On December 27, 2023, China’s National Intellectual Property Administration (CNIPA) released the Third Batch of Guiding Cases for Administrative Protection of Intellectual Property Rights . Under Article 70 of the Patent Law, “the patent administration department under the State Council may, at the request of the patentee or any interested party, deal with patent infringement disputes that have a major impact throughout the country,” thereby providing an alternative adjudication process to the court system.

A translation of the CNIPA notice follows:

Guiding Case 9:

Beijing Intellectual Property Office Handles Dispute over Invention Patent Infringement

Keywords:

Separate Request for Preliminary Ruling on Administrative Ruling

Key Points of Case

In the trial of a case involving administrative adjudication, after the patent administrative department of the State Council makes a decision on declaring the patent right involved in the case invalid, the patent administrative department may rule to reject the request for administrative adjudication. If a party institutes an administrative lawsuit against a decision declaring the patent right invalid, the patentee may file a new request for administrative adjudication after the people’s court makes a judgment to revoke the decision becomes effective.

Basic Facts

Shanghai Youhui Investment Consulting Co., Ltd. (hereinafter referred to as the “Petitioner”) was the patentee of an invention patent with the name of “system for repositioning teeth and its manufacturing method” (patent number: ZL201180028187.0). On November 1, 2022, the petitioner filed a request for an administrative adjudication on patent infringement with Beijing Intellectual Property Office, alleging that Beijing Ruicheng Hospital Management Co., Ltd., and Aiqi (Sichuan) Medical Equipment Co., Ltd. were suspected of infringing the aforesaid patent rights. Upon examination, Beijing Intellectual Property Office accepted the case on the same day.

On January 11, 2023, in response to the request of the respondent, Aiqi (Sichuan) Medical Equipment Co., Ltd., to declare the patent rights in question invalid, the CNIPA made a decision to declare all patent rights invalid. At this time, the case of administrative adjudication was still under trial.

On February 1, 2023, Beijing Intellectual Property Office made a ruling to reject the petitioner’s request for administrative adjudication under the circumstance that the patent right involved in this case had been declared invalid.

Reasoning

Under Article 47 Paragraph 1 of the Patent Law a patent right which has been declared invalid shall be deemed to be non-existent from the beginning. After the CNIPA made the decision declaring the patent right in question null and void, the Beijing Intellectual Property Office rendered a ruling rejecting the petitioner’s request for an administrative adjudication, pointing out that: where there is evidence to prove that the decision to examine the request for invalidation of the patent right in question has been revoked by the effective administrative judgment, the petitioner may file a new request for an administrative ruling; if the parties refuse to accept the ruling, they may file a lawsuit with the Beijing Intellectual Property Court within 15 days of receipt of the ruling.

Guiding Significance

In order to improve the efficiency of hearing administrative adjudication cases on patent infringement disputes, if the patent right involved in this case is declared invalid by the administrative department for patent under the State Council in the process of handling patent infringement disputes, the request for administrative adjudication may be rejected first. The Beijing Intellectual Property Office quickly concluded this case by the aforesaid method of “first ruling and refuting without prior request”, which not only protected the legitimate rights and interests of right holders, but also avoided the impact of the instability of patent rights on the relevant parties and the general public, and embodied the characteristics of efficiency and fairness in consideration of administrative protection.

Guiding Case 10:

Chongqing Yuzhong District Market Supervision Administration (Intellectual Property Office) investigates and handles cases of infringement of exclusive rights to registered trademarks such as “Dongzi”

Keywords:

Administrative Mediation in Administrative Penalty Shall Be Lenient in Accordance with Law

Key Points of Case

In the investigation and handling of a dispute over infringement upon the exclusive right to use a registered trademark, if it is determined that the infringement is tenable, the department responsible for trademark law enforcement may mediate the trademark infringement dispute and the amount of relevant compensation, and take the mediation agreement and the performance thereof as a consideration factor of “voluntarily eliminating or mitigating the harmful consequences of the illegal act” in item (1) of Article 32 of the Administrative Punishment Law, and impose a lighter or mitigated punishment according to law.

Basic Facts

Wang was the trademark registrant of the trademark “ ” (Registration Number: 3278749) and the trademark “Dongzi” (Registration Number: 18634764), and the exclusive right to use the registered trademarks involved in this case was lawful and valid at the time of filing a complaint.
Wang filed a complaint with the Market Supervision Bureau of Yuzhong District, Chongqing Municipality (hereinafter referred to as the “Intellectual Property Bureau”), alleging that Chongqing Dongwei Fresh Old Hotpot Co., Ltd. used the “ ” logo on the shop’s signboard, printed the words “Dongzi” on the menus and employees’ aprons, and was suspected of infringing on its registered trademark of “ ” and “Dongzi” on the services such as Class 43 “restaurants.” On August 11, 2022, Yuzhong District Bureau placed the case on file for investigation. In the process of investigation and handling, the right holder requested the Yuzhong District Bureau at the same time to mediate the trademark infringement dispute and the relevant dispute over the amount of compensation.

On September 6, 2022, Yuzhong District Bureau organized conciliation between both parties and, upon agreement between both parties, issued a settlement statement, and the Dongwei stopped using the trademark involved in the catering services and compensated the trademark registrant 10,000 RMB.

Penalty Decision

On October 21, 2022, Yuzhong District Bureau determined that: the use of another person’s registered trademark in services without permission by a party constituted infringement as prescribed in Item (1) of Article 57 of the Trademark Law, and the parties’ voluntary cessation of the use of the trademark involved in the case and voluntary performance of the obligations as set forth in the mediation agreement during the investigation and handling of the case complied with the circumstance of “voluntarily eliminating or mitigating the harmful consequences of the illegal act” as prescribed in Item (1) of Article 32 of the Administrative Punishment Law. When imposing an administrative punishment against a party’s trademark infringement act in accordance with the provisions of paragraph 2, Article 60 of the Trademark Law, Yuzhong District Bureau shall impose a lighter punishment, order the party to cease the infringement act, and impose a fine of 3,000 RMB on the party.

Guiding Significance

In this case, through the handling mode of “administrative penalty + administrative mediation,” while regulating the market order, the Bureau responded to the right holder’s request for obtaining legal civil damages in the administrative procedure, and avoided “substituting punishment for mediation” or “substituting mediation for punishment.” In such cases, the relevant parties in administrative mediation may take the initiative to cease the infringing act and compensate the right holders. The amount of compensation can be considered as factors in determining the administrative penalty and fine, and the aforesaid acts may be determined as consistent with the circumstances under which the parties take the initiative to eliminate or mitigate the harmful consequences of the illegal act as prescribed in the Administrative Penalty Law.

Guiding Case 11：

Tianjin Heping District Market Supervision and Administration Bureau (Intellectual Property Office) investigates the trademark infringement case of Tianjin Maigo Commercial Management Co., Ltd. at Mai Mai Plaza

Keywords:

Evidence of infringement by sellers implicates market owner

Key Points of Case

The sponsor of a market, as the manager of the market, shall take necessary measures to stop the sellers from selling infringing commodities. Where the market sponsor fails to take necessary measures after being notified many times, objectively fails to actively perform its management duties, subjectively has the intention to allow the sale of fake products, and in fact provides a place of business for the sale of infringing commodities, such failure shall constitute infringement as prescribed in Item 6, Article 57 of the Trademark Law.

Basic Facts

The Mai-Mai Leisure Plaza of Tianjin Municipality (hereinafter referred to as Mai-Mai Plaza) is a large-scale commercial complex engaging in sales of cosmetics, clothing, ornaments, catering and entertainment.

On July 16, 2020, the Market Supervision Administration of Heping District of Tianjin Municipality (the “Intellectual Property Office”) received a tip-off alleging that the merchants in the Plaza sold products infringing upon the exclusive right to use a registered trademark. The law enforcement officers shall investigate and punish the merchants involved in the cases, and require the Plaza to fulfill its legal responsibilities. From July 2020 to April 2021, the Bureau of Heping District issued 18 administrative penalties to 18 merchants in the Plaza, and also interviewed them. After being informed by law enforcement officers through two interviews, the Plaza, knowing that business operators in the market committed trademark infringement, still failed to take necessary measures to stop the trademark infringement.

On April 7, 2021, the Bureau of Heping District placed the case on file for investigation of the Plaza. Upon investigation, the Plaza had concluded a contract on the use of a sales area with the relevant merchants, and specified in the contract the liabilities for breach of the intellectual property right and other provisions. In the course of daily business operations, the Plaza failed to perform its duty of inspection and monitoring due to ineffective management, and failed to take necessary measures to stop merchants in the market from infringing upon the right to exclusive use of a registered trademark after being informed. On May 21, 2021, in accordance with the relevant provisions of item (6) of Article 57 of the Trademark Law, Article 75 of the Regulation on the Implementation of the Trademark Law, and the Standards for the Determination of Trademark Infringement, the Heping District Bureau determined that the acts of the parties constituted trademark infringement.

Penalty Decision

Heping District Bureau shall, in accordance with Paragraph 2, Article 60 of the Trademark Law, impose an administrative penalty of a fine of 40,000 RMB on the party concerned.

Guiding Significance

This case is a guiding case in which the market sponsor fails to stop a business operator in the market from committing trademark infringement, knowing or should have known that the business operator in the market is infringing upon the right to exclusive use of a registered trademark, due to its neglect of management duties. In this case, the market sponsor, as an operator engaging in the management of the commodity market, failed to take necessary measures to stop the infringement after being informed of the infringement committed by the merchants in the market and being interviewed many times. For the determination of necessary measures, such factors as the management responsibilities of the market sponsor, contractual stipulations, etc. as prescribed in laws and regulations shall be taken into full consideration to determine whether the market sponsor has taken necessary measures within the scope of its capacity to prevent the infringement. Necessary measures include notification, warning, suspension (rescission) of the contract or investigation of liability for breach of contract. In this case, the market sponsor failed to take any necessary measures, subjectively had the intention of providing assistance, and the result was consistent with the damage caused by the trademark infringement committed by the infringer, and its act was ultimately determined as constituting the infringement as prescribed in Item 6, Article 57 of the Trademark Law.

 

Source: CHINA IP Law Update