China’s Supreme Court Releases Report and Typical Cases on Malicious IP Litigation
Published 22 November 2025
Yu Du
On 20 November 2025, the Intellectual Property Tribunal of the Supreme People’s Court of China (SPC) released a report on its work in strengthening integrity and curbing malicious intellectual property (IP) litigation, together with five typical cases. Set against the policy background of promoting a culture of honesty, and implementing the SPC’s Opinions on providing high-quality judicial safeguards for scientific and technological innovation, this release aims to clarify how courts identify and sanction malicious IP lawsuits while protecting good-faith enforcement and a healthy innovation environment.
The report stresses that IP rights and litigation are designed to serve as a shield for genuine rights protection, not a spear to disrupt competitors, distort market order, or interfere with capital-market activities. Through concrete cases, the SPC IP Tribunal refines standards on what counts as malicious litigation, how damages should be measured, and where the boundary lies between legitimate rights protection and abuse of procedure.
Dashcam Patent Case - (2023) SPC IP Civil Final No. 869
In the dashcam case, a company that had designed patents while manufacturing for an OEM client later transferred these patents to an affiliate and used them to bring eighteen infringement suits against the client’s new OEM supplier. Several patents were invalidated, and the remaining ones were found to be usable by the new OEM based on the parties’ prior arrangements. Despite this, the patent owner repeatedly sued, obtained property preservation and caused the OEM to decline purchase orders from its client out of legal risk concerns. The SPC held that this pattern showed a clear intent to use the court process to attack a competitor. It recognized not only litigation costs and interest on frozen assets, but also reasonable lost expected profits from refused orders, and ordered full compensation up to the amount claimed.
Target-Type Flowmeter Case - (2022) SPC IP Civil Final No. 1861
In the target-type flowmeter case, a patentee’s utility model had lapsed for non-payment of fees, and it had withdrawn an administrative challenge to that lapse, confirming the termination of its right. Years after winning an earlier infringement suit, the same patentee brought further high-value lawsuits and applied for large-scale property preservation, despite knowing the patent no longer existed. The SPC found that the patentee knowingly sued without a rights basis, sought inflated damages, and caused real harm to the defendant’s operations. This was identified as malicious litigation, and the court emphasized that checking whether a right exists, how stable it is, and whether it can reasonably support the claim size is the logical first step in assessing abuse.
Guide Rail Case - (2022) SPC IP Civil Final No. 2586
In the guide rail case, a patent owner sent drawings containing the complete patented technical solution to a factory, asked it to produce samples and indicated it would purchase them, then turned around and sued that same factory and its investor for patent infringement. During the lawsuit it also sent warning letters to the factory’s customers, alleging infringement and advising them not to buy the products. The infringement action eventually failed because the acts were authorized by the patentee itself. In the subsequent malicious-litigation suit, the SPC held that inducing another party to “infringe” by providing the technical solution, and then using that induced conduct as litigation leverage and commercial pressure, went far beyond legitimate rights protection. On this basis, the patentee was found to have engaged in malicious litigation and ordered to compensate the factory and its investor.
Mixing Device Case - (2023) SPC IP Civil Final No. 2044
In the mixing device case, a company sued a competitor for patent infringement and claimed a very large amount of damages right in the middle of the competitor’s listing process, forcing the latter to suspend its IPO review due to disclosure obligations. Before suing, the patentee had obtained a patent evaluation report with a negative conclusion on patentability but did not disclose it to the court. The SPC noted the unstable rights basis, the concealment of adverse information, the relatively easy nature of the infringement assessment, the strikingly high damages claim, and the sensitive timing of the suit. Taken together, these factors showed that the purpose was to delay the listing and harm the competitor’s interests, not to vindicate IP rights. The court confirmed malicious litigation, ordered compensation of reasonable costs, and required a public statement to eliminate adverse market impact.
Luo Han Guo Extract Case - (2021) SPC IP Civil Final No. 1353
In the Luo Han Guo extract case, a company preparing a rights issue was sued for patent infringement and reported to the securities regulator by the patentee, causing a temporary suspension of the review. The patentee later withdrew the suit after its evidence application was refused. The alleged infringer then sued for a declaration of malicious litigation. The SPC, however, held that it was difficult to conclude that the original infringement suit clearly lacked a rights or factual basis, or that the patentee had obvious malicious intent. The report to the regulator was based on real litigation events and did not fabricate facts, and withdrawing a case was treated as a legitimate exercise of disposition over the right to sue. This case was used to illustrate that not every unsuccessful or withdrawn lawsuit, even if it has market impact, constitutes malicious litigation.
Comment
These materials from the SPC IP Tribunal together mark an important consolidation of China’s approach to malicious IP litigation. On the one hand, the court sends a strong deterrent signal: repeated suits without a valid right, induced “infringement” used as a trap, strategic suits timed to block listings, and inflated claims built on unstable rights will be treated as abuses of process, and victims can claim full compensation, including reasonable lost opportunities and expected profits. On the other hand, by articulating a clear four-element test - clear lack of rights or factual basis, knowledge, damage, and causation - and by showcasing a case where “malice” was not found, the Tribunal also reassures good-faith IP owners that ordinary litigation risk, including losing or withdrawing a case, will not by itself expose them to liability. By strengthening integrity standards while maintaining judicial restraint, the SPC seeks to foster a more predictable, honest, and innovation-friendly legal environment for technology and business in China.
The report stresses that IP rights and litigation are designed to serve as a shield for genuine rights protection, not a spear to disrupt competitors, distort market order, or interfere with capital-market activities. Through concrete cases, the SPC IP Tribunal refines standards on what counts as malicious litigation, how damages should be measured, and where the boundary lies between legitimate rights protection and abuse of procedure.
Dashcam Patent Case - (2023) SPC IP Civil Final No. 869
In the dashcam case, a company that had designed patents while manufacturing for an OEM client later transferred these patents to an affiliate and used them to bring eighteen infringement suits against the client’s new OEM supplier. Several patents were invalidated, and the remaining ones were found to be usable by the new OEM based on the parties’ prior arrangements. Despite this, the patent owner repeatedly sued, obtained property preservation and caused the OEM to decline purchase orders from its client out of legal risk concerns. The SPC held that this pattern showed a clear intent to use the court process to attack a competitor. It recognized not only litigation costs and interest on frozen assets, but also reasonable lost expected profits from refused orders, and ordered full compensation up to the amount claimed.
Target-Type Flowmeter Case - (2022) SPC IP Civil Final No. 1861
In the target-type flowmeter case, a patentee’s utility model had lapsed for non-payment of fees, and it had withdrawn an administrative challenge to that lapse, confirming the termination of its right. Years after winning an earlier infringement suit, the same patentee brought further high-value lawsuits and applied for large-scale property preservation, despite knowing the patent no longer existed. The SPC found that the patentee knowingly sued without a rights basis, sought inflated damages, and caused real harm to the defendant’s operations. This was identified as malicious litigation, and the court emphasized that checking whether a right exists, how stable it is, and whether it can reasonably support the claim size is the logical first step in assessing abuse.
Guide Rail Case - (2022) SPC IP Civil Final No. 2586
In the guide rail case, a patent owner sent drawings containing the complete patented technical solution to a factory, asked it to produce samples and indicated it would purchase them, then turned around and sued that same factory and its investor for patent infringement. During the lawsuit it also sent warning letters to the factory’s customers, alleging infringement and advising them not to buy the products. The infringement action eventually failed because the acts were authorized by the patentee itself. In the subsequent malicious-litigation suit, the SPC held that inducing another party to “infringe” by providing the technical solution, and then using that induced conduct as litigation leverage and commercial pressure, went far beyond legitimate rights protection. On this basis, the patentee was found to have engaged in malicious litigation and ordered to compensate the factory and its investor.
Mixing Device Case - (2023) SPC IP Civil Final No. 2044
In the mixing device case, a company sued a competitor for patent infringement and claimed a very large amount of damages right in the middle of the competitor’s listing process, forcing the latter to suspend its IPO review due to disclosure obligations. Before suing, the patentee had obtained a patent evaluation report with a negative conclusion on patentability but did not disclose it to the court. The SPC noted the unstable rights basis, the concealment of adverse information, the relatively easy nature of the infringement assessment, the strikingly high damages claim, and the sensitive timing of the suit. Taken together, these factors showed that the purpose was to delay the listing and harm the competitor’s interests, not to vindicate IP rights. The court confirmed malicious litigation, ordered compensation of reasonable costs, and required a public statement to eliminate adverse market impact.
Luo Han Guo Extract Case - (2021) SPC IP Civil Final No. 1353
In the Luo Han Guo extract case, a company preparing a rights issue was sued for patent infringement and reported to the securities regulator by the patentee, causing a temporary suspension of the review. The patentee later withdrew the suit after its evidence application was refused. The alleged infringer then sued for a declaration of malicious litigation. The SPC, however, held that it was difficult to conclude that the original infringement suit clearly lacked a rights or factual basis, or that the patentee had obvious malicious intent. The report to the regulator was based on real litigation events and did not fabricate facts, and withdrawing a case was treated as a legitimate exercise of disposition over the right to sue. This case was used to illustrate that not every unsuccessful or withdrawn lawsuit, even if it has market impact, constitutes malicious litigation.
Comment
These materials from the SPC IP Tribunal together mark an important consolidation of China’s approach to malicious IP litigation. On the one hand, the court sends a strong deterrent signal: repeated suits without a valid right, induced “infringement” used as a trap, strategic suits timed to block listings, and inflated claims built on unstable rights will be treated as abuses of process, and victims can claim full compensation, including reasonable lost opportunities and expected profits. On the other hand, by articulating a clear four-element test - clear lack of rights or factual basis, knowledge, damage, and causation - and by showcasing a case where “malice” was not found, the Tribunal also reassures good-faith IP owners that ordinary litigation risk, including losing or withdrawing a case, will not by itself expose them to liability. By strengthening integrity standards while maintaining judicial restraint, the SPC seeks to foster a more predictable, honest, and innovation-friendly legal environment for technology and business in China.