What does the manufacture of an identical product in prior user rights mean?

By Jiang Fengtao and Yang Cunji, Hengdu Law Offices
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Patent prior user rights are provided under article 69 of the Patent Law. Pursuant to this provision, it is not deemed to be patent infringement when a party had manufactured an identical product prior to the patent filing date and whose manufacture of that product continues, but only within the original scope. From this it can be seen that it is crucially important to clarify what constitutes the manufacture of an identical product.

Identical product

“Identical” here should mean that the product manufactured prior to the filing date is identical to the patent, not that the priorly manufactured product is identical to the product whose patent is allegedly being infringed. In other words, consideration need only be given as to whether the prior act is the act of manufacturing the patented product; the relationship between the prior manufactured product and the alleged infringing product can be ignored.

Jiang Fengtao Managing Partner Hengdu Law Offices
Jiang Fengtao
Managing Partner
Hengdu Law Offices

First, the prior user defence should consider the relationship between the patented technology and the prior use technology, using the specific right to use the prior technology to counter the restrictions imposed by the patented technology. Secondly, when assessing patent infringement, the prior manufacturer should be restricted only within the patent’s scope of protection. The method of determining through assessment whether the patented technology and the prior use technology are identical is conducive to avoiding the prior manufacturer being subject to restrictions outside the patent’s scope of protection. Lastly, outside the patent’s scope of protection, the prior manufacturer should not be restricted by its own history and should be free to develop as it wishes.

The prior user rights defence involves three technologies or products, namely technology X of the claims, priorly manufactured product Y and product allegedly being infringed upon Z. To facilitate this narrative, the technology’s or product’s technical properties will be used as a description. It can be granted that the technology in the claims is X=a+b, the priorly manufactured product is Y=a+b+c and the alleged infringing product is Z=a+b+d. It can be derived from the above discussion of “identical” that whether c and d are identical will not affect the assessment of “manufacture of an identical product”.

Manufacturing

Manufacturing a product is a process by which a product is fabricated from nothing; it excludes the process by which a product’s functional purpose is exerted post fabrication. In other words, making use of a product’s functional purpose is the “use”, not the “manufacture”, of a product. The act of manufacturing a patented product therefore should refer to the fabrication process by which a product goes from lacking, or possessing only part of, the patented technical features to possessing all of those technical features.

Although another product formed by adding further technical features to a product that possesses all of the patented technical features also falls within a patent’s scope of protection, the fabrication process of the other product is no longer a process of manufacturing the patented product. Rather, it is a process of using the patented product. As set out in relevant judicial interpretations, the court should find the use of an infringing product as a part or component in manufacturing of another product to be an act of use as specified in article 11 of the Patent Law.

Different scenarios

The following scenarios are based on the above analysis and pertain to where “manufacture of an identical product” is applied.

Scenario 1. Product Y’s fabrication process is a+b+c; product Z’s fabrication process is a+b+d. In this situation, the two fabrication processes are both the manufacturing process of product X. This satisfies the conditions for both prior and continued manufacture of an identical product.

Scenario 2. Product Y’s fabrication process is (a+b)+c; product Z’s fabrication process is a+b+d. The parentheses here indicate that the formation of the multiple technical features within the parentheses has been completed. In this situation, product Y’s fabrication process is a process of using product X, not the manufacturing process of product X. Further, product Z’s fabrication process is the manufacturing process of product X. This fails to satisfy the conditions for the prior manufacturing of an identical product and renders the prior use defence inapplicable.

Scenario 3. Product Y’s fabrication process is a+b+c; Product Z’s fabrication process is (a+b)+d. In this situation, product Y’s fabrication process is product X’s manufacturing process, but product Z’s fabrication process is product X’s process of utilization and not its manufacturing process. This satisfies the conditions for the prior manufacturing of an identical product but fails to satisfy the conditions for the continued manufacture of an identical product. In this situation, some may be of the opinion that since the alleged infringer (prior user rights holder) that priorly had manufactured product X is permitted to continue manufacturing product X, it should also be permitted to continue using product X.

Yang Cunji Associate Hengdu Law Offices
Yang Cunji
Associate
Hengdu Law Offices

In this regard, it can first be seen that the legislators’ intent was to limit subsequent working to manufacturing given that the law states “continue to manufacture within the original scope” not “continue to work within the original scope”. Second, that this arises usually due to the prior user rights holder considering that having a third party provide parts and components would be more economical and attempting to achieve this through a transfer of its prior user rights. However, competent judicial interpretations take a negative attitude toward prior user rights transfer. Last, if a prior user rights holder is permitted to secure the use of the patented product through the illegal manufacture of that product by a third party rather than through its own continued manufacture, this would undoubtedly allow the prior user rights holder to encourage others to manufacture infringing products.

Scenario 4. Product Y’s fabrication process is (a+b)+c; product Z’s fabrication process is (a+b)+d. In this situation, neither of the products’ fabrication processes is product X’s manufacturing process. This satisfies none of the conditions for prior manufacturing of an identical product or continued manufacture.

In sum, the prior user defence of manufacture of an identical product refers to whether the prior act is the act of manufacturing the patented product. When using the prior user defence, it is imperative to strictly distinguish the difference between the act of “manufacturing” and the act of “use”.

Jiang Fengtao is the managing partner and Yang Cunji is an associate of Hengdu Law Offices

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