*AI-generated translation, for reference only.

[Keywords]

Civil; patent infringement; infringement of invention patent rights; equal protection; private economy; substantive resolution of disputes

[Case Facts]

Vanadium ore is a strategic non-ferrous metal resource of China, and global steel-smelting enterprises have enormous demand for vanadium-nitrogen alloy. State-owned enterprises Pan [REDACTED] Group Co., Ltd. and Pan [REDACTED] Group [REDACTED] Resources Co., Ltd. are the patentees of an invention patent with patent no. 0113****.8, titled "Method for Producing Vanadium Nitride." These two companies separately filed patent infringement actions against six private enterprises including  Hunan Zhong [REDACTED] New Materials Co., Ltd., claiming that they infringed the aforementioned patent right, and requesting the court to order the accused infringers in each of the six cases to compensate for economic losses and reasonable expenses incurred in enforcing rights, ranging from RMB 30,000,000 to RMB 90,000,000 per case (same currency hereinafter), with a total amount claimed of RMB 400,000,000. The Intermediate People's Court of Chengdu, Sichuan Province rendered first-instance judgments ordering four private enterprises including  Hunan Zhong [REDACTED] New Materials Co., Ltd. to compensate Pan [REDACTED] Group Co., Ltd. and Pan [REDACTED] Group [REDACTED] Resources Co., Ltd. for economic losses of RMB 5,000,000 and reasonable expenses of RMB 100,000 per case, totaling RMB 20,300,000; and also determined that two other private enterprises had not infringed, thereby dismissing the claims of Pan [REDACTED] Group Co., Ltd. and Pan [REDACTED] Group [REDACTED] Resources Co., Ltd. in those cases. Both Pan [REDACTED] Group Co., Ltd. and Pan [REDACTED] Group [REDACTED] Resources Co., Ltd., on the one hand, and the four private enterprises including Hunan Zhong [REDACTED] New Materials Co., Ltd., on the other, refused to accept the judgments and appealed to the Supreme People's Court.

[Mediation Outcome]

During the second instance proceedings, the collegial panel learned that the case concerned China's rare metal strategic resources, that the total amount at stake in the series of cases reached RMB 400,000,000, and that the case involved both the protection of state-owned enterprise innovation achievements and the development of the private economy, in particular the development of private technology innovation enterprises in ethnic minority areas. On the basis of a comprehensive review of the series of disputes, the panel facilitated a resolution through on-site inspection, local hearings, and active establishment of dialogue platforms to ease tensions, balance the interests of all parties, and promote mutual understanding, accommodation, and mutual benefit. After repeated consultations, the panel ultimately facilitated all parties in the series of cases in reaching a settlement; on the basis of equality and mutual benefit, the patentees granted authorization to enterprises with needs to implement the patents, thereby avoiding long-term entanglement of the major domestic vanadium ore metallurgical enterprises in patent disputes and the consequent impact on China's production and export of vanadium-nitrogen alloy. After all parties reached a comprehensive settlement, the Supreme People's Court issued civil rulings approving the withdrawal of actions by Pan [REDACTED] Group Co., Ltd. and Pan [REDACTED] Group [REDACTED] Resources Co., Ltd.

[Mediation Guidelines]

In patent cases involving strategic mineral resources, the people's courts shall elevate their perspective, take the overall situation into account, and avoid handling cases in isolation. On the premise of strict compliance with the law, substantive and final resolution of disputes and the promotion of sustainable industry development shall be treated as an important objective of case handling. The collegial panel in this case, through on-site inspection, local hearings, and other means, flexibly established dialogue platforms, eased the tensions among all parties, and ultimately facilitated the patentees in granting authorization to enterprises with needs to implement the patents, thereby achieving equal protection of state-owned and private enterprises and mutual benefit, avoiding "internal competition," and safeguarding healthy industry development and national mineral resource security.

[Related Index]

Article 157, Paragraph 1, Item 5 of the Civil Procedure Law of the People's Republic of China (amended in 2023)

Article 336 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China (Fa Shi [2015] No. 5, amended in 2022)

First Instance: Civil Judgments (2021) Chuan 01 Zhi Min Chu No. 330, 333, 329, 331, and 332 of the Intermediate People's Court of Chengdu, Sichuan Province (28 December 2022); Civil Judgment (2020) Chuan 01 Zhi Min Chu No. 506 (11 November 2022)

Second Instance: Civil Rulings (2023) SPC IP Civil Final  1113–1118 of the Supreme People's Court (25 March 2024, 26 March 2024, and 8 April 2024)