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Delivering Infringing Products after the Effective Date of a Patent in Fulfillment of a Contract Concluded before that Date Still Constitutes Patent Infringement
Article 58, Paragraph 1 of the Patent Act clearly stipulates that “Unless otherwise provided for in this Act, the patentee of an invention patent has an exclusive right to prevent others from exploiting the invention without the patentee’s consent,” and Paragraph 2 of the same Article provides a definition for the so-called “exploiting,” stating that “Exploiting means the acts of manufacturing, offering for sale, selling, using the products, or importing the products for the aforementioned purposes.” The aforementioned provisions are also applied mutatis mutandis to utility model patents (see Article 120 of the Patent Act). Since the types of conduct involved in actual commercial activities may be very diverse, when it comes to a specific type of conduct not listed in the aforementioned provisions, doubts may arise regarding how to apply the law.
In the 2020 Min Zhuan Shang Zi No. 45 Civil Judgement recently rendered by the Intellectual Property and Commercial Court on 22 August 2022, the court considered that "delivery" is a part of the "selling," which still belongs to patent infringing conduct. In this case, Plaintiff A, who is a patentee or a joint owner of two new utility model patents in dispute, accused Defendants B and C of jointly selling or making a number of products that infringed the patents in dispute. Defendant B entered into a product supply contract for the disputed product with a third party before the patent rights thereto became effective; after the patents in dispute became effective, and Defendant B merely "delivered" the products in dispute to the third party. However, the court still held that Defendant B's conduct constituted patent infringement, and the rationale is as follows.
1. The patent terms of the two patents in dispute are from 21 February 2018 to 30 October 2027, and from 11 May 2018 to 21 January 2028. Therefore, infringement upon said patents can only be established if it occurs between the above patent terms.
2. Article 58, Paragraphs 1 and 2 of the Patent Act expressly stipulate that “Unless otherwise provided for in this Act, the patentee of an invention patent has an exclusive right to prevent others from exploiting the invention without the patentee’s consent; exploiting means the acts of manufacturing, offering for sale, selling, using the products, or importing the products for the aforementioned purposes.” The act of offering for sale is aimed at making a third party aware that the infringing product(s) is able to be manufactured or delivered, so that such party can expect to obtain de facto control over the infringing product(s). The aforementioned provision was established on 6 February 2003 in view of Article 28, Paragraph 1 of the “Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) of the World Trade Organization (WTO) . The provision includes "offering for sale" in the scope of the patent right so as to expand the protection for a patentee. Since the delivery of an infringing product in fulfillment of a product supply contract not only puts the infringing product into circulation but also impedes the exercise of the exclusive right of the patentee, such a conduct is more serious than "offering for sale" and thus is naturally considered a part of selling.
3. Although Defendant B entered into a product supply contract with a third party on 26 December 2017 and then delivered the infringing product in dispute on 15 June 2018, and the two patents in dispute had not been granted patent rights at the time of concluding the contract, Defendant B’s conduct shall still be recognized as patent infringement since delivery of the infringing products in dispute occurred between the patent terms of the two patents in dispute.