*AI-generated translation, for reference only.

Recently, the Intellectual Property Court of the Supreme People's Court rendered a final judgment in a dispute concerning confirmation of non-infringement of patent right. Where the party issuing the infringement warning, namely the patentee, admitted that the infringing entity and infringing product referred to in the Infringement Notification Letter were not the Plaintiffs in the dispute concerning confirmation of non-infringement of patent right or their products at issue, and waived the infringement technical comparison between the products at issue and the patent at issue, the Court upheld the Plaintiffs' claim for confirmation of non-infringement of patent right.

On November 22, 2022, Gong [REDACTED] 1, through the email account of Suzhou Ying [REDACTED] Medical Company under his control, sent an Infringement Notification Letter to [REDACTED] Capital, the investor of Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company controlled by Gong [REDACTED] 2. The letter claimed that the products operated by companies registered in China by Gong [REDACTED] 2 involved PET and MR reconstruction enhancement functions, and that such products infringed the patent right at issue owned by Nanchang [REDACTED] Technology Company, whose Legal Representative was Gong [REDACTED] 1, and requested [REDACTED] Capital to “attach great importance to such infringement and avoid investment risks and asset losses.” The companies controlled by Gong [REDACTED] 2 in China included Shanghai [REDACTED] Company, Changsha [REDACTED] Technology Company, and Beijing [REDACTED] Technology Company. After Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company received the notification from [REDACTED] Capital, they sent an Attorney's Letter to Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1, requesting them to withdraw the Infringement Notification Letter and clarify the facts to the relevant parties. Two months after Gong [REDACTED] 1 received the Attorney's Letter, he neither withdrew the warning nor filed a lawsuit. Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company held that the acts of Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 had placed their lawful rights and interests in a state of legal uncertainty, and therefore filed a lawsuit for confirmation of non-infringement of patent right.

After trial, the Court of First Instance held that Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 claimed that the accused infringing entity was Beijing [REDACTED] Technology Company, a party not involved in the case, and that the accused infringing products were products manufactured by Beijing [REDACTED] Technology Company, a party not involved in the case, and did not involve the products of Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company, of which Gong [REDACTED] 2 was the controlling shareholder. However, the products at issue manufactured, sold, and offered for sale by the aforesaid two companies might fall within the scope of the infringing products accused in the Infringement Notification Letter. As the Legal Representative of Nanchang [REDACTED] Technology Company, Gong [REDACTED] 1 neither withdrew the warning nor filed a lawsuit two months after receiving the Attorney's Letter sent by Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company. Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company had the right to file this lawsuit in order to eliminate the state of uncertainty caused by the acts at issue to their production and business operations. Since Gong [REDACTED] 1 and Nanchang [REDACTED] Technology Company expressly stated that the Infringement Notification Letter did not accuse Shanghai [REDACTED] Company, Changsha [REDACTED] Technology Company, or their products, it had been confirmed that the products at issue did not infringe the patent right at issue. Accordingly, the Court of First Instance rendered a judgment confirming that Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company did not infringe the patent right at issue. Gong [REDACTED] 1 and Nanchang [REDACTED] Technology Company were dissatisfied with the judgment of first instance and filed an appeal.

In the second instance, the Supreme People's Court held as follows. First, in both the defense opinions submitted by Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 during the first instance proceedings and the grounds for their objection to jurisdiction, they confirmed that the Infringement Notification Letter was directed at the infringement of the patent right at issue by products manufactured by Beijing [REDACTED] Technology Company, a party not involved in the case, and that the products at issue manufactured, sold, and offered for sale by Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company were unrelated to this case. It could thus be seen that Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 had excluded Shanghai [REDACTED] Company, Changsha [REDACTED] Technology Company, and their products at issue from the scope of the Infringement Notification Letter in terms of both the warned parties and the warned infringing acts, which may be deemed as their confirmation of facts adverse to themselves. Second, during the first instance and second instance proceedings, Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 did not raise any relevant claim for conducting a comparison of technical features between the products at issue and the patent at issue. Moreover, when Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company submitted a comparison chart of technical features between the products at issue and the patent at issue during the first instance hearing for comparison in court, Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1, upon being summoned by subpoena by the Court of First Instance, refused to appear in court to participate in the proceedings without justifiable reasons. The Court of First Instance therefore conducted the trial by default in accordance with law. Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 should bear the adverse legal consequences arising from their waiver of procedural rights such as cross-examination and debate in respect of the infringement comparison. Finally, Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 further claimed that they merely confirmed that the Infringement Notification Letter did not accuse Shanghai [REDACTED] Company, Changsha [REDACTED] Technology Company, or their products, but that this was not equivalent to confirming that the products of Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company did not infringe the patent right at issue. This case was a lawsuit for confirmation of non-infringement of patent right filed by Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company in response to the Infringement Notification Letter. Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 had confirmed that Shanghai [REDACTED] Company, Changsha [REDACTED] Technology Company, and the products at issue were not the entities and products accused in the Infringement Notification Letter, and had waived infringement comparison. If Nanchang [REDACTED] Technology Company and Gong [REDACTED] 1 claimed, on the basis of new facts, that Shanghai [REDACTED] Company and Changsha [REDACTED] Technology Company infringed their patent right at issue, they may separately file an infringement lawsuit. In conclusion, the Court of Second Instance rendered the following judgment: the appeal is dismissed, and the original judgment is upheld.

This judgment clarifies that, in a dispute concerning confirmation of non-infringement of patent right, where the patentee confirms that neither the Plaintiff nor the products at issue are the targets of its infringement warning and waives technical comparison, the people's court may directly confirm that the Plaintiff does not infringe the patent right at issue, so as to eliminate the state of uncertainty.

For the related objection to jurisdiction case, see the article in this column titled Jurisdiction over Lawsuits for Confirmation of Non-infringement of Patent Right Where an Infringement Warning Is Ambiguous as to Its Target.