One of the main concerns many foreign investors have when approaching the Chinese trade fair circuit is how to protect their intellectual property while at a fair. Here we examine what can be done to protect your interests.
One of the ways to defend one's intellectual property rights (IPRs) might be to request invalidation of another's rights that are considered an infringement to the rights of the original right-holder. Note that some companies or persons screen whether IPRs for products have been registered in China, and if not, apply for registration of a utility model or design patent of that right. The examination for these kinds of patents is rather superficial, so the rights are often granted. This may result in a legal battle whose right is "stronger" and will be often carried out by the attempt of the original right-holder to invalidate the rights of the utility model or design patent.
The written request for invalidation shall, in combination of all the submitted supporting documents, specifically state the reasons for the request for invalidation and designate the evidence on which each reason is based. Against the decision of Patent Reexamination Board (PRB) declaring the patent right invalid or upholding the patent right, the patentee or the person who has filed the invalidation can, within three months from the notification of the decision, institute legal proceedings in the people's court (the First Chamber of the Intermediate Court in Beijing as in the reexamination).
Any request for invalidation of the patent right on which the examination decision has been made in another invalidation cases shall not be accepted and handled if it is made on the same grounds and evidence. The requester may give up all or part of the grounds and evidence for invalidation. The PRB will not check or examine the grounds and evidence the requester has given up.
Any patent right, which has been declared invalid, shall be deemed to be non-existent from the beginning.
In China, as in Europe, the civil judge in the main infringement proceedings cannot decide on the validity of the allegedly infringed patent. Therefore, it is very common that two proceedings, one for the infringement of a patent and one for the invalidation of the same infringed patent, are filed almost at the same time. In fact, the vast majority of invalidation procedures are initiated within the frame of a patent invalidation lawsuit. The defendant accused of patent infringement will resort to the invalidation as a very effective form of defense in the main lawsuit. The main purpose would be that of obtaining a declaration of invalidation that could wipe away the infringement proceeding. In this regard, special provisions of the Supreme People's Court on Patent Dispute of 2001 allow the defendant in a patent infringement lawsuit to apply with the court for the suspension of the infringement proceeding during the invalidation procedure. In practice, the courts grant almost all such requests. No judge likes the idea of trying a case to its very end only to discover later that the patent declared as infringed has also been declared invalid by the PRB. Therefore, the filing of invalidation often serves a secondary purpose.
The costs for enforcement can vary greatly and are usually much higher when pursuing legal action through the courts compared with administrative action. An administrative action for a simple case would cause expenditures between $8,000 and $30,000, whereas the costs for a lawsuit in Chinese courts will be rather similar to those for a lawsuit in Europe or the United States.
The procedure costs and fees are proportional to the value of the case. Important patent infringements can amount to over $50,000 in court fees. Administration fees are much lower, from a few hundred dollars to upward of $3,000 for complex procedures involving a number of administrations.
International and Chinese attorneys bill by the hour, and rates vary from province to province and from case to case. Chinese attorneys handling foreign clients' enforcement cases charge fees, which are equal if not even more expensive than those of Western attorneys. Often such fees can only be partly recovered in cases of successful enforcement. In fact, the court will award what is "reasonable" and not what was effectively paid.
In China, there is no rule that the loser must pay all legal costs of the procedure and those of the winner in a civil lawsuit. Therefore, full compensation of legal costs is not to be expected. Legal costs are forfeited as well as the costs of the preliminary phase related to the collection of evidence. Only in particular cases will purchase traps, notary and expert costs be awarded in a reasonable proportion.