The Issues of Repeated Patent Litigation under Chinese Civil Procedure Law

The winning patentee may find that the defendant ’s infringement action continues when the patent infringement litigation procedure is concluded. What should the patentee do at this time? Initiate a lawsuit again or ask for the execution of the previous judgment? Which one can be a good solution? Whether the continued action constitutes selling or offering to sell? How to distinguish between these two options? These questions show the special complexity and the huge disputes in judicial practice of patent infringement.

In a typical case that a prominent Chinese machinery company represented by Beijing Wis & Weals Law Firm against its competitor in the second instance of the mixer actuator utility model patent infringement, the dispute between the two parties focused on the above issues. The Beijing Higher People's Court made a fair judgment in the second instance. Based on the above typical case, we discuss the following issues of repeated litigation in patent litigation and the distinction between selling and offering to sell. 

The first instance of this case was named by Beijing Intellectual Property Court as a typical case of strengthening the judicial protection of intellectual property rights in 2016.

Compared with the judgments of the first instance, those of the second instance have changed significantly in the legal facts and the amount of compensation ascertained. In particular, the amount of compensation which was reduced from the claimed RMB 24 million to RMB 3.58 million ascertained in the judgment of first instance and to reasonable expenses of RMB 20,000 ascertained in the judgment of second instance. Therefore, it is necessary to further consider the legal issues embodied in the core disputes of this case.

I. "Non bis in idem" and repetitive suit

In general, the term "non bis in idem" means except otherwise provided, for cases in which a judgment or ruling with legal effect has been issued, no further suit may be brought pertaining to the same fact. 

Article 247 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China stipulates that: "If a party brings an suit regarding the litigated matters in the course of the proceedings or after the judgment comes into effect, and the following conditions are concurrently met, such suit constitutes repetitive suit: (1) the parties to the subsequent suit are the same as those to the prior suit; (2) the object of suit of the subsequent suit is the same as that of the prior suit; and (3) the claims of the subsequent suit are the same as those of the prior suit, or the claims of the subsequent suit essentially negate the judgment of the prior suit. Except as otherwise provided in the law and judicial interpretation, if a party brings a repetitive suit, the court shall rule that the suit should not be accepted; or if the suit has been accepted, that the suit shall be rejected."

Therefore, in patent infringement cases, if the infringements occurring during a period have been regulated by law in the prior suit, then the subsequent suit shall generally be rejected. However, for infringements that have not yet been regulated by law (especially re-infringement or duplicate infringement), the subsequent suit may be accepted.

II. Whether the dispute of the typical case should be resolved by bringing a separate suit or by completing the enforcement procedure of the prior suit

When the infringement of intellectual property rights is continuing after the judgment is issued, whether the dispute over the infringement which the right holder finds continues to exist should be resolved by bringing a separate suit or by completing the enforcement procedure of the prior suit lies in whether the infringement identified in the prior suit essentially continues after the judgment is issued in accordance with the law. 

In patent infringement litigation, if the technical solution implemented (whether product or method) is identical to the allegedly infringing technical solution in the prior suit, such behavior is obviously the essential continuation of the infringement in the prior suit. Under this circumstance, the cessation of infringement as an important part of the claim in the prior suit was not implemented, so the enforcement procedure of the prior suit may be implemented to resolve the dispute.

If the technical solution implemented is not identical to the allegedly infringing technical solution in the prior suit, there will be no continual implementation of the enforcement procedure of the prior suit, and a separate suit shall be instituted to determine whether the new technical solution implemented falls within the scope of protection of the disputed patent.

Ⅲ. How to distinguish selling from offering for sale

Regarding patent infringement, the relations between selling and offering for sale include the following: 

1. The offering for sale, as a manifestation of intention to sell patented products, is an act before the selling is realized. The purpose of regulating the offering for sale is to curb the follow-up transaction as early as possible and to control the infringement behaviors before their implementation.

Selling is a process of transaction in which the seller transfers ownership of the subject matter to the buyer for profit.

2. Offering for sale is an act of infringement independent of selling, rather than the preparatory stage or a part of selling. In other words, offering for sale, as an act of infringement, is independent from selling. Whether the offering for sale is established or not depends on the implementation of selling.

3. When offering for sale occurs, the infringing products may enter the selling stage at any time. Therefore, the regulation of offering for sale essentially aims at eliminating such emergent situation of patent.

When selling occurs, the infringer gains profits by selling, and regards selling as its principal approach to profits. Therefore, the purpose of regulating the selling activities is to cut off the profit approaches of patented products.