*AI-generated translation, for reference only.

Recently, while hearing two related cases concerning patent ownership, the Intellectual Property Tribunal of the Supreme People's Court discovered that the parties were suspected of engaging in fraudulent litigation in another case. Consequently, the Supreme People's Court initiated adjudicatory supervision procedure and, exercising its authority, directly took up a copyright infringement case originally adjudicated by a local intermediate court. Following the retrial, the Supreme People's Court issued a judgment finding that the parties in this case had colluded in bad faith to fabricate facts of infringement and file a copyright infringement lawsuit,and subsequently used the final judgment from this fraudulent lawsuit in the patent ownership litigation with the intent to usurp another party's patent rights. This severely disrupted the normal adjudication of cases and the order of litigation by the People's Courts. Consequently, the court ruled to overturn the first-instance judgment on copyright infringement, imposed the maximum judicial penalty of 100,000 yuan on each of the two individual parties for their fraudulent litigation conduct, and referred the case to the public security authorities for investigation as a suspected criminal offense.Currently, both penalized parties have paid the fines, and the public security authorities have initiated criminal investigations against them.

In two related patent ownership cases, Dongguan [REDACTED] Company filed a patent ownership lawsuit with the court, asserting that Yan, as a former employee of the company, had applied for five patents within one year of leaving the company. The company argued that these five patents constituted service inventions and should therefore belong to the company.Following the patent ownership lawsuit filed by the Dongguan company, He [REDACTED] yao filed a copyright infringement lawsuit in another court, claiming that he was the copyright holder of the technical drawings in question and that Yan [REDACTED]ugao had infringed upon his copyright by using the technical drawings he had access to to apply for patents.Based on the CD containing the technical drawings submitted by He [REDACTED] yao and his chat records with a Taobao merchant regarding the 3D printing of the technical drawings, the trial court issued a first-instance judgment finding that Yan had infringed upon He [REDACTED] yao's copyright. Neither party appealed the first-instance judgment, and it took immediate effect.He [REDACTED] yao subsequently joined the aforementioned patent ownership litigation as a third party with independent claims, asserting that the disputed patent rights belonged to him based on the first-instance judgment regarding copyright infringement.

In its retrial of the copyright infringement case, the Supreme People's Court held that, based on the established facts, the copyright infringement case constituted a fraudulent lawsuit:

First, a conflict of interest existed between He [REDACTED] yao and Yan [REDACTED] gao, providing the foundational conditions for malicious collusion. First, He [REDACTED]yao purchased products from a certain company in Dongguan through Yan [REDACTED]ugao's introduction, and the two had known each other for a long time.Second, Yan and He [REDACTED] yao, along with others, established Xun Company, and subsequent actions such as the transfer of shares further demonstrated the close relationship between the two. While the parties were still embroiled in a copyright infringement dispute, Yan and his wife transferred their shares in Xun Company to He [REDACTED]yao; Moreover, Yan and his wife, Huang, continued to work at Xun Company—which was wholly owned by He [REDACTED]yao—even after the transfer, which clearly defied common sense.

Furthermore, He [REDACTED]yao fabricated the identity of a "copyright holder" and the facts of infringement to file this lawsuit, effectively engaging in malicious collusion with Yan. First, none of the evidence submitted by He [REDACTED]yao proves that he is the copyright holder of the technical drawings in question. Despite being fully aware of this fact, he fabricated the identity of a "copyright holder" and the fact that Yan infringed upon copyright to file this lawsuit, demonstrating clear subjective malice.Second, regarding the timing of this lawsuit, the date of filing the complaint was only a few days after a certain company in Dongguan filed a patent ownership lawsuit against Yan;In that patent ownership case, because the court was unable to serve the litigation documents on Yan [REDACTED] gao, it resorted to service by public notice. Yet He [REDACTED] yao was able to learn of the existence of that patent ownership lawsuit in a timely and accurate manner. Furthermore, he did not immediately choose to join the proceedings before the court hearing the patent ownership case, but instead strategically selected a different court to file this copyright infringement lawsuit. The logic behind his actions defies common sense.Third, Yan [REDACTED] gao did not raise any substantive defenses in this case and effectively acquiesced to He [REDACTED] yao's claims. Fourth, the course of the proceedings clearly reveals Yan [REDACTED] gao's intent to delay the patent ownership lawsuit filed by a certain company in Dongguan and to collude with He [REDACTED] yao.Fifth, during the first-instance proceedings of this case, both He [REDACTED]yao and Yan [REDACTED] gao were fully aware that the patent ownership case filed by a certain company in Dongguan against Yan [REDACTED] gao was pending, yet they failed to disclose this information to the first-instance court, intentionally concealing important facts that could have influenced the outcome of this case, demonstrating clear malice.Sixth, since the first-instance judgment in this case took effect, Yan [REDACTED] gao has yet to fulfill the compensation obligations established by the judgment. Moreover, the two parties continue to work together at Xun Company, and He [REDACTED] yao has not actively demanded that Yan [REDACTED] gao fulfill his obligations; their behavior is highly irregular.

Finally, He [REDACTED] yao and Yan colluded in bad faith; the true purpose of filing this lawsuit was to influence the outcome of the patent ownership case filed by a certain company in Dongguan against Yan, with the aim of appropriating the patent rights in question from that company.First, Yan [REDACTED]ugao possesses the capability to research and develop the patented technology in question, and the patent relates to the technical field of a certain company in Dongguan where he was formerly employed. Therefore, Yan [REDACTED]ugao should be considered the designer of the technical drawings and the actual inventor of the patent, and the patent constitutes a work-related invention of the company in Dongguan.In this case, He [REDACTED]uyao claims to be the copyright holder of the technical drawings in question. However, regarding his R&D capabilities, while he can briefly describe the working principles and inventive features of the patent in question, he is unable to answer questions regarding the basic knowledge of the relevant technical field, making it difficult to conclude that he possesses the R&D capabilities required for the relevant technology.Second, Yan [REDACTED]ugao was fully aware that the patent in question was a work-related invention and should belong to a certain company in Dongguan, yet he colluded with He [REDACTED]uyao with the aim of appropriating the patent rights.Yan Gaoming intentionally delayed the proceedings regarding the ownership of the patent rights, concealed the facts of this case, and cooperated with He [REDACTED]yao to obtain a final first-instance judgment as soon as possible. He then assisted He [REDACTED]yao in seeking to acquire ownership of the patent rights in question, thereby attempting to use the final judgment to challenge Dongguan Company's claim to ownership of the patent rights, with the ultimate goal of seizing the patent rights that should rightfully belong to Dongguan Company.

In judicial practice, determining whether a fraudulent litigation has been committed between parties generally requires consideration of the following factors: first, the existence of malicious collusion between the parties; second, the parties' conduct manifests as fabricating facts and filing a lawsuit; and third, the purpose of the parties' malicious collusion is to attempt to infringe upon national interests, public interests, or the legitimate rights and interests of others.Malicious collusion between parties, through litigation or mediation, interferes with the adjudication activities of state judicial organs, obstructs normal judicial proceedings, undermines judicial authority and public trust in the judiciary, consumes and wastes judicial resources, and infringes upon the lawful rights and interests of others; such conduct constitutes an act of obstructing civil litigation. In response, the People's Court may impose fines or detention depending on the severity of the circumstances; if a crime is constituted, criminal liability shall be pursued in accordance with the law.This case serves as a reference for determining the elements of a false lawsuit. More importantly, the court imposed severe fines on the parties involved in the false lawsuit in accordance with the law; simultaneously, it promptly referred the criminal leads to the competent public security authorities due to suspected criminal liability for the crime of fraudulent litigation.Judging by the subsequent enforcement outcomes of this case, the parties accepted the judgment and the penalties, and the local public security authorities have already initiated criminal investigations against the two individuals. The handling of this case has effectively deterred suspects of fraudulent litigation, demonstrating the People's Courts' clear stance and resolute measures in promoting a culture of integrity, practicing the core socialist values, and severely cracking down on malicious collusion and fraudulent litigation. This contributes to fostering social integrity and strengthening judicial authority.