seal up the relevant promotion materials; (3) to replace or cover the exhibition signs relevant to the infringement; (4) to take other measures to withdraw the exhibitor from the exhibition;
6. If IPB ascertains that a patent infringement activity exists on an e-commerce platform and made a decision on the matter, IPB shall notify the provider of the e-commerce platform to delete, block or break the links to the web-page containing infringing products.
It is advisable that if infringing products are found at a fair or an exhibition, the patentee (or the interested party) should first try to gather as much evidence as possible on the site of the exhibition, such as taking from the infringer (exhibitor) the relevant promotion materials, business cards; taking photos and shooting videos of the infringing products, the promotion materials, the booth of the infringer (exhibitor), and the onsite activities of the infringer (exhibitor), etc. With the above evidence, the patentee can report the matter to IPB and to request IPB to handle the matter. Of course, as an alternative, the patentee (or the interested party) may also choose to file a lawsuit with the court against the infringement.
Advantage and Disadvantage of Administrative Measures
After the acceptance of the request to handle the patent infringement matter from a patentee or an interested party (hereinafter referred to as “the Requestor”), officers of IPB will go to the premises of the other party (hereinafter referred to as “the Respondent”, whom the Requestor claims to have committed patent infringement) to conduct an onsite investigation to see whether the Respondent produced or is producing the infringing products, and if infringing products are found on site, the officers of IPB will take pictures and will make a written record of the onsite investigation, including the record of the quantity of the infringing products being found. The pictures and records could later be transferred to court as evidence if the Claimant later files a lawsuit with the court. The above is the advantage to request the government administrative department, i.e. IPB, to handle patent infringement matters.
But there are also disadvantages for IPB to handle patent infringement matters. Although according to the regulations on handling patent infringement matters, IPB can order the infringer to stop the infringements and to destroy the infringing products and molds used for the production of the infringing products, if the infringer does not obey the order, IPB has to apply with the court to enforce the order, IPB cannot enforce their order by themselves. Also IPB cannot order the infringer to pay the patentee or interested party damages and losses caused by the infringement. If during the process, amicable settlement cannot be reached about the payment of damages and losses, the patentee or interested party would have to file a lawsuit with the court to claim for the damages and losses.
For a patentee or an interested party to request IPB to handle the patent infringement matters, the following documents are required to be prepared and submitted:
1. Request Form for handling patent Infringement dispute (The Form can be downloaded from the website of IPB);
2. Claimant’s identification documents, including:
(1) The registration documents of the Claimant (if the Claimant is a legal entity) to prove the Claimant’s current legal existence (these documents should be provided by the Claimant and would need to be notarized by a notary public and to be certified by the Chinese embassy/consulate in the country or region where the Claimant is located);
(2) The Certification of the legal representative of the Claimant (if the Claimant is a legal entity), which would need to be notarized by a notary public and to be certified by the Chinese embassy/consulate in the country or region where the Claimant is located;
3. Power of Attorney
The Power of Attorney is to authorize an attorney to represent the Claimant to submit documents to IPB and handle other matters during the process. This document would need to be notarized by a notary public and to be certified by the Chinese embassy/consulate in the country or region where the Claimant is located.
4. Claimant’s patent documents, including the Patent Certificate and documents to prove the current legal status of the patent, etc.
5. In addition to the above documents, the Claimant should also provide evidence to prove the patent infringements committed by the Respondent, such as:
(1) The registration documents of Respondent;
(2) Infringing products;
(3) Evidence to prove the production, use, sale of the infringing products, such as: sales invoices, receipts, letters of quotation, materials for promotion of infringing products, materials advertising the infringing products, etc.