On June 7, State Intellectual Property Office (SIPO) IP Research Center published their research result named 2015 China IP Development Status Report. The report have made a thorough review and analysis on the IP development status across all provinces of China in 2015 and during 2010 - 2015 respectively, surrounding the topics of innovation, utilization, protection and environment of IP.

Meanwhile, comparisons have been given on three dimensions, namely, IP ability, performance and environment, among the top 40 countries with largest technology resource inputs and IP outputs. According to the finding, China IP development is improving steadily with increased ranking among the international counterparts.

The status index sets year 2010 as the basis, and a basic score of 100 for all development indexes including overall, innovation, development, protection and environment, so as to calculate the index scores for China from 2010 to 2015. According to the calculation, China’s IP overall development index moved up steadily and reached 187.35 in 2015. Among this, IP innovation development index is 164.83, utilization development index 174.48, protection development index 211.75 and environment development index 198.34. These growths reflect the development achieved by China after the deployment of the IP strategies devised by the State since 2008.

Internationally, according to the report, China’s ranking is moving upwards gradually each year and among the 40 sample countries, China rose from No. 19 to No. 8 at a considerable rate. In 2014, China’s IP overall development international index is 55.38, up by 1.19; however, it is still at a great distance from US and Japan; while China’s IP capacity index is 64.94, ranked No.3 and the distance from Japan, which is the runner-up, is getting smaller; performance index 50.20, increased by 3.96 from the previous year and ranked No. 3; however the environment index 42.32, increased by 0.49 from the previous year remained at the ranking of No. 30; indicating an uneven rankings distribution. Establishing the IP environment is a long-term and challenging task。 According to the report, the market environment index and cultural environment index had increased by 0.57 and 1.73 respectively sat the rates of 1.76% and 6.54% only, which can only match the average increase rates of all the sample countries. In other words, the improvement in both market and cultural environments is not quite obvious. As shown in the report, China is in lack of input for building IP market and cultural environments and the structure of the environments shall be adjusted so as to improve them. (Source: China Economy Net)

Recently State Intellectual Property Office (SIPO) has announced a notice regarding the new measures to strengthen handling of patent ownership disputes. According to the notice, as a general rule, patent administrative offices shall limit the mediation period for settling patent ownership dispute cases within 2 months. For cases being too complicated to be settled within this time frame, extension shall be approved by the by the chief of the patent administrative offices, which, however, shall not exceed more than 1 month.

As stressed in the notice, for those cases suspended for examination at SIPO due to the ownership dispute, SIPO shall notify the concerned parties of the suspension and inform the same to the patent administrative office in charge of settling the ownership dispute. The patent administrative office shall, in return, send the enforcement document to SIPO within 5 days after concluding the case so as to terminate the suspension in time.

In order to increase the transparency of legal enforcement and case handling, as well as to facilitate case update, the patent administrative offices responsible for the patent ownership dispute mediation shall publish related information within 20 workdays upon concluding of the case. The disclosed information shall be limited to case matter, case number, case filing date, names of both parties, case result (mediation agreement achieved or case dismissed) as well as closing date, while the mediation content and materials shall be kept confidential. The patent administrative offices shall publish the information on their official websites, bulletins, and periodicals easily accessible to the public.

China GMO new specie patent volume ranked No. 2 globally and broke the long term dominance by advanced countries and multinational seeds groups. GMO new species breeding was part of China’s 12th 5 year-plan (2011 – 2015), during which China had achieved 137 key genes with significant value for breeding acquired, plants of new transgenic pest-resistant cotton accumulated to 400 million mu (around 66 million acres), reduction of pesticide in use reached 400,000 tons and the increased revenue from reduced expenditure arrived at 45 billion yuan. China has established a comprehensive GMO breeding technology system and biology safety evaluation technology system, which will help improve the country’s ability to research and develop own genes, technologies and species, as well as provide solid technical background to ensure the safety of food supply.

In addition, some key technology innovation indexes of China have leaped into the front ranks of the world. In 2015 the rate of contribution of technology development to the economic development hit 55.3% with an overall R&D expenditure more than 1400 billion yuan doubling that in 2010; and the amounts of invention filing and authorization are 3.3 times of those in 2010.

The tests of Patent Prosecution Highways (PPH) between China State Intellectual Property Office (SIPO) and The Swedish Patent & Registration Office, SIPO and Icelandic Patent Office, SIPO and UK Intellectual Property Office, which are initialized as on a two years’ term, had come to the end on June 30, 2016.

In order to continue the fast and efficient PPH services to the applicants, SIPO has made agreements with the above-mentioned offices respectively on extending the PPH tests. The details of agreements are as follows:

China – UK PPH test will be extended indefinitely effective from July 1, 2016 with all requirements and procedures remain unchanged;

China – Sweden PPH test will be extended indefinitely effective from July 1, 2016 with all requirements and procedures remain unchanged;

China – Iceland PPH test will be extended for another 3 years effective from July 1, 2016 with all requirements and procedures remain unchanged;

For details of requirements and procedures of the above PPHs, please visit:

http：//www.sipo.gov.cn/ztzl/ywzt/pph/zn/

(Source: SIPO)

At local time on June 22, under the witness of Chinese President Xi Jinping and President of Uzbekistan Islam Abduganiyevich Karimov, the Intellectual Property Protection Cooperation Agreement between the government of the People’s Republic of China and the Republic of Uzbekistan was signed in Tashkent, Uzbekistan. State Intellectual Property Office of China(SIPO) Commissioner Shen Changyu and Uzbekistan Foreign Affairs Minister Kamilov signed the agreement as representatives of both governments. This marked the cooperation relations between the two governments was formally established.

The agreement noted that, the two governments recognize that an effective protection of intellectual property is important to the development of bilateral mutually beneficial cooperation in economy, education, science and technology and cultural fields. In order to create favorable conditions for such cooperation, both governments decided to develop the intellectual property protection cooperation under the principle of equality and mutual benefit. The agreement confirmed that, two governments would provide mutual effective intellectual property protection in accordance with their national laws and international treaties of joint participation, and the cooperation will be conducted in the following fields: coordination of issues related to protection and use of intellectual property; improvement and the exchange on legal information of intellectual property protection and information of relevant development strategies; exchange of experiences of taking measures in the protection of intellectual property; exchange in the field of intellectual property training materials, training methodologies and focus topic materials; carry out personnel training in the field of intellectual property and exchange relevant work experiences; exchange of experiences in international cooperation and information and implementation of relevant multilateral international treaties on protecting intellectual property of their respective participation; jointly organize seminars and other meetings on issues related to the protection of intellectual property and organize exhibitions; cooperation in other fields and so on.

In the afternoon on June 22, during the talk between Shen Changyu, SIPO Commissioner, and Maksoud, the Uzbekistan Intellectual Property Bureau Acting Director, both sides agreed that the signing of cooperation agreements between the two governments mean significant to intellectual property protection of both countries. Both sides will strengthen cooperation, earnestly implement the important consensus reached by leaders of the two countries and the content of cooperation agreement between the two governments to protect intellectual property, to push forward deep Sino-Ukrainian cooperation in the field of intellectual property protection, to provide strong support for the development of bilateral relations.

Recently, a ruling of civil judgment has put a case lasting for 15 years to n end. The client represented by Unitalen has won the ultimate victory of the case, which meanwhile has historical significance as it is the first case in which the protest made by the Supreme People’s Procuratorate was rejected by the Supreme People’s Court.

Mr. Zhigang Hao is the inventor and Chinese invention patent holder of “roller-type mill”. The patent is granted exclusively to Shenxiang company (Shenxiang) for use. When finding Hunan Guangyi Technology Co. Ltd. (Guangyi) infringed on the above-mentioned patent, Shenxiang started a lawsuit at Hunan Changsha Intermediate Court on May 10, 2001 demanding cease of the infringement and compensation for its economic losses. Due to the patent invalidation procedures and the first instance and second instance of the administrative litigations undergone during the period, it took more than 3 years for Changsha Intermediate Court to issue the civil judgment on December 15, 2004 confirming the defendant’s infringement, which was further sustained by Hunan Higher Court.

Guangyi refused to accept the second instance judgment and requested retrial by Hunan Higher People’s Court, during which the second-instance judgment was revoked and the defendant’s products were considered as not infringing.

Under such unfavorable circumstances, Shenxiang entrusted Unitalen to claim a retrial by the Supreme People’s Court. Appointed by the Supreme Court, Hubei Higher People’s Court retried the case and revoked the retrial judgment made by Hunan Higher People’s Court. The defendant’s infringement was held as constituted.

Even after the retrial judgment rendered by Hubei Higher People’s Court took effect, Guangyi was still unsatisfied and petitioned for protest to be made by the Supreme People’s Procuratorate through Hubei Higher People’s Procuratorate. On February 26, 2013 the Supreme People’s Procuratorate brought a protest before the Supreme People’s Court. On September 12, 2013 the Supreme People’s Court held a hearing for this case and the Supreme People’s Procuratorate had a procurator to attend the court to show its support to the protest.

During the hearing, the court focused on the following issues: 1. The application of doctrine of estoppels; 2. The determination of functional limit; 3. The determination of identical features (all of these focuses are of typical significance, however this article won’t conduct further analysis due to the technical complexity). Although the case has undergone a long period of time and both the technical and legal issues involved are extremely complex, the Supreme People’s Court managed to go through each focus points thoroughly along with the professional examination conducted by the members of the collegiate panel.

The conclusive judgment was made after 3 years of examination and discussion by the juridical committee since the case was accepted by the Supreme Court in 2013, maintaining the civil judgment rendered by Hubei Higher People’s Court and Shenxiang ultimately won over.

Lasting over 15 years from the first start of litigation to the final ruling rendered by the Supreme Court, this case had experienced almost all the available procedures for a IP lawsuit, and therefore it is of typical significance. In particular, it is rare for the Supreme People’s Procuratorate to make protest on patent cases. According to the information open to the public so far, the Supreme People’s Procuratorate had only filed one protest to Beijing Higher People’s Court in 2007 concerning a patent administrative judgment, but not yet any precedential case of protest made to the Supreme People’s Court concerning patent infringement civil case.

Warner Lambert Company (Lambert) applied for an invention patent named “Crystal [R-(R*, R*)]-2-(4-fluoro-phenyl)- β, δ-dyhydroxy-5-(1-methyl ethyl)-3-phenyl-4-[(phenylamino group) carbonyl]-1H-pyrrole-1-enanthylic semi-calcium salt” on July 8, 1996, which was granted patent right on July 10, 2002 with patent number 96195564.3.

The subject matter in Claim 1 of the patent at issue is I-type crystalline Atorvastatin hydrate, which characteristic part is confined to XPRD. Beijing Jialin Pharmaceutical Co. Ltd. (Jialin) and Chu Zhang applied for invalidation of the patent at issue, and after reviews the Patent Reexamination Board made a decision numbered 13582 (No. 13582 decision) on June 17, 2009 to announce complete invalidation of the patent at issue for not complying with the stipulation given in Clause 3, Article 26 of the Patent Law. Specifically: 1) The specifications do not provide any qualitative or quantitative data to prove that the I-type crystalline Atorvastatin hydrate generated does contain 1-8 mole of water (optimized 3 mole); moreover, it is impossible to deduce the moisture content of the product is 1-8 mole (or 3 mole) based on the preparation procedures and the XPRD data and spectrogram used to illustrate the crystal form of the product. Therefore, the technical personnel in the field are unable to ascertain the product to be protected in the claims based on the disclosed contents of the specifications. 2) The technical personnel in the field are unable to ensure how to prepare the I-type crystalline Atorvastatin hydrate that contains 1-8 mole of water (optimized 3 mole), which is protected by the patent involved, by referring to the contents of the patent specifications. Lambert was unsatisfied with the decision and then brought an administrative lawsuit.

Beijing No.1 Intermediate People’s Court sustained No. 13582 Decision. During appeal requested by Lambert, Beijing Higher People’s Court considered that the invention is intended to resolve the technical problems of obtaining the crystal form of Atorvastatin, namely I-type crystalline Atorvastatin, to overcome the technical problem that “amorphism Atorvastatin is not suitable for filtering and drying in mass production”. As the Patent Reexamination Board neither determined the technical problem to resolve in this invention, nor the parameters as “the chemical and physical performance parameters related to the technical problem to resolve”, it is apparently inappropriate to determine the patent at issue does not comply with Clause 3, Article 26 of the Patent Law due to the lack of overall consideration of the technical problems to resolve in this invention. Accordingly, Beijing Higher’s People’s Court revoked the first instance judgment and No. 13582 Decision, and demanded the Patent Reexamination Board to remake their decision. The Patent Review Examination Board and Jialin petitioned for retrial to the Supreme People’s Court. The Supreme People’s Court ruled to deliver the case and later on April 16, 2015 rendered final judgment to revoke the second instance judgment and to sustain the first instance judgment.

Comment:

This case involves judgment on the sufficient disclosure of chemical product invention specifications. It is not only typical in legal application, but also involves complicated technical issues. The proceeding has drawn both domestic and international concern due to the huge economic value pertained to the patent at issue. In the Supreme People’s Court’s opinion, it shall be specified in the patent specifications for chemical product invention the determination, preparation and usage of the chemical products - specifically speaking, when the invention is a chemical compound, the specifications shall specify the chemical structure of the compound and the chemical and physical performance parameters related to the technical problems to resolve in the invention, so that the technical personnel in the field can confirm the compound. The specifications shall also disclose at least one method of preparation for the technical personnel in the field to implement. The patent specifications involved in the case do not comply with Clause 3, Article 26 of the Patent Law from the perspectives of determination of chemical products and preparation. This case also has clarified legal issues of 1) the relationship between determination of the technical problem to resolve in an invention and of whether the specifications is disclosed sufficiently and 2) whether the experimental evidences supplemented after the filing date can be adopted to prove that the specifications is fully disclosed. This case is of significant importance toward stipulating legal standards and guiding the writing of specifications.

Picasso International Enterprise Co. Ltd. (Picasso) is the right holder of the “Picasso” device trademark. Picasso granted an exclusive license to use the trademark on writing instruments in mainland China to Shanghai Pafuluo Stationery Co. Ltd. (Pafuluo) on September 8, 2008 for a duration from September 10, 2008 to December 31, 2013. The trademark license contract was recorded by Trademark Office on March 12, 2009. On February 11, 2010 Picasso and Pafuluo agreed to extend the license for another 10 years following the original contracted term. Then Picasso signed another trademark license contract with Shanghai Art Imagine Stationery Co. Ltd. (Art Imagine), granting Art Imagine the right to use the trademark exclusively from January 15, 2012 to August 31, 2017.

Believing the acts of Picasso and Art Imagine as “malicious collusion conducted to damage the legal interests of a third party”and “violating the compulsory provisions of laws and administrative regulations”as stipulated in the Contract Law, Pafuluo brought a lawsuit to the court, requesting the court to announce invalidation of the trademark licensing contract signed by Picasso and Art Imagine, and to have the two parties pay a total of 1 million RMB Yuan for its economic losses. According Shanghai No.1 Intermediate People’s Court, the trademark license contract at issue represents the true wills of the two parties for the purpose of acquiring exclusive right to use the trademark involved, and malicious intent to harm the legal interests of Pafuluo cannot be determined; Clause 1, Article 3 of the Judicial Interpretation of the Trademark Law aims at defining the types of trademark license but is not a compulsory provision of laws or regulations, therefore, the conclusion of the contract at issue does not violate the compulsory provision of laws and administrative regulations. Accordingly, the court dismissed all the claims raised by Pafuluo.

Both Pafuluo and Art Imagine were not satisfied with the court’s decision and thus petitioned for appeal. After trial, Shanghai Higher People’s Court believed that, at the time when Picasso and Art Imagine signed the trademark license contract at issue, both parties were aware of the pre-existing exclusive license between Pafuluo and Picasso; so Art Imagine cannot be considered a bona fide third party in the subsequent license. However, there is no sufficient evidence to prove Art Imagine has malicious intent to do harm to Pafuluo, neither is there evidence to prove collusion between Picasso and Art Imagine. Therefore, it cannot be determined that such contract is the conduct of malicious collusion to harm the interests of a third party, and does not meet the criteria to announce invalidation of the contract. The contract disputes among the parties involved shall be resolved through claiming liability for breach of contract.

Comment:

It is clearly stated in the second instance judgment that the constitution of “malicious collusion conducted to harm the interests of a third party” as prescribed in the Contract Law requires not only the proof of defendant’s subjective intent to do the harm, but also the objective manifestations of collusion. In this case, the latter trademark exclusive license contract is not considered as invalid simply because it was signed subsequently. However, the pre-existing trademark exclusive license right can be held against the latter license contract signed by a non bona fide third party. The second instance’s ruling is of guiding significance in regards to clarify the market rules concerning trademark license transactions. Meanwhile the result of this case has laid the groundwork for the following trials of dozens of related cases around the country, and provided great value of references to the handling of similar cases.

Intellectual Assets Management (IAM), a recognized UK magazine, recently elected “2016 IAM Global Patent 1000 Practitioners”. Unitalen is chosen to be among the recommended firms for its overall advantages in patent filing, patent litigation and patent transactions fields. In addition, Mr. Deshan Li, Vice Director of Unitalen, is listed as a recommended individual for patent filing.

According to IAM, Unitalen has over 600 professionals including patent agents and attorneys with branches scattered in almost all major cities of China. Over years of development Unitalen has emerged as a top choice for multinational companies, which would look for comprehensive one-stop IP services. The company is well-known for their quick response in solving clients’ problems, they are highly praised by the clients for their “hands-on” mode of service and “innovative and flexible style of handling issues” in spite of their large scale. Some clients also express their great appreciation to Unitalen’s quick response capability, sense of business in handling issues as well as the professionalism demonstrated both in litigation and non-litigation areas. The Vice Director, Mr. Deshan Li, who is also a Ph.D. in physics, is exceptionally deft at electrical engineering and able to manage huge international patent portfolio in an agile manner.

“IAM Global Patent 1000” serves exclusively to name the best-in-class patent firms and individuals on a global basis. The making of this list underwent a study conducted by the research team for 5 months on thousands of attorneys at law, patent attorneys and in-house counsels in over 40 countries. The list serves as an authoritative reference for global patent Practioners.

On June 2, the Sino-Europe Internet Intellectual Property Protection (E-Commerce) Seminar, which is co-hosted by China Ministry of Commerce and EU Delegation to China, was held in Beijing New World Hotel. Experts from both China and Europe made their keynote speeches, followed by an in-depth roundtable discussion on Sino-EU Internet IP protection.

Mr. Yongbo Li, senior partner of Unitalen Attorney at Laws and vice-president of INTA Anti Unfair Competition Committee, was invited to give a speech on “Internet platforms’obligation of scrutiny against IP infringement”. He introduced the trend of E-Commerce, and explained the stipulations in the Tort Law and the Consumer Protection Law concerning the liabilities of internet platform on IP protection through case study and sharing of his own practice experience. To conclude, Mr. Yongbo Li addressed the fact that most courts in trials are paying more and more attention to examine whether internet platform operators have performed their due diligence, i.e. whether the internet sellers’identity document and business license have been recorded, and whether there is an authorization from the IP right owner.