*AI-generated translation, for reference only.

Keywords: Civil; Infringement of Exclusive Right to Layout-design of Integrated Circuits; Registration; Subject Matter of Protection; Scope of Protection; Originality

Key Points of the Judgment

1. The purpose of registering a layout-design of an integrated circuit is to determine the subject matter of protection, rather than to disclose the contents of the design. Disclosure of the contents of a layout-design is not a precondition for obtaining the exclusive right to the layout-design of an integrated circuit.

2. The scope of protection of the exclusive right to a layout-design of an integrated circuit may generally be determined on the basis of the reproduction or drawings of the layout-design submitted at the time of the application for registration. Where the contents of the layout-design cannot be identified from the reproduction or drawings, the scope of protection may be determined on the basis of a sample that is consistent with the reproduction or drawings.

3. The fact that registration of a layout-design of an integrated circuit has been obtained does not, as a matter of course, mean that the registered contents of the layout-design possess originality. The right holder shall still provide a reasonable explanation or description of the originality of the layout-design on which it asserts its rights. Where the accused infringer is unable to provide sufficient counter-evidence to rebut such explanation or description, the layout-design in question may be found to possess originality.

Case Facts

On April 22, 2012, Suzhou Sai [REDACTED] Electronic Technology Co., Ltd. (hereinafter "Sai [REDACTED] Company") applied for registration of a layout-design of an integrated circuit entitled "Single-chip Negative-electrode Protection Lithium Battery Protection Chip Integrating a Controller and Switching Transistor," and the registration was announced on June 8, 2012. The exclusive right to this layout-design of integrated circuit has remained valid up to the present. Without authorization, Shenzhen Zhun [REDACTED] Electronics Co., Ltd. (hereinafter "Zhun [REDACTED] Company," which has been deregistered) reproduced and sold chips that were substantially identical to the layout-design of integrated circuit at issue. Shenzhen Yu [REDACTED] Technology Co., Ltd. (hereinafter "Yu [REDACTED] Company") issued invoices on behalf of Zhun [REDACTED] Company in connection with the latter's sales. At the time when the accused infringing acts occurred, Hu [REDACTED] Huan was the sole shareholder of Zhun [REDACTED] Company, held 51% of the equity of Yu [REDACTED] Company, and concurrently served as legal representative of both companies. Hu [REDACTED] Huan subsequently transferred the equity of Zhun [REDACTED] Company to Huang [REDACTED] Dong and Huang [REDACTED] Liang. During the proceedings at first instance, Huang [REDACTED] Dong and Huang [REDACTED] Liang deregistered Zhun [REDACTED] Company.

Sai [REDACTED] Company contended that Zhun [REDACTED] Company and Yu [REDACTED] Company had jointly infringed the exclusive right to the layout-design of integrated circuit at issue, and that Hu [REDACTED] Huan, Huang [REDACTED] Dong, and Huang [REDACTED] Liang should bear joint and several liability for Zhun [REDACTED] Company. It accordingly filed a lawsuit with the court, requesting the court to order cessation of the infringement and to order Yu [REDACTED] Company, Hu [REDACTED] Huan, Huang [REDACTED] Dong, and Huang [REDACTED] Liang to jointly and severally compensate for economic losses.

Result of the Judgment

On June 19, 2019, the Intermediate People's Court of Shenzhen Municipality, Guangdong Province, rendered Civil Judgment (2015) Shen Zhong Fa Zhi Min Chu Zi No. 1106: (1) Yu [REDACTED] Company shall, within ten days from the date on which this judgment takes effect, compensate Sai [REDACTED] Company for economic losses in the amount of RMB 500,000; (2) Hu [REDACTED] Huan, Huang [REDACTED] Dong, and Huang [REDACTED] Liang shall bear joint and several liability for the foregoing amount of compensation; (3) Sai [REDACTED] Company's remaining claims are dismissed. After the judgment was pronounced, Yu [REDACTED] Company, Hu [REDACTED] Huan, Huang [REDACTED] Dong, and Huang [REDACTED] Liang appealed to the Supreme People's Court. On October 16, 2020, the Supreme People's Court rendered Civil Judgment (2019) Zui Gao Fa Zhi Min Zhong No. 490: the appeal is dismissed, and the original judgment is upheld.

Judge's Opinion

I. Whether Section Slicing of Samples May Be Used to Determine the Scope of Protection of the Layout-design at Issue

1. Whether paper copies of reproductions or drawings and samples may be used to determine the scope of protection of a layout-design. At the time of registering a layout-design, the materials submitted to the registration authority that contain the contents of the layout-design include: paper copies of reproductions or drawings, electronic versions of reproductions or drawings, and samples. Of these, paper copies of reproductions or drawings must be submitted; samples are submitted where the layout-design has already been put into commercial exploitation; and electronic versions of reproductions or drawings are submitted on a voluntary basis, with the further requirement that the electronic document contain all information of the layout-design and indicate the data format of the file. It can thus be seen that paper copies of reproductions or drawings are documents that must be submitted in order to obtain registration. In determining the scope of protection of a layout-design, the determination should generally be made on the basis of the paper copies of reproductions or drawings. With the development of the semiconductor industry, increasingly complex layout-designs can be implemented on smaller semiconductor substrates, and the degree of integration has been substantially raised. Even where, in accordance with Article 14 of the Implementing Rules of the Regulations on the Protection of Layout-designs of Integrated Circuits, "paper copies of reproductions or drawings shall be enlarged at least 20 times the size of the integrated circuit produced from the layout-design," there remain situations in which the magnification of the paper copies of reproductions or drawings is still insufficient to reflect the contents of the layout-design completely and clearly. In such circumstances, on the premise that the sample is consistent with the paper copy of the reproduction or drawings, section slicing of the sample may be employed to precisely reconstruct, by technical means, the detailed information of the layout-design contained in the chip sample, to extract the three-dimensional configuration information therein, and to determine details of the layout-design that cannot be identified from the paper copy, for the purpose of determining the contents of the layout-design.

2. Whether the scope of protection may be determined solely on the basis of the contents already disclosed at the time of registration. In contrast to the institutional design under the Patent Law, which adopts a regime of "disclosure in exchange for protection" for inventions and creations, the Regulations on the Protection of Layout-designs of Integrated Circuits do not make protection of a layout-design conditional upon disclosure of the layout-design by the right holder. When the China National Intellectual Property Administration conducts examination of layout-design registrations, its requirement with respect to paper copies is that they be enlarged at least 20 times, and its requirement with respect to electronic versions is that they contain all information of the layout-design. After registration is announced, the public may request to inspect the paper copies; however, with respect to confidential information contained in paper copies of layout-designs that have been put into commercial exploitation, no inspection or reproduction is permitted except as required for the purposes of infringement litigation or administrative handling procedures; with respect to electronic versions, likewise, except as required for the purposes of infringement litigation or administrative handling procedures, no person may inspect or reproduce them. As can be seen from the foregoing provisions, neither during the registration process nor after the registration announcement is there any requirement that the electronic version containing all information of the layout-design, or the confidential information contained in paper copies of layout-designs that have been put into commercial exploitation, be unconditionally disclosed in their entirety to the public.

The Regulations on the Protection of Layout-designs of Integrated Circuits adopt a sui generis model for the protection of layout-designs. The protection of layout-designs does not follow rules analogous to the patent protection rules applicable to inventions and creations—that is, it does not operate by means of registration-based disclosure of the contents of the layout-design in exchange for the exclusive right. At the same time, the protection of layout-designs under the Regulations is not entirely the same as the protection of works under the Copyright Law. The registration of a layout-design is a process for determining the subject matter of protection, and is a condition for obtaining the exclusive right to the layout-design; it is neither a process for disclosing the contents of the layout-design, nor a means of obtaining the protection of the exclusive right in consideration of disclosing the layout-design.

II. Whether the Layout-design at Issue Possesses Originality

On the originality of layout-designs. First, the exclusive right to a layout-design of an integrated circuit protects the elements and the three-dimensional configuration in the integrated circuit, and does not extend to ideas and the like. At the functional level expressing the layout-design, because no three-dimensional configuration of elements and circuits is contained therein, no protection is afforded. Below this level, the manifestation of originality progressively increases, and protection may be afforded to the allocation and arrangement of elements, the interconnections among the various components, the information-flow relationships, the combined effects, and so forth. Second, the original part to be protected shall be capable of relatively independently performing a certain electronic function. The originality of a protected layout-design may be embodied in any part of the layout-design that possesses originality, and may also be embodied in the layout-design as a whole. Any part of a layout-design that possesses originality is protected by law, regardless of whether such part constitutes a principal portion of the overall design and regardless of whether it is capable of realizing the core performance of the overall design. If a layout-design is composed of a combination of generally recognized conventional designs, then the combination as a whole shall possess originality. At the same time, where what the right holder asserts is an original part, such part shall be capable of relatively independently performing a certain electronic function. Third, originality is a precondition for the protection of a layout-design. The originality of a layout-design encompasses two meanings: that it was independently designed by the designer; and that it does not constitute a design that is generally recognized as conventional at the time of its creation. In infringement litigation, where the accused infringer raises an objection to the originality of a layout-design, the people's court shall determine the originality of the layout-design on the basis of the contentions and the evidence submitted by both parties. With respect to the part of the layout-design having originality as selected by the exclusive right holder, when conducting the originality determination centered on the part identified by the right holder, the determination shall be carried out successively on two levels: first, the protected layout-design constitutes a three-dimensional configuration of elements and circuits made for the purpose of performing a certain electronic function, failing which it cannot be protected by the exclusive right to the layout-design; and second, the three-dimensional configuration contained in the foregoing part was not a generally recognized conventional design at the time of its creation.

In identifying the original part, the right holder may at the same time provide a description of the original part. The right holder's description of originality may be a summary or abstraction of the original part from various perspectives, and need not necessarily include a description of the contents of the three-dimensional configuration. However, when conducting the originality determination with respect to the part identified by the right holder as aforesaid, the specific three-dimensional configuration of the elements and circuits contained in the part identified by the right holder shall, in accordance with the right holder's description of originality, be taken as the object of the determination.

In the course of proving the original part identified by the right holder, the layout-design as a whole or any part thereof shall not, as a matter of course, be deemed to possess originality merely because it has been registered and recorded. With respect to the proof of originality, however, the burden of proof on the right holder shall not be excessively increased so as to require the right holder to exhaust every possible means to prove the originality of the layout-design. Comparatively speaking, the accused infringer can rebut the original part asserted by the right holder simply by producing a single previously disclosed conventional layout-design. Therefore, in allocating the burden of proof on originality, full consideration shall be given to such factors as the characteristics of layout-designs of integrated circuits, the current state of registration of layout-designs of integrated circuits in China, and the parties' respective capacities to provide evidence. Taking as the basis the original part identified by the right holder, the right holder shall first be required to give a sufficient description or prima facie proof of the original part it asserts, and the accused infringer shall then produce contrary evidence to show the absence of originality, with the determination being made on the basis of a comprehensive consideration of the foregoing facts and evidence.

Relevant Statutory Provisions

Article 4, Paragraph 1, and Article 8 of the Regulations on the Protection of Layout-designs of Integrated Circuits