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Patent Litigation Strategy for Foreign Enterprises under Chinese Soft Environment of Law


Foreign-funded enterprises’ business operation in China is faced with a relatively unfamiliar intellectual property and legal system environment, which illustrates that their most urgent task is to become familiar with the soft environment of China's legal system, law enforcement, business culture, and litigation culture. Facing patent infringement lawsuits from competitors, it is a significant challenge for foreign-funded enterprises to adopt an effective defense strategy to avoid business losses and in the meanwhile make the disposal of intellectual property litigation conducive to market competition. 

 

In a typical case initiated by Mr. Wang, a Chinese patentee of a Pinyin IME patent, Beijing Wis & Weals Law Firm successfully defended a prominent internet company in the USA. Based on this typical case, we discuss the following issues such as the litigation strategy of patent infringement as defendant, the direct impact of the quality of the patent prosecution on the infringement litigation and the enlightenment of the patent prosecution strategy from infringement litigation.

 

I. Litigation strategy of defendant in the patent infringement disputes

The essential purpose of intellectual property is to serve the market competition, so intellectual property litigation is in fact the manifestation or tool of market competition. In patent infringement actions, the first measure usually adopted by the alleged infringer, when sued by the patentee for infringement, is to file a request for invalidation of the patent, and to formulate its own response strategy on this basis.


However, this practice should not be rigidly applied. 

 

The background of this typical case is that the prominent internet company used its Pinyin Input Method to enter the Chinese Pinyin Input Method product market. Before that, there had been many local enterprises in this field. In this context, when competitors try to use IPRs as a weapon to prevent new competitors from entering the market, new market players need to consider more important and macro issues such as corporate philosophy, corporate image and competition pattern.

 

If a new market player simply files a request for patent invalidation in responding to patent infringement complaints, then in addition to increased costs and onerous lawsuits, this practice may unnecessarily intensifies contradictions and even cause competitor peers' misjudgments. These are several factors that need to be considered when dealing with patent infringement cases.

 

II. The direct impact of the quality of patent prosecution on infringement proceedings

In many people's eyes, the primary goal of patent prosecution is to acquire authorization, which means successfully being granted. However, authorization is only the starting point of the whole life cycle of a patent. If a technical scheme or design scheme is regarded as the germination of a patent, then patent prosecution can be regarded as the process of planting seeds, nurturing seedlings and obtaining timber.

 

In practice, according to different purposes, strategies and customer demands of patent prosecution, patent prosecution can be roughly divided into two types: 

 

1. Patent prosecution aiming at authorization and certification.

2. Patent prosecution aiming at obtaining market competitiveness.

 

These two strategies are essentially different in many aspects such as their attitudes towards the scope of claim protection, market value expectations of patented technology schemes and their impact on infringement lawsuits.

 

. Enlightenment to Patent Prosecution Strategy

From the above analysis, it can be concluded that an enterprise should adopt different strategies for different patent prosecution.

 

Specifically, the above-mentioned patent prosecution strategy aiming at obtaining market competitiveness should be adopted in the case of highly important technologies, such as those with high degree of innovation, or core technologies of key products, or those with high dependence and influence on market competition.

 

As far as the typical case and its proceedings are concerned, the disputed patent should be deemed to be the patentee's core innovative technology scheme conducive to enhancing its market competitiveness. However, the patent prosecution work done for this patent has not aimed at market competitiveness, which is a strategic error.