SPC IP Tribunal hearing a boon for future disputes

On 5 December 2019, the IP Tribunal of the Supreme People’s Court (SPC) handed down two decisions in which, in a first for China, the court heard and decided on both the patent validity and infringement disputes in one consolidated proceeding.

The two actions arose out of a patent infringement dispute between the plaintiff, Xiamen Power Electronic Technology (Power Electronics), and the defendant, LG Electronics (Tianjin) Appliances (LG Electronics). Power Electronics owns CN Patent No. 201220203855.0 (the ’855 patent), which is related to the structure of an over-temperature protection circuit.

Power Electronics brought a lawsuit against LG Electronics for infringement of the ’855 patent before the Hangzhou Intermediate Court (trial court). In response, LG Electronics initiated an invalidation action before the Patent Re-examination Board (PRB), challenging the validity of the ’855 patent.

The trial court made a non-infringement ruling and Power Electronics appealed before the SPC IP Tribunal. Meanwhile, LG Electronics disagreed with the PRB’s decision that affirmed the validity of the ’855 patent issued, first appealing before the Beijing IP Court, where it lost, and then before the SPC IP Tribunal. The SPC IP Tribunal decided to hold a joint hearing, as LG Electronics alleged that Power Electronics made different claim interpretations in the infringement and invalidation proceedings, respectively.

This case is representative of China’s recent efforts to reduce discrepancies resulting from China’s bifurcated infringement and invalidation proceedings. Similar to the German system, infringement and invalidation are addressed in two separate proceedings, i.e., Chinese courts rule on infringement and the PRB, under the national patent office, reviews invalidation contentions. Consequently, the court hearing the infringement case cannot review and make decisions on the validity of the asserted patent in its proceedings.

In the past, the courts that heard infringements and appeals of the PRB’s invalidation decisions were often not the same. In addition, the timelines of these often-parallel proceedings were not synchronized. As a result, there could be situations where a patent was found infringed, and yet subsequently invalidated after years of lengthy trials, significant efforts and wasted judicial resources.