*AI-generated translation, for reference only.

Recently, the Intellectual Property Court of the Supreme People's Court rendered a judgment of second instance in a dispute concerning infringement of an invention patent right and liability for damages arising from maliciously instituted intellectual property litigation. The Court determined that Lu [REDACTED] Mei Company, the patentee, repeatedly instituted patent infringement lawsuits against multiple models of robotic dog products of Yu [REDACTED] Company at the critical stage of Yu [REDACTED] Company's initial public offering (IPO), despite knowing that Yu [REDACTED] Company's robotic dog products did not constitute infringement and that the lawsuits clearly lacked a factual basis. Such conduct constituted malicious institution of intellectual property litigation. The Court ordered Lu [REDACTED] Mei Company to fully compensate Yu [REDACTED] Company for the claimed economic losses of RMB 80,000.

Lu [REDACTED] Mei Company was established in 2005 and was mainly engaged in the sale of food, agricultural and sideline products, daily necessities, and the like. Its business scope was unrelated to robotic dogs. In recent years, Zhou [REDACTED], the Legal Representative of Lu [REDACTED] Mei Company, and [REDACTED] Company, of which Zhou [REDACTED] also served as the Legal Representative, had, as plaintiffs, filed more than 20 patent infringement lawsuits with courts against multiple banks and other enterprises, but did not prevail in any of them. Yu [REDACTED] Company was established in 2016 and is an internationally renowned technology company, mainly engaged in the research, development, and manufacture of embodied-intelligence high-tech products such as robotic dogs and humanoid robots. On June 25, 2025, Lu [REDACTED] Mei Company obtained from an affiliated company the patent right to the invention patent No. 201610396363.0, titled "An Electronic Dog" (hereinafter referred to as the patent at issue). Only five days later, on July 1, 2025, Lu [REDACTED] Mei Company filed a patent infringement lawsuit against Yu [REDACTED] Company with the Hangzhou Intermediate People's Court of Zhejiang Province (hereinafter referred to as the Court of First Instance), claiming that Yu [REDACTED] Company's Go2 robotic dog infringed the patent right at issue. During the first instance proceedings of that case, a number of online media outlets, including Sohu.com and Sina.com, began to extensively report, from mid-July 2025, on Yu [REDACTED] Company's IPO counseling filing. Two months later, on September 12, 2025, Lu [REDACTED] Mei Company filed this lawsuit with the Court of First Instance on the ground that Yu [REDACTED] Company's A2 robotic dog infringed the same patent right. Yu [REDACTED] Company filed a counterclaim in this case, arguing that this lawsuit filed by Lu [REDACTED] Mei Company, as well as the previously filed Go2 robotic dog case, both constituted malicious litigation, and requested the Court to order Lu [REDACTED] Mei Company to compensate it for economic losses of RMB 80,000.

On September 26, 2025, the Court of First Instance rendered a judgment of first instance in the Go2 robotic dog case, dismissing all claims of Lu [REDACTED] Mei Company. Lu [REDACTED] Mei Company appealed to the Supreme People's Court, and during the second instance proceedings claimed that a prior judgment should be rendered ordering compensation of RMB 80 million, while also submitting an application for reduction or exemption of litigation fees. On the following day, it further submitted a Letter Clarifying the Subject Matter of the Litigation, adjusting the claimed compensation amount to RMB 500. On February 3, 2026, the Supreme People's Court rendered the judgment of second instance in the Go2 robotic dog case, finding that, compared with the bionic fur feature, gas sensor, and liquid level sensor in Claim 1, the Go2 robotic dog did not possess technical features identical or equivalent to the aforesaid three technical features, and therefore did not constitute infringement. The Court dismissed the appeal of Lu [REDACTED] Mei Company. With respect to the dishonest conduct of Lu [REDACTED] Mei Company in the Go2 robotic dog case, the judgment of second instance in that case expressly stated: "Lu [REDACTED] Mei Company did not actually manufacture or sell patented products, and its business scope was also clearly unrelated to the patented technology at issue. It filed a lawsuit against Yu [REDACTED] Company only five days after acquiring the patent right. Although it claimed that Yu [REDACTED] Company had gained tens of millions of yuan from infringement, it only asserted a compensation claim of RMB 500, and further requested that the amount be 'subject to the audit by the people's court.' After the first instance judgment had determined non-infringement, it further requested, in the second instance, a prior judgment ordering compensation of RMB 80 million and used this as its compensation claim, but one day later confirmed in writing that the amount was RMB 500. The aforesaid conduct of Lu [REDACTED] Mei Company in the first instance and second instance proceedings may be described as both carefully calculated and capricious, and violates the principle of good faith. This Court condemns such conduct."

After the judgment of second instance in the Go2 robotic dog case was rendered, the Court of First Instance rendered the judgment of first instance in this case, finding that the A2 robotic dog also did not constitute infringement, dismissing all claims of Lu [REDACTED] Mei Company, and at the same time determining that Lu [REDACTED] Mei Company constituted malicious litigation. The Court supported the counterclaim of Yu [REDACTED] Company and ordered Lu [REDACTED] Mei Company to compensate Yu [REDACTED] Company RMB 80,000. Lu [REDACTED] Mei Company was dissatisfied and appealed to the Supreme People's Court.

On April 24, 2026, the Supreme People's Court rendered the judgment of second instance in this case, dismissing the appeal claims of Lu [REDACTED] Mei Company and upholding the original judgment.

The judgment of second instance held that the A2 robotic dog accused of infringement in this case and the Go2 robotic dog accused of infringement in another case both did not possess technical features identical or equivalent to the bionic fur feature, liquid level sensor, and gas sensor defined in Claim 1 of the patent at issue, and therefore did not constitute infringement. Nor was there any procedural violation by the Court of First Instance.

Regarding the determination of malicious institution of intellectual property litigation, the judgment of second instance emphasized that the principle of good faith is a basic principle running through the entire process of civil activities, including the exercise of patent rights, as well as civil litigation. A party must observe the principle of good faith when instituting and conducting patent infringement litigation, and must not pursue infringement in the name of "rights protection" or use so-called "rights protection" conduct that is substantively an abuse of rights as a tool to impair the lawful rights and interests of others, seek improper benefits, or disrupt the market order of fair competition and the normal judicial order. When determining whether a patent infringement lawsuit instituted by a right holder constitutes malicious litigation, the people's court should adhere to a systematic approach, make coordinated consideration and comprehensive judgment, and apply a standard integrating subjective and objective factors. It should comprehensively consider pre-litigation and litigation factors, as well as factors within and outside the litigation, and, on the basis of examining whether the litigation lacks a rights basis and factual grounds, make a determination by comprehensively considering factors such as the right holder's litigation claims, timing of filing, litigation risks, litigation strategy, and the degree of imbalance of interests caused between the parties. In general, the following factors should be given particular consideration:

 (1) whether the lawsuit filed by the right holder clearly lacks a rights basis or factual grounds; (2) whether the right holder knew this and had subjective fault;(3) whether damage was caused to another person; and (4) whether there is a causal relationship between the litigation and the damage.

In particular, where the right holder files multiple patent infringement lawsuits against multiple models of similar products of the accused infringer based on the same patent, the specific conduct of the right holder in each lawsuit should be considered comprehensively.

As to whether the conduct of Lu [REDACTED] Mei Company constituted malicious litigation, the judgment of second instance held as follows:

First, from the objective aspect, the series of infringement lawsuits filed by Lu [REDACTED] Mei Company all clearly lacked factual grounds. To begin with, the Go2 robotic dog and A2 robotic dog accused of infringement both clearly did not possess the bionic fur feature of the patent at issue, and this alone was sufficient to make a simple and clear determination that infringement was not constituted. Lu [REDACTED] Mei Company's claim that the bionic fur feature in Claim 1 of the patent at issue was not an essential technical feature clearly had no legal basis and was inconsistent with the basic consensus in judicial practice. In addition, Lu [REDACTED] Mei Company was fully capable of, and had the conditions to, obtain physical samples of the accused infringing products already publicly sold through open and lawful channels, but failed to provide them from beginning to end in both cases, without any legitimate and reasonable grounds. Instead, it applied to the people's court for investigation and evidence collection and evidence preservation on grounds such as the alleged ease of destruction of evidence, which were plainly inconsistent with the facts and clearly lacked proper justification.

Second, from the subjective aspect, Lu [REDACTED] Mei Company knew that the series of infringement lawsuits it filed clearly lacked factual grounds, and that the relevant litigation conduct clearly lacked justification; its subjective fault was obvious. To begin with, based on the professional knowledge of Zhou [REDACTED], the Legal Representative of Lu [REDACTED] Mei Company, especially in light of his prior filing of more than 20 patent application and patent infringement lawsuits, Lu [REDACTED] Mei Company could have relatively easily determined that the A2 robotic dog, which was similar to the Go2 robotic dog, did not constitute infringement. It should have decided more prudently and rationally whether to file a patent infringement lawsuit against Yu [REDACTED] Company, rather than casually filing lawsuits for "rights protection" without a basic factual basis. In addition, judging from the process of the series of infringement lawsuits, after an effective judgment had already determined that the Go2 robotic dog did not constitute infringement, Lu [REDACTED] Mei Company knew that the disputed issues concerning whether the Go2 robotic dog and the A2 robotic dog constituted patent infringement were essentially the same, and that the A2 robotic dog also plainly did not constitute infringement, yet it continued to advance this lawsuit and insisted on appeal. It even persisted in requesting the people's court to order Yu [REDACTED] Company to submit production and sales records and financial books related to the accused infringing products, or to conduct evidence preservation and judicial audit in accordance with law. Its subjective fault was relatively obvious. Furthermore, Lu [REDACTED] Mei Company filed the Go2 robotic dog case five days after obtaining the patent at issue, and when this case was filed, Yu [REDACTED] Company's IPO counseling filing had already been widely reported. During the trial of the two cases, Yu [REDACTED] Company's IPO was at key stages involving regulatory inquiries and updates to the prospectus, thereby causing Yu [REDACTED] Company to perform information disclosure obligations related to the IPO in accordance with law, and to make special explanations and risk warnings to regulatory authorities and potential investors regarding the business risks and financial risks that might arise from the infringement litigation, which triggered unnecessary market concerns and would plainly have a negative impact on Yu [REDACTED] Company's IPO process. Lu [REDACTED] Mei Company was plainly aware of this and intentionally advanced the lawsuits, showing even more obvious subjective fault. In addition, during the litigation process, Lu [REDACTED] Mei Company repeatedly and capriciously changed its litigation claims, made self-contradictory litigation assertions, and expressly stated that it would continue to file multiple lawsuits against different models of similar robotic dog products of Yu [REDACTED] Company based on the patent at issue. Moreover, after the judgment of second instance in the Go2 robotic dog case had expressly determined that Lu [REDACTED] Mei Company's relevant litigation conduct in the first instance and second instance proceedings of that case "may be described as both carefully calculated and capricious, and violates the principle of good faith," Lu [REDACTED] Mei Company still continued to advance this lawsuit, showing obvious subjective fault. The grounds asserted by Lu [REDACTED] Mei Company that the Court of First Instance committed procedural violations were purely far-fetched, and could also, to a certain extent, serve as counter-evidence of its lack of good faith in litigation.

Third, the relevant litigation conduct of Lu [REDACTED] Mei Company directly caused damage to Yu [REDACTED] Company. Liability for damages arising from malicious litigation belongs to general tort liability. The scope of damages for infringement should be determined in accordance with the principle of full compensation, by considering whether there is legal causation between the damage and the infringing act. In principle, losses from property preservation caused to the other party by malicious litigation, losses of expected benefits resulting from the loss of business opportunities, reasonable expenses incurred in responding to malicious litigation, and the like may all be included within the scope of damages. The series of infringement lawsuits filed by Lu [REDACTED] Mei Company against Yu [REDACTED] Company constituted malicious litigation and objectively had a negative impact on the normal production and business activities of Yu [REDACTED] Company, resulting in damage. The compensation amount of RMB 80,000 claimed by Yu [REDACTED] Company in its counterclaim in this case was minimal and merely symbolic compensation; the people's court should support it.

This case further clarifies the criteria for determining malicious litigation instituted in the name of "protecting" patent rights and the corresponding legal liability. The most effective way to combat dishonest conduct such as malicious litigation and abuse of rights is to adhere to the judicial concepts that "no one may benefit from unlawful conduct" and that "dishonest parties shall not be allowed to profit," so that wrongdoers pay a heavy price and parties are guided to exercise their rights in good faith. Only in this way can it be ensured that the intellectual property protection system is not exploited by opportunists, the stable expectations and development confidence of innovation entities and investors be enhanced, the national innovation-driven development strategy be better served, the development of new-quality productive forces be served and safeguarded, and the order of fair competition be maintained.