Draft Judicial Interpretation on Patent Linkage Released by SPC

On October 29, 2020, the Supreme People’s Court issued the its draft patent linkage Judicial Interpretation, the  “Provisions on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Drug Marketing Review and Approval of Patent” (Draft for Solicitation of Comments)” 《关于审理涉药品上市审评审批专利民事案件适用法律若干问题的规定》(征求意见稿)(the “JI“).  The deadline for submission of comments on the JI is Dec. 14.

 Among the highlights of the JI are:

  1. The Beijing IP Court will have jurisdiction over patent linkage cases.  Jurisdiction will attach even if administrative proceedings have commenced
  2. The Court may consolidate lawsuits involving the same patent or generic drug in most cases.
  3. Applicants are required to submit to the Court the relevant technical materials related to the disputed patents that were submitted to NMPA for marketing approval. 
  4. Patentees or interested parties may apply for preliminary injunctions upon payment of a bond. 
  5. Each party is under a duty of confidentiality with respect to trade secrets in the disputes.
  6. Generic companies s can claim damages suffered by delays in market launch due to the abuse of litigation rights by patentees and interested parties, if the patent linkage case is withdrawn without justification and the claims were not supported by the Court (Art. 17). This is similar to Canada’s patent linkage regulations, which permits claiming of damages (but not profits) by reason of abusive litigation.  

The JI might help define the scope of a possible jurisdictional battle between the courts and administrative agencies in adjudicating patent linkage cases.  This was briefly discussed in my blog of October 28, 2020: “The Cart Before the Horse in China’s Patent Linkage Regime.” This jurisdictional issue raises the interesting possibility of a domestic Anti-Suit Injunction (“ASI”) under Article 100 of the Civil Procedure Law to stay administrative proceedings. China has recently been aggressively exploring use of ASI’s to address jurisdictional conflicts in standards essential patent cases.  ASI’s were also used in the United Kingdom to address domestic conflicts between the jurisdiction of courts of law and equity and have also been used to address conflicts between arbitration and judicial proceedings. ASI’s could be necessary to prevent misuse or arbitrage between administrative and civil patent linkage proceedings.

Update of October 29-30, 2020: IPO has submitted comments on the draft NMPA/CNIPA rules on linkage.  The comments are here, and my blog about those rules is here.

Update of November 20, 2020: USPTO has made available its translation of the JI here.

China’s Rising Presence in the IPO Top 300

Intellectual Property Owners (IPO) recently released its top 300 organizations granted US patents in 2014.  Many Chinese companies made the top 300.  TSMC was the top amongst Mainland or Taiwan companies, ranking number 26, with 1,446 US patents. Huawei was 48 with 872 patents; ZTE was 63 at 705.  ZTE also showed a 58.2 increase over last year.  Hon Hai (Foxconn) was number 68 with a drop of 33.8 percent in patent filings to 665, and a drop in rank from number 35 in 2013.   Hong Fu Jin was number 85 ( a decrease of 47.9 percent), and Shenzhen China Star Optoelectronics showed the highest increase of any Chinese organization amongst the top 300, with a total of 431 filings.  This 318.4%  increased earned it the number 93 spot.

Patent grants increased for both Chinese and Taiwanese cell phone companies.  Amongst Taiwanese cell phone companies, HTC also made the top 300.  It received 210 patent grants, with an increase of 44.3% earning it the 157th place.

Tsinghua University retained its rank as the top Chinese university patent filer, ranking number 153 with 230 patents in 2014.  Amongst well-known universities, Tsinghua retained the enviable position of being behind the University of California system (number 91) and MIT (number 135) and ahead of Stanford (181), and Caltech (196).

Chinese “Top 300” changing ranks may be contrasted with overall patent grant trends at USPTO.  Patent grants from all countries, increased at USPTO last year, from 301,962 in 2013 to 326,039.  This was an increase of  about 8 percent.  Chinese patent grants increased from 6597 to 7921, an increase of  about 20 percent.

China is receiving more patents in both relative and absolute terms.   There were however many outliers in China’s overall growth.  While many Chinese organizations received patents in numbers that were well in excess of the overall growth rate at USPTO, as noted above several organizations experienced negative growth (Foxconn, Hong Fu Jin).

Of course, increases in patent grants do not necessarily translate into patent quality or commercial value.   Other patent data, including data on allowance rates, pendency rates and technology rate can help in further understanding overall patent data.  Data on licensing flows can also assist in understanding China’s role as technology importer and an emerging technology exporter.