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The Supreme Court Requires Thorough Investigations Into Evidence To Assess Whether Substantial Differences Exist In Determination Of Equivalent Infringement
According to the Patent Infringement Determination Guidelines and current court practices, the first step to assess patent infringement is, in principle, to break down the technical features in a claim of a patent to facilitate following steps of comparing the features of the claim with those of the product accused of patent infringement. The breakdown shall be carried out in the manner that any technical feature is deemed as a basic comparison unit if it realizes a certain function or delivers a certain result independently. Such breakdown process is to facilitate the infringement analysis under the "Doctrine of Equivalents" (DOE) (the second phase) on technical features not "literally reading on" (the first phase) the accused product. During the second phase analysis, the so-called "triple identity test" is generally employed. Said "triple identity test" is to analyze the "way, function and result" of a technical feature not literally reading on the accused product; if the accused product adopts substantially the same way and generates substantially the same function and result as the patent claim does, it should be concluded that the accused product constitutes equivalent infringement. Another acceptable method to assess literal infringement in the second phase is the "insubstantial difference test"; that is, if the difference between a feature of the patent claim and the corresponding feature of the accused product is deemed insubstantial, or replacing the feature of the patent claim with the corresponding feature of the accused product is known to a person having ordinary skill in the art at the time of infringement and such replacement realizes substantially the same function, it should be concluded that the accused product constitutes equivalent infringement. Both tests aim to prevent an infringer, who actually adopts the technical measure of a patent and only makes some insubstantial modifications, from being exempted from infringement liability.
Generally speaking, technical features disclosed in a patent claim relating to mechanical or electrical engineering are more suitable for breakdown into basic comparison units that realize a certain function or deliver a certain result independently. Therefore, the triple identity test is often utilized in these technical fields in determining equivalent infringement under DOE. However, in a recent judgment, the Supreme Court holds that it is insufficient to conclude patent infringement with a general triple identity test; only after a thorough investigation has been conducted into the evidence and relevant arguments that the accused infringer has submitted and raised, and after a comparison has been made to ensure no substantial difference exists between the claimed invention of the asserted patent and the accused product, can a conclusion of equivalent infringement be reached. A summary of the court case is as follows:
In September 2015, the Intellectual Property Court (hereinafter referred to as the "IPC") delivered Judgment No. 2014-Min-Zhuan-Shang-Zi-No.29 concerning infringement on a patent relating to a bicycle wheel hub. The court not only employed the "triple identity test" but also the "insubstantial difference test," and both led to the same conclusion that the accused product constitutes equivalent infringement under DOE. Upon appeal, the Supreme Court rendered Judgment No. 2017-Tai-Shang-Zi-No.585 on April 24th, 2017, which remands the case on the following reasons:
1. There are up to four technical features of the patent claim not literally reading on the accused product. Therefore, there are indeed differences.
2. Certain structural differences between the two have resulted in different operations. In particular, with regard to the bicycle that is made completely from the technique of the patent, "consumers have to, before operation, rotate the pedals back by foot or hand to prevent the pedals from rotating at the time of actuation. This, obviously, brings a lot of inconveniences and is troublesome to consumers."
3. According to the accused infringer, the accused product is implemented from its own utility model patent No. M440895, which has been identified as different from the asserted patent by the Petitions and Appeals Committee of the Ministry of Economic Affairs (MOEA). (Author's note: the patentee who brought this civil suit against the accused infringer once filed a cancellation action using the asserted patent as prior art against the accused infringer's patent No. M440895, but the Petitions and Appeals Committee of the MOEA and the IPC who reviewed the cancellation case in the further appeal procedure both concluded that patent No. M440895 has an inventive-step and differs from the asserted patent.)
According to the Supreme Court, it is critically important to thoroughly investigate evidence in determining whether the asserted patent and the accused product employ substantially the same way and realize substantially the same function and result; however, the IPC concluded that the two employ substantially the same way and realize substantially the same function and result merely because the two both exploit cam wheels or a similar system. There are still doubts about whether a person having ordinary skill in the art could easily conceive the differences and come up with a replacement.
Regarding the above third item, the accused infringer may, logically speaking, still constitute patent infringement even if the accused product is a complete implementation of his/her own patent (one of the exmples is that the accused infringer's patent is a "reinvention" that takes advantage of others' patented techniques). Patent infringement assessment should be conducted on the basis of the technical features of the asserted patent claim and the accused "product"; whether the accused product is an implementation of another patent is an issue that needs to be considered separately. However, it may be that the Supreme Court is concerned about a potential contradiction of the facts found in the two independent cases (if the accused product is indeed implemented from "another patent," which has already been identified as different from the patent asserted in the civil suit). As for the technical aspects, differences in consumers' operation of the bicycles are not doomed to affect the result of the "triple identity test" because the operational differences might not directly result from the technical feature differences between the claim of the asserted patent and those of the accused product.
The Supreme Court decides to remand the case requiring the IPC to conduct a "thorough" investigation into the patent claim and the evidence presented by the accused infringer and to check whether the replacement can be easily completed from the perspective of a person having ordinary skill in the art in determining whether substantial differences exist. It is worth observing how the IPC deals with the remanded case and acts in response to the Supreme Court's holdings.