*AI-generated translation, for reference only.

Recently, the Intellectual Property Court of the Supreme People's Court rendered a ruling of second instance in an appeal case involving an objection to jurisdiction over a dispute concerning confirmation of non-infringement of patent right. Where the "infringement warning" issued by the right holder does not expressly identify the specific patent right allegedly infringed or the specific product or method accused of infringement, the people's court may reasonably determine the scope of trial of the dispute over confirmation of non-infringement of patent right by taking into account the patent right that may be involved in the "infringement warning," the specific product or method that may be involved, and the possible adverse impact suffered by the warned party or interested party as a result of the "infringement warning," and may use such scope as a factor in determining jurisdiction over the case.

Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company filed a lawsuit with the Shanghai Intellectual Property Court, alleging that Gong [REDACTED] 1, through the email account of Nanchang [REDACTED] Technology Company, sent an Infringement Notification Letter to [REDACTED] Capital, their investor, claiming that the products operated by companies registered in China by Gong [REDACTED] 2 involved PET and MR reconstruction enhancement functions, and that some products operated in the United States were also suspected of infringing the patent rights of Nanchang [REDACTED] Technology Company. Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company replied by letter, requesting Gong [REDACTED] 1 to withdraw the Infringement Notification Letter and clarify the facts. More than two months had passed since Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 received the reply letter, but they neither withdrew the warning nor filed a lawsuit. Therefore, Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company filed this lawsuit for confirmation of non-infringement of patent right, requesting the court to confirm that the products at issue manufactured, sold, and offered for sale by Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company did not infringe the patent rights at issue of Nanchang [REDACTED] Technology Company, and to order Nanchang [REDACTED] Technology Company to withdraw the Infringement Notification Letter it had issued.

During the period for submitting a defense, Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 raised an objection to jurisdiction, arguing that:

(1) the two Plaintiffs asserted no claims against Gong [REDACTED] 1 whose domicile was in Shanghai Municipality; Gong [REDACTED] 1 was neither the patentee of the patents at issue nor a proper Defendant in this case, and jurisdiction over this case should be determined by reference to the domicile of Nanchang [REDACTED] Technology Company as the connecting factor; and

(2) the Infringement Notification Letter was directed at the relevant products manufactured by Beijing [REDACTED] Technology Company, a party not involved in the case, and the products at issue manufactured and operated by Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company were unrelated to this case.

The Court of First Instance held that the Infringement Notification Letter at issue did not expressly identify any specific target of the infringement allegation or any specific infringing product, and that the possible scope of adverse impact should be comprehensively examined in light of the content of the letter. The main content of the letter was to allege that the products operated by companies registered in China by Gong [REDACTED] 2 involved PET and MR reconstruction enhancement functions and infringed multiple patents of Nanchang [REDACTED] Technology Company. Meanwhile, Gong [REDACTED] 2 was the de facto controlling shareholder of Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company, and also the Legal Representative of Beijing [REDACTED] Technology Company. Changsha [REDACTED] Technology Company had obtained a medical device registration certificate for the products at issue, and Shanghai [REDACTED] Company was the seller of the products at issue. Nanchang [REDACTED] Technology Company was the patentee of the patents at issue, and the patents at issue involved MR technology. Accordingly, it could be determined that the products at issue manufactured and sold in China by Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company, both actually controlled by Gong [REDACTED] 2, involved MR reconstruction enhancement functions, and the products at issue might fall within the scope of infringing products accused in the Infringement Notification Letter. As the seller of the products at issue, Shanghai [REDACTED] Company had its domicile in Shanghai Municipality, and it could be determined that it had conducted sales of the products at issue in Shanghai Municipality. The Court of First Instance, as the court at the place where the alleged infringing act occurred, had jurisdiction over this case, and the objection to jurisdiction raised by Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 could not be sustained. The Court of First Instance therefore ruled to dismiss the objection to jurisdiction. Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 were dissatisfied and appealed to the Supreme People's Court.

In the second instance, the Supreme People's Court held that the dispute in a case concerning confirmation of non-infringement of patent right lies in whether the acts of the warned party or interested party infringe another person's patent right, and that the determination of whether patent infringement is constituted is the core issue in dispute. Therefore, the provisions concerning jurisdiction over civil cases involving patent infringement disputes may be applied by reference to determine jurisdiction over civil cases involving disputes concerning confirmation of non-infringement of patent right.

In this case, the Infringement Notification Letter did not directly identify the warned party or interested party, nor did it identify their specific products or methods. Instead, it alleged that "the products operated by companies registered in China by Gong [REDACTED] 2 involve PET and MR reconstruction enhancement functions and infringe multiple patents of Nanchang Rui [REDACTED] Medical, namely Nanchang [REDACTED] Technology Company." Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 argued in defense in this case that the infringing entity accused in the Infringement Notification Letter was Beijing [REDACTED] Technology Company, and that the accused infringing products were SubtleMR and SubtlePET manufactured by Beijing [REDACTED] Technology Company, which did not involve the Plaintiffs in this case. However, judging from the content of the Infringement Notification Letter, it broadly referred to companies registered in China by Gong [REDACTED] 2 and the products operated by them that involved PET and MR reconstruction enhancement functions. It could not be concluded that the accused infringing entity was limited to Beijing [REDACTED] Technology Company, nor could it be concluded that the accused infringing products were limited to SubtleMR and SubtlePET manufactured by Beijing [REDACTED] Technology Company. Gong [REDACTED] 2 was the controlling shareholder of Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company, and the products at issue manufactured by Changsha [REDACTED] Technology Company and sold by Shanghai [REDACTED] Company involved the "MR reconstruction enhancement function" accused in the Infringement Notification Letter, and were clearly affected by the Infringement Notification Letter. Therefore, when Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company filed this lawsuit, their assertion that the infringing products accused in the Infringement Notification Letter included the products at issue, and that the accused infringing acts included the manufacturing and sales acts of the two companies, had corresponding factual and legal basis. The claim of Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 that the lawsuit filed by Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company did not satisfy the conditions for instituting a lawsuit for confirmation of non-infringement of patent right could not be sustained.

Changsha [REDACTED] Technology Company and Shanghai [REDACTED] Company submitted evidence formed before the Infringement Notification Letter was sent, including sales contracts, purchase and sales orders, authorized distributor cooperation agreements, and sales invoices, which could prima facie prove that Changsha [REDACTED] Technology Company manufactured the products at issue and Shanghai [REDACTED] Company sold the products at issue. Therefore, the evidence on record could prima facie prove that the places where the sales acts of the products at issue involved in the Infringement Notification Letter occurred included Shanghai Municipality, and Shanghai Municipality could serve as a jurisdictional connecting factor in this case. The Court of First Instance had jurisdiction over this case. The Court of Second Instance ruled: the appeal is dismissed, and the original ruling is upheld.

This case has reference value for the trial of similar cases.

For the related objection to jurisdiction case, see the article in this column titled Court Upholds Confirmation of Non-infringement in Accordance with Law Where an Infringement Warning Misidentifies the Alleged Infringer and Product.