According to the China Patent Law, when enforcing patent rights, a patentee or an interested party (such as the licensee of an exclusive patent licensing arrangement) may choose one of the below-listed enforcement options:

 

 

A patentee or an interested party (such as the licensee of an exclusive patent licensing arrangement) may choose to file a civil suit with the court against the patent infringement.

 

 

A patentee or an interested party (such as the licensee of an exclusive patent licensing arrangement) may choose to file a complaint with the patent administrative department (such as a local patent office) against patent infringement.

 

The above-mentioned options are normally referred to as a “two-track enforcement practice,” which was prescribed in the first Patent Law implemented from 1 April 1985. This two-track enforcement practice is one of the most important features of China’s patent system. 

 

According to Article 65 of the Patent Law, the practice of a patent without the patentee’s authorization shall constitute patent infringement. In case of an infringement dispute, the parties concerned may negotiate and settle the dispute themselves. If a party is not willing to negotiate or if both parties cannot reach a solution for settling the dispute, the patentee or an interested party (such as the licensee of an exclusive patent licensing arrangement) may file a suit with the court or file a complaint with the patent administration department to settle the dispute. For a complaint which is filed with the patent administration department, if the infringement is confirmed, an order immediately refraining further infringement shall be issued. If a party is not satisfied with the decision issued by the patent administrative department, it may, within 15 days as of receipt of the decision, file an administrative suit with the court pursuant to the Law of the Administrative Suit Procedure to contest the decision. If the accused infringer fails to timely file an administrative suit and it does not discontinue the infringement as ordered, the patent administration department may apply for an order issued by the court for compulsory execution of the order. A patent administration department may, upon requests by the parties, mediate as to the amount of damage compensation caused by the patent infringement. If such mediation fails, the concerned party may file a suit with the court pursuant to the Civil Procedure Law.

 

Given the above, a patentee or an interested party (such as the licensee of an exclusive patent licensing arrangement) may choose to enforce its patent through either filing a suit with the court or filing a complaint with the patent administration department with jurisdiction over the patent infringement dispute based on the place where the infringer is located, or the place where the infringement was committed (including the place where the infringement is committed and the place where the result of the infringing act occurs).

 

When making a choice between the judicial procedure and the administrative adjudication procedure, the major factors for consideration may include the following:

 

1.   Relevant investigation procedures, such as on-site inspections and others, are normally available in the administration adjudication of patent infringement. According to 69(2) & (3) of the Patent Law, the patent administration department shall be entitled to, upon request by a patentee or an interested party (such as the licensee of an exclusive patent licensing arrangement), take the following investigation actions:

 

 

(2)     Conduct on-site investigation at the places where the suspected Infringing act was conducted by the concerned party; and

 

(3)     Investigate the products related to the suspected infringing act

 

When the investigations stated above are conducted by a patent administration department, the concerned party must provide necessary assistance and cooperate with such investigations, and the concerned party shall not refuse or create obstacles as to the investigations. As compared with the corresponding investigations available in the judicial procedure against patent infringement, which normally are more complicated, the investigations in the administration adjudication procedure stated above may facilitate both parties' clarification of the fact with more flexibility.

 

2.   It may take several months to conclude the administration adjudication of a patent infringement dispute, which is shorter than the time needed for judicial procedure against patent infringement.

 

3.   According to Article 65 of the Patent Law, when handling a patent infringement dispute by the patent administration department upon request by a patentee or an interested party (such as the licensee of an exclusive patent licensing arrangement), if patent infringement is confirmed, an order immediately prohibiting further infringement shall be issued (e.g.,  a decision of discontinuation of infringement”). There is no fine/punishment, and the injured party cannot directly get a damage compensation award in the administration procedure, which is available in the judicial procedure against patent infringement. If a concerned is not satisfied with the decision of discontinuation of infringement stated above, it may, within 15 days from the date of receiving the said decision, file an administrative suit with the court pursuant to the Law of Administrative Suit Procedure. If the accused infringer fails to timely file an administrative suit and it does not discontinue the infringement as ordered, the patent administration department may apply for an order issued by the court for compulsory execution of the order. A patent administration department may, upon requests by the parties, mediate as to the amount of damage compensation caused by the patent infringement. If such mediation fails, the concerned party may file a suit with the court pursuant to the Civil Procedure Law.

 

4.   Patent administration departments may not be equipped with adequate technical resources (such as officers with technical skills or experience) to deal with patent infringement disputes involving more complicated technologies. This may differ from handling patent infringement disputes by courts (especially IP courts). In the past, administration adjudication procedures were normally used for handling design patent disputes which are less complicated.

 

5.   Generally speaking, the cost for taking the administration adjudication procedure may be lower than that for judicial procedure because the judicial procedure is normally more complicated and it takes longer time.

II.       Major Changes of 2021 Patent Law Regarding Handling Patent Infringement Disputes Through Administrative Adjudication Procedure

According to Article 79 of the current Implementation Rules of the Patent Law (Remarks: the amendment of the Implementation Rules in line with the 2021 amended Patent Law is still ongoing at the time of writing this article), the patent administration departments stated in the Patent Law and its Implementation Rules refer to the departments responsible for the administration work concerning patent affairs, which are set up by the people's government of any province, autonomous region, or municipality directly under the Central Government, or by the people's government of any city divided into districts which has a large amount of patent administration work to attend to and has the ability to deal with the matter. Prior to the implementation of the 2021 June amendment of the Patent Law, the China National Intellectual Property Administration (CNIPA) was only entitled to administer and supervise the handling of the administrative adjudication procedure against patent infringement disputes for the entire country; complaints filed against patent administration departments through the administration adjudication procedure were handled by the aforementioned patent administration departments (such as local patent offices but not the CNIPA). Nevertheless, the 2021 June amendment of the Patent Law brought the following provision (Article 70) into the Patent Law:

 

“The Patent Administration Department under the State Council (CNIPA) may, upon request by a patentee or an interested party, handle patent infringement disputes with significant nationwide impact.”

  

The above-mentioned new Patent Law provision, based on the two-track enforcement practice, strengthens the administration adjudication proceedings that can be taken to resolve patent infringement disputes. The CNIPA is thus entitled to handle patent infringement disputes with important nationwide significance.

To guide the implementation of the newly added provision (Article 70) of the Patent Law as stated above, through which the CNIPA is empowered to handle patent infringement disputes with significant nationwide impact, the CNIPA, on 26 May 2021, announced the Regulations Governing Administration Adjudication of Important Patent Infringement Disputes (hereinafter referred to as “the Regulations”) with a total of 27 provisions via its Publication No. 426. The major provisions of the Regulations are illustrated as follows:

 

1.    A patent infringement dispute under any of the following situations is considered an “important patent infringement dispute” (Article 3):

 

(1)      where it involves important public interest;

(2)      where it may cause important impact to the business industry;

(3)      where it is an important matter involving administration districts of more than one province; and

(4)      where it is a dispute that may cause any other important impact.

 

2.    A request for administrative adjudication of an important patent infringement dispute shall meet the requirement set forth in Article 3 as well as the below-listed requirements (Article 4):

3.    For a request for administrative adjudication complying with the requirement set forth in Article 4, the CNIPA shall, within 5 working days from the date of completing the filing of the request, enter the case into record and send a notification to the requesting party; the CNIPA shall form a panel within 3 or more panel members (with an odd total panel member number) to handle the dispute. Where the dispute involves complicated issues or any other special situation, upon a special approval, the time limit for completing the filing of the request can be extended for 5 working days. Where a request does not meet the requirement sent forth in Article 4, the CNIPA may, within 5 working days from the date of receiving the request, issue a notification to the requesting party informing (with explanations) that the request is not accepted. For a patent dispute that does not qualify as an important dispute, the CNIPA shall not accept the request and it shall notify the requesting party to file a request with the local patent administration department for handling (Article 6). 

4.    In case of an important patent dispute, a patent administration department under a province, an autonomous region or a municipality may report to the CNIPA asking for its administration adjudication of said dispute (Article 7).

 

5.    Anofficer handling the administrative adjudication of a patent infringement dispute must be qualified with a special certificate by the CNIPA (Article 8).

 

6.    The CNIPA shall, within 5 working days from the date of filing a request for administrative adjudication, serve the opposite party with a copy of the request and its attachments and order the opposite party to file a defense within 15 days from the date of service. If the opposite party fails to file a defense in time, the handling of the case will not be affected. If the opposite party files a defense, the CNIPA shall, within 5 working days from the date of filing the defense, serve the requesting party with a copy of the defense. The CNIPA may combine the handling of multiple requests involving the same patent (Article 10).

7.    Either party shall bear the burden of proof and submit evidence as to its allegation(s). If a party is unable to collect the required evidence for an objective reason, it may submit prima facie evidence and reasons in support of its allegations and request the CNIPA in writing to proceed with the relevant investigations and checks. Based on the need for investigating the facts of the dispute, the CNIPA may conduct investigations and checks pursuant to laws. The investigations and checks must be conducted by two or more panel members who should show their qualification certificates to the parties concerned and other relevant persons (Article 12)

8.    The panel members may exercise the discretions as listed below when conducting investigations or checks (Article 13):

(1)      To question the concerned party and other relevant parties or Individuals for investigating the facts of the accused patent infringement;

(2)      To conduct on-site investigation at the place where the accused patent infringement occurs; and

(3)      To check the products related to the accused patent infringement.

 

When conducting the investigations or checks, the concerned parties or other related individuals shall provide assistance and cooperation and they shall not refuse or disturb the investigations or checks. Depending on the need and the actual situation, the CNIPA may engage a local patent administration department for implementing the investigation and check work. 

 

9.    Where a patent infringement dispute involves complicated technical issues, for which inspection and assessment is needed, the CNIPA may, upon request by either party, engage an organization to conduct the inspection and assessment. Where an application for investigation and assessment is made by a party, the organization engaged for the investigation and assessment work can be decided based on the negotiation between the parties. If the negotiation fails, the organization shall be decided by the CNIPA. Inspection and evaluation opinions which have not been cross-examined shall not be used as the basis for the administration adjudication decision. The parties may reach an agreement on the investigation and assessment fees, which shall govern both parties.  In the absence of such fee agreement, the fee shall be advanced by the party requesting investigation and assessment, and will be borne by the losing party (Article 14).

 

10.  The CNIPA may assign technical investigation officer(s) to participate in the case handling and to provide technical investigation opinion. The technical investigation opinions may be referenced by the panel when dealing with the technical issues. Regulations governing the technical investigation officers shall be promulgated separately (Article 15).

11.  The CNIPA shall, based on the need in the case handling, decide whether to conducting hearing(s). Where a hearing will be conducted, the CNIPA shall notify the parties of the date and place of thehearing at least 5 working days prior to the hearing date. If a party does not attend the hearing for a justified reason or if a party quits midway through the hearing, it shall be considered that the request for handling the case is withdrawn provided that the party quitting from the hearing is the requesting party of the case. If the party quitting from the hearing is the opposite party, it shall be considered that said party is absent from the hearing (Article 16).

12.  Under any of the following situations, a party may request for suspension of the case handling and the CNIPA may also decide to suspend the case handling at its discretion (Article 17):

 

(1)      where the opposite party files a patent invalidation petition which has been duly accepted by the CNIPA;

(2)      where one of the parties passes away and it is during the waiting period to determine whether the successor of the deceased party will participate in the request for an administrative adjudication procedure;

(3)      where a party losses capacity for civil conduct and its legal representative has not been confirmed;

(4)      where a party is a judicial person or an organization, which no longer exists, and the party taking over the rights and interests of the said party has not been confirmed;

 

(5)      where a party cannot participate in the administrative adjudication procedure for reason(s) not attributable to it;

(6)      where the handling of the case under administrative adjudication procedure must be based on the result of another case which has not been decided; and  

 

(7)      where there exists any other situation for which the suspension is needed.  

 

13.  The CNIPA may decide not to suspend the handling of theadministrative adjudication under any of the following situations (Article 18):

(1)    where a search report or a patent right evaluation report furnished by the requesting party does not show any patentability defect with the concerned utility model patent or design patent under dispute;

 

(2)    where a decision has been issued for a patent invalidation petition, confirming that the concerned utility model patent or design patent under dispute is valid; and

 

(3)    where the reason for requesting suspension by a party is obviously groundless.

 

14.  The CNIPA may dismiss a case under any of the following situations (Article 19):

 

(1)    where the filing of a request is accepted but it is later found that the request does not meet the requirements for filing;

 

(2)    where the party requesting for administrative adjudication withdraws its request;

 

(3)    where the party requesting administrative adjudication passes away or revokes it registration, and there is no successor or the successor withdraws said request for administrative adjudication;

 

(4)    where the party opposite to the party requesting for administrative adjudication ("opposite party") (passes away or revokes its registration, and there is no party that shall take over the opposite party's obligation; and

 

(5)    where there exists any other situation, for which withdrawal of the request for administrative adjudication is needed.

 

16.  The CNIPA may coordinate for both parties to proceed with mediations. Where both parties reach an agreement, the CNIPA shall make a record of the mediation agreement, add the official chop and have it signed by both parties. Where a mediation fails, the CNIPA shall issue a decision for the administrative adjudication in time (Article 21).

 

17.  For an administrative adjudication of a patent infringement dispute, the CNIPA shall conclude its handling within 3 months from the date of accepting the administrative adjudication request. For a case involving a complicated issue or any other specific situation which cannot be concluded within the time limit, an extension of 1 month will be allowed based on a special approval. For a case which involves a complicated issue or any other specific situation which still cannot be concluded within the extended time limit, a reasonable extension shall be allowed based on a special further extension approval. During the procedure of an administrative adjudication case, the time for suspension, publication and inspection/evaluation etc., shall be excluded from the calculation of the time limit for concluding the case as stated above. In case of amending the request, adding a co-requesting party and adding a third party, the time limit for concluding the case shall be re-calculated from the date of making the above-mentioned amendment or addition (Article 22).

 

18.  When issuing a decision for an administrative adjudication case, the CNIPA shall make an administrative adjudication decision with the official chop affixed thereto. If the administrative adjudication decision confirms the patent infringement, the CNIPA shall order an immediate discontinuation of the infringing act, and, depending on the actual need, notify the relevant government agency or the department under the local government, asking for their assistance in stopping the infringing act. Where a party is not satisfied with the administrative adjudication decision, it may, within 15 days from the date of receiving the decision, file an administrative suit with the court pursuant to the Law of Administrative Suit Procedure. Unless it is otherwise prescribed by law, the execution of the administrative adjudication decision shall not be stopped during the procedure of the administrative suit. If the opposite party fails to file a suit within the time limit and it continues the infringing act, the CNIPA may ask the court for compulsory execution of the administrative adjudication decision. After an administrative adjudication decision is issued, such decision shall be published pursuant to the Regulations on Disclosure of Government Information for public access. When making such publication, information involving trade secrets shall be deleted (Article 23). 

 

After the implementation of the 2021 amendment of the Patent Law and the Regulations Governing Administration Adjudication of Important Patent Infringement Disputes on 1 June 2021, the CNIPA, on 5 November 2021, accepted the filing of two requests for administrative adjudication of patent infringement (Case Nos. 【2021】Guo Zhi Bao Cai Zi No. 1 & 【2021】Guo Zhi Bao Cai Zi No. 2), these two cases involve the same patent but the opposite party in each of these cases is different. The concerned patent is Patent No. ZL201510299950.3 (Title of Invention: 8 - [3 - Amino - piperidine - 1 - yl] - xanthine compound, its preparation method and the use of the pharmaceutical preparationand the party requesting administrative adjudication) of which the patentee is Boehringer Ingelheim Pharma of Germany. The opposite party in each of the two cases is Guangdong East Sunshine Pharmaceutical Co., Ltd & Yichang East Sunshine Changjiang Pharmaceutical Co., Ltd respectively.

 

For the above-mentioned two patent infringement disputes, the requesting party submitted to the CNIPA filing documents prescribed in Article 5 of the Regulations Governing Administration Adjudication of Important Patent Infringement Disputes, and it further submitted to the CNIPA a certifying letter issued by the concerned local patent office confirming that “the said disputes are patent infringement disputes with significant nationwide impact.” The CNIPA accepted these two requests after review them and it formed a panel consisting 5 members and assigned 2 technical investigation officers to proceed with the handling of these cases. The CNIPA on 27 July 2022 issued decisions as follows:

 

1.    To order the opposite party in each of these two cases to immediately stop manufacturing, selling and/or offering for sale the products infringing on the concerned patent; and

 

2.    To order the opposite party, named Guangdong East Sunshine Pharmaceutical Co., Ltd toimmediately withdraw the online listing of the product Lina gliptin tabletsfrom the online pharmaceutical product purchasing platform.

 

The above-mentioned cases are the first batch of patent infringement cases with significant nationwide impact, which were handled by the CNIPA under the administrative adjudication procedure. The handling and decisions for these two cases has expanded the functions of administrative adjudication procedures under the current two-track enforcement practice; it further enriches the implementation of handling patent infringement cases through administrative adjudication procedures. During the handling of these two cases, discussions took place and opinions as to the decisive factors  were formed on various procedural issues, such as the justified filing of requests for administrative adjudication, the procedure of hearings, and conditions for suspension of procedure , and the relationship between the administrative adjudication procedures  and the concerned patent invalidation cases,  as well as the execution and publication of decisions, judicial appeal proceedings, etc. In addition, the questions regarding justified filing of requests for administrative adjudication against important patent infringement cases, offering for sale by displaying drugs on online purchasing platforms, exceptions to patent infringement, etc., were also addressed in the handling procedure. From the viewpoint of the decisions, issuing orders requesting the infringers to immediately stop all infringing acts, which are subject to execution throughout the entire country, has clearly enhanced the enforcement effect through administrative adjudication procedures. This can provide stronger protection to patent owners with respect to protecting their legitimate rights and stopping infringing acts.

 

Take【2021】Guo Zhi Bao Cai Zi No. 1 as an example. Some important issues were discussed, such as the following:

 

According to Article 4 of the Regulations Governing Administration Adjudication of Important Patent Infringement Disputes, if one of the parties to the infringement dispute has already filed a suit with the court, a request for administrative adjudication for the same dispute shall not be considered a justified case eligible for administrative adjudication. In 【2021】Guo Zhi Bao Cai Zi No. 1, the opposite party claimed that:  “the patent in dispute (ZL201510299950.3) is a divisional patent case originated from another  patentZL03819760.X.” and “the patentee already filed a suit with Shanghai IP Court based on ZL03819760.X patent”; the opposite party argued that the request for administrative adjudication filed with the CNIPA should not be accepted. In response, the CNIPA tribunal stated that the patent involved in the suit filed with the Shanghai IP Court is ZL03819760.X patent and the patent involved in the request for administrative adjudication is ZL201510299950.3 patent. Although these two patents have parent/division relationship, the subject matter(s) disclosed in each patent is/are different from each other. The two infringement cases involve different evidence, fact and reasons, and they are not the same patent dispute. The patentee never filed a suit with the court for infringement of ZL201510299950.3 patent; the patentee’s filing of a request for administrative adjudication is proper and justified, which meets the requirement of “No court has accepted a suit against the same infringement dispute”. The tribunal also pointed out that the products infringing on ZL201510299950.3 patent have already been sold in Shanghai, Guangdong, Jiangxi etc., and  the said products have been published, announced and offered for online sale in 24 provinces (regions and cities), which means that the dispute is a cross-province important patent infringement dispute. The dispute qualifies as an important patent infringement case as prescribed in the Regulations Governing Patent Administration Adjudication and the Regulations Governing Administration Adjudication of Important Patent Infringement Disputes.

 

2.      Determination of “Suspension of Administrative Adjudication Procedure”

 

According to Article 17 of the Regulations Governing Administration Adjudication of Important Patent Infringement Disputes, under any of the following situations, a party may request suspension of the case handling and the CNIPA may also decide to suspend the case handling at its discretion (Article 17):

(1)    where the opposite party files a patent invalidation petition which has been duly accepted by the CNIPA;

(2)    where one of the parties passes away and it is during the waiting period to determine whether the successor of the deceased party will participate in the request for an administrative adjudication procedure;

(3)    where a party losses capacity for civil conduct and its legal representative has not been confirmed;

(4)    where a party is a judicial person or an organization, which no longer exists, and the party taking over the rights and interests of the said party has not been confirmed;

(5)    where a party cannot participate in the administrative adjudication procedure for reason(s) not attributable to it;

(6)    where the handling of the case under administrative adjudication procedure must be based on the result of another case which has not been decided; and 

(7)    where there exists any other situation for which the suspension is needed. 

In 【2021】Guo Zhi Bao Cai Zi No. 1 case, an interested party named Yichang East Sunshine Changjiang Pharmaceutical Co., Ltd.（the opposite party in Guo Zhi Bao Cai Zi No. 2 case）filed an invalidation action against ZL201510299950.3 patent (the patent involved in Guo Zhi Bao Cai Zi No. 1 case) on 19 November 2021, and the CNIPA tribunal thus suspended the administrative adjudication against the infringement of ZL201510299950.3 patent (Guo Zhi Bao Cai Zi No. 1 case). However, after the oral hearing was held for the invalidation action against ZL201510299950.3 patent, Yichang East Sunshine Changjiang Pharmaceutical Co., Ltd., on 20 April 2022, withdrew its petition for invalidation and the invalidation action thus became closed and the CNIPA tribunal also resumed the handling of the Guo Zhi Bao Cai Zi No. 1 administrative adjudication case. Yichang East Sunshine Changjiang Pharmaceutical Co., Ltd. later filed the 2^nd invalidation action against ZL201510299950.3 patent and it, on 13 April 2022, again requested the tribunal to suspend Guo Zhi Bao Cai Zi No. 1 case. The CNIPA ruled that the request for suspension is not allowed for the following reasons:

 

(1)    “The patent in dispute is an invention patent which was granted through substantive examination. According to Article 7 of the Several Provisions of the Supreme People’s Court on Issues Concerning Application of Laws in the Trial of Cases Involving  Patent Disputes,for a patent infringement suit of an invention patent right accepted by the people’s court, the court may decide not to suspend the court proceeding”. 

 

(2)   

“In this case, the same invalidation petitioner has already filed the 1^st invalidation action, and the concerned invention patent is still valid through the 1^st invalidation action. Considering the fairness and efficiency of handling the administrative adjudication against patent infringement, it is inappropriate to again suspend this case (i.e., the Guo Zhi Bao Cai Zi No. 1 case).”

 

According to statistics released by the CNIPA (as stated in CNIPA's 2021 Annual Report), in 2021 around 1,586,000 invention patent applications were filed, which represents a 5.9% rate of increase as compared with 2020. Along all the invention patent applications filed in 2021, there were around 1,420,800 invention patent applications filed by patent applicants from China (which stands for 90% of all the invention patent applications filed in the same year) with a rate of increase of 6/2%. There were around 158,000 invention patent applications filed by foreign applicants in 2021 (which stands for 10% of all the 2021 filed invention applications) with a rate of increase of 3.6% as compared with 2020. Also, there were 2,852,000 utility model patent applications and around 806, 000 design patent applications filed in 2021. As well, in the same year, around 730,000 PCT international patent applications were submitted to CNIPA as the Receiving Office, which represents a 1.5% rate of increase as compared with 2020. Among all these the 2021-filed PCT international applications, around 68,000 applications were filed by Chinese patent applicants, which represents a 2.1% rate of increase as compared with 2020. Also, according to the official statistics, there were around 110,000 Chinese patents which were granted to foreign patent owners, with a 23% rate of increase as compared with 2020. Among all these granted patents, those granted to US patent holders are with a rate of increase of 32.1% as compared with 2020. According to WIPO's statistics, there were around 69,500 PCT international patent applications filed in 2021 by applicants from China (with a 0.9% rate of increase as compared with 2020) and China continue to be the top one country for PCT international filing which is ahead of USA, Japan, Korea and Germany. 

According to the "Supreme People's Court (IP Court)/Tribunal Annual Report (2021" released by the China Supreme People's Court, China courts received 4335 new cases involving technical-related IP and antitrust issues (hereinafter referred to as "Technical Cases") in 2021, which represents an increase of 1158 cases and a 36.4% rate of increase as compared with the number of cases for 2021 (3177cases). In 2021, the courts received 437 technical-related cases with foreign parties or parties from Hong Kong, Macao and Taiwan involved (hereinafter jointly referred to as "general foreign-related cases"), which represents around 10.1% of all newly filed cases and represents a 16.2% rate of increase as compared with the "general foreign-related cases" filed in 2020. Among all the "foreign-related cases" mentioned above for 2021, there are 382 cases with foreign parties involved, which represents 8.8% rate of increase of all the cases newly filed in 2021. There were 55 cases which involved parties from Hong Kong, Macao and/or Taiwan, which represents a 1.3% of all the 2021 newly filed cases.

 

As stated in the above-mentioned Annual Report, there is a significant increase in the number of cases involving utility model patents, and more than 1/4 of the cases relate to emerging sectors of strategic importance in the fields of biotech and pharmaceuticals, high end manufacturing equipment, energy saving and environmental protection, new materials, new energy etc., and such cases have also increased very quickly. In addition, as stated in the same Annual Report, the international characteristics of the 2021 court cases were significant, and the number of foreign-related cases received by courts increased rapidly.    

 

In the "China Court IP Judicial Protection Report (2021)" also released by the Supreme People's Court, it is stated that the people's courts (the first instance courts) received 31618 patent cases newly filed in 2021, which represents a 10.98% rate of increase as compared with the patent cases filed in 2020. As stated in the above-mentioned Report, the cases filed in 2021 show that Internet-related cases continuously increased, utility model-related cases increased significantly, etc.   

 

According to the statistics released by the China National Intellectual Property Administration (CNIPA), there were around 49,800 patent infringement cases filed through administration adjudication procedure in 2021, which represents a 17.4% rate of increase as compared with the cases filed in 2020. There were around 49,500 patent infringement cases filed through administration adjudication procedure, which were decided in 2021 with a 21.5% rate of increase as compared with the cases decided in 2020. 

 

Upon observation of the above-mentioned case statistics and other reported updates regarding the trend of patent filing and acquisition landscaping activities (both local and global) as well as enforcement of patent right in China, China certainly has become an important place for industries to build their patent portfolio from a global viewpoint due to the size of market in China and China's industries' efforts in getting into international market with no reservation. Generally speaking, the fast increase of patent infringement disputes has spoken the importance of acquiring patent rights in China. To ensure that patent owners may exercise their patent rights in China fairly, effective ways of enforcing patent rights in China has gained high concern and attention from local industries and industries from foreign countries. When there exists any existing or anticipated patent infringement dispute, patent owners'' better understanding about the patent enforcement actions as well as the considerations behind the strategy and actions as needed becomes critical and important. In addition to the increasing patent enforcement cases involving local parties, patent enforcement cases involving foreign parties and parties from Hong Kong, Macao and/or Taiwan are also growing significantly as compared with past growth. As well, a substantial number of cases involve complicated high-level technologies. With all this in mind, industries should pay attention to and gain a better understanding of how to both offensively and defensively enforce patent rights in China in respect of the strategies and actions available under Chinese laws.

 

According to Article 65 of the Patent Law, for each of the above-mentioned two administrative adjudication cases, if any party is not satisfied with the CNIPA's decision, it may file an administrative suit with the Beijing IP Court to contest the decision. It is unclear whether the concerned parties will pursue with the administrative suit proceedings and how they will pursue with said proceedings. Having said that, the new mechanism for handling important patent infringement disputes by the CNIPA and the two decisions issued therefor may bring some new ideas to patent owners. 

 

China continues to emphasize the reasonable protection under the patent system and the incentives to develop new technologies. Through the 2021 amendment of the Patent Law, punitive damage compensation practice (with a maximum of 5 times of the proven damage amount) has, for the first time, been brought into the China patent system. The amendment of Patent Law has also led to strengthening of evidence collection and investigation into patent infringement so as to provide patentees with more reasonable protection. In the past, some patent owners were more conservative in choosing administrative adjudication procedures to resolve patent infringement disputes due to local protectionism concerns. The 2021 Patent Law amendment provided a new mechanism to handle important patent infringement cases via the CNIPA. This may provide patent owners with new ideas on how to better use this new mechanism to resolve infringement of their patents. In the above-mentioned two cases, the party requesting for administrative adjudication against patent infringement is a foreign company and the opposite parties (infringers) are Chinese companies. In addition, both cases involve an invention patent covering complicated pharmaceutical technologies. The patentee filed requests with the CNIPA against patent infringement and received favorable decisions. These two cases were filed on 5 November 2021 and concluded on 27 July 2022. After deducting the suspension time period, the CNIPA only spent around 4 months to review and conclude the cases. Such speed in handling these cases would not be possible if the disputes were resolved through judicial procedures. Patent owners may continue monitoring this new practice and its implementation efficiency and use the same as a reference when choosing how to enforce their China patents.