Design patents play an extremely important role in the intellectual property (IP) strategies of enterprises. The string of cases with a relatively major social impact that has occurred in recent years has drawn wide attention from Sino-foreign enterprises. In light of his practical experience acting as counsel for Honda in a series of design patent protection actions conducted in China, the author in this column examines some important issues in enterprises’ use of legal means to protect their design patents.
Importance of patent portfolios. Pursuant to Chinese laws, any prior disclosure of a design undermines its novelty, making it impossible to secure legal protection for it at the patent level. Accordingly, an enterprise must promptly file for a patent before releasing a product on the market, failing which it will find it extremely difficult to protect its rights. Cases in which the development of an innovation has been affected by an inadequate patent portfolio or patent strategy are not rare in practice.
Selection of remedies. Pursuant to current laws, a design is a new design that is aesthetically pleasing, suitable for industrial application, and made in respect of the form or pattern of a product, or a combination of these, or a combination of colours, form and pattern. China has incorporated designs within the framework of protection of the Patent Law and established a parallel two-track protection system that includes judicial and administrative protection.
That is to say, a rights holder can file a complaint with the administrative IP law enforcement authority requesting that it deal with an act of infringement, or, alternatively, it can institute a legal action directly in a People’s Court, with the infringer bearing the attendant civil liability, such as ceasing the infringement and compensating for the losses.
With respect to judicial protection, in recent years Chinese courts have exerted greater effort in resolving the problem of the minimal costs of infringement and the considerable costs of rights protection by increasing the intensity of punishment for IP infringement through such means as reasonable allocation of the burden of proof, and by increasing the measure of damages in accordance with the law.
For example, in the findings in court judgments, taking into consideration the difficulty in adducing evidence for the damage to patent rights, where the accounts and documentation relating to patent infringement are mainly in the possession of the infringer, if the rights holder is able to adduce, within its evidence adducement capacity, sufficient evidence of the benefits derived by the infringer, or provide sufficient explanation of the reasonableness of the amount of the economic losses it is claiming, and the infringer fails to provide counter evidence to the rights holder’s damage claim, the People’s Court can determine the benefits derived by the infringer as a result of the infringement based on the rights holder’s claims and the evidence provided by it.
Additionally, People’s Courts have strengthened the application of such interim protection measures as property preservation, act preservation, evidence preservation, etc., and in doing so have enhanced the timeliness, convenience and effectiveness of judicial remedies.
Compared with a civil infringement lawsuit, the main advantage of seeking to protect one’s rights through administrative means is that it is faster, but the downside is that if it is impossible to mediate a resolution in a dispute between parties, the administrative authority only has the power to render a decision ordering the infringer to cease the infringement, and it cannot require the infringer to bear damages or assess other administrative penalties such as fines.
Usefulness of a patent evaluation report. An evaluation report is a patent evaluation report prepared by the State Intellectual Property Office (SIPO) at the behest of the patent holder or a materially interested party, which involves a search of the relevant utility model patent or design patent, and an analysis and evaluation of whether the patent satisfies the granting conditions specified in the Patent Law and its implementing rules.
As SIPO only conducts a formal examination before granting a design patent, and does not conduct an examination as to whether it satisfies the substantive elements of the conditions for granting a patent, in practice the provision of an evaluation report has become a sort of norm when a rights holder elects to protect its design by administrative or judicial means.
An evaluation report is not only preliminary evidence used by the court or the administrative patent law enforcement authority when handling an infringement dispute to judge the stability of the design patent and whether to toll a legal action, but it can also assist the rights holder in understanding the stability of its patent rights and avoiding blind exercise of such rights.
Infringement comparison and determination. The determination of infringement of a design patent essentially involves three steps: (1) determining the scope of protection of the design patent; (2) determining whether the product incorporating the design patent and the authorized product are identical or similar products; and (3) comparing the design patent and the alleged infringing product, determining whether they are identical or similar.
In determining whether an identical or similar design is constituted, the governing principles should be overall observation and comprehensive determination. The subject effecting the determination should be deemed to be an average consumer of the product incorporating the design and the criterion for the determination should be whether the overall visual effect of the designs of the products are identical or similar. That is to say, the determination is to be rendered after an observation of all of the design features of the visible portion of the patented design and the alleged infringing design, and a comprehensive consideration of all of the factors that affect the overall visual effect of the product designs.
During a specific comparison, the comparison should, in general, be between the alleged infringing product and the drawings or photographs in the documents for the granted design patent. Where the alleged infringing product cannot be presented, a comparison between an image of the alleged infringing product and the drawings or photographs in the granted design patent may be carried out instead.
This process usually presents the greatest difficulty in an infringement comparison and determination, often requiring the rights holder to rely on a professional lawyer to achieve an accurate conclusion that adheres closely to the mainstream views in current judicial practice.
Shi Yakai is an attorney-at-law at Sanyou Intellectual Property Agency