The declaratory judgment of non-infringement is a relatively new type of case that has emerged in the field of intellectual property in recent years. Declaratory judgment of non-infringement allows the alleged infringer to file a lawsuit, which effectively prevents the intellectual property right holder from abusing it/his rights, helps to end the uncertainty of the legal status as soon as possible, and better balances the conflict of interests between the intellectual property right holder and the alleged infringer.
In September 2000, Nanjing Intermediate People’s Court accepted the first case of a declaratory judgment of non-infringement in China, namely, Suzhou Longbao Bio-engineering Industrial Co., Ltd v. Suzhou Langlifu Health Products Co., Ltd. As it was the first case of declaratory judgment of non-infringement in China, the Nanjing Intermediate People’s Court reported the case to the Supreme People’s Court for instructions, and in 2001, the Jiangsu High Court submitted a report to the Supreme People’s Court for instructions on the case. In July 2002, the Supreme People’s Court made a reply to the case of the declaratory judgment of non-infringement of the patent right, the Reply stated that according to Article 108 and Article 111 of the Civil Procedure Law of the People’s Republic of China, the People’s Courts shall accept lawsuits that fulfill the conditions. In this case, the plaintiff to the people’s court for litigation, only for the defendant to send a letter alleging infringement and request the court to confirm its non-infringement and does not claim that the defendant’s behavior infringed its right. To confirm “non-infringement of patent right” as the cause more directly reflects the essence of the dispute filed by the plaintiff.
After the Supreme Court’s approval, other courts have accepted several declaratory judgments of non-infringement cases. In 2003, the Beijing No. 1 Intermediate People’s Court accepted the first declaratory judgment of non-infringement of trademark, in China Social Science Press v. Federico Vaughan Limited - where the defendant, China Social Science Press requested a declaratory judgment of non-infringement for its publication of the “Peter” rabbit series of books, it considered its publication of the “Peter” rabbit series of books did not infringe the defendant’s trademark. In the same year, the Beijing Second Intermediate People’s Court accepted the first declaratory judgment of non-infringement of a copyright case, in State Oceanic Administration v. Zhou Xiaopu and other 31 people. With the increase of cases of declaratory judgment of non-infringement, in 2008, the Supreme People’s Court for the first time stipulated and clarified the declaratory judgment of non-infringement claim as a type of dispute in the Provisions on the Causes of Action for Civil Cases, and at the same time, according to the differences in rights, further subdividing the dispute into the declaratory judgment of non-infringement of patents, the declaratory judgment of non-infringement of trademarks, the declaratory judgment of non-infringement of copyrights, the declaratory judgment of non-infringement of plant variety rights, the declaratory judgment of non-infringement of exclusive rights to use the layout designs of integrated circuits, and the declaratory judgment of non-infringement of computer software.
The following is an introduction and summary of the declaratory judgments of non-infringement cases to further understand the current development of declaratory judgments of non-infringement claims in China:
1. The declaratory judgment of non-infringement of patents
In judicial practice, most of the declaratory judgment of non-infringement involves patents. In the declaratory judgment of non-infringement of invention or utility model patent, the People’s Court requires the patentee to specify the specific claims claimed by the infringement warning; if the patentee claims more than one claim, the People’s Court, in principle, needs to examine whether the technical solutions implemented by the plaintiff fall within the scope of protection of each claim. The plaintiff requests declaratory judgment of non-infringement of the patent right in question on the ground of implementation of the prior art, the people’s court needs to examine whether the technical solution in dispute belongs to the prior art.
Basic facts of the case
In the case of Appellant Liu Mou and Appellees Cixi Plastic Products Company and Huang Mou on the declaratory judgment of non-infringement of the patent, involving Patent No. 201620853180.2, the name of “a mop bucket for flat mop squeezing and cleaning” (hereinafter referred to as the patent in question), the patentee is Cixi Plastic Products Company.
On 26 November 2018, Cixi Plastic Products Company announced to the industry peers, requiring they immediately remove infringing products, otherwise, they would be liable in tort. Liu Mou designed “a mop with a bucket extruded horizontal plate” product which belongs to this type of product related to the patent in question, its relevant cooperation units know infringement of the announcement published by Cixi Plastic Products Company and required Liu Mou to confirm that its products do not constitute an infringement of the patent in question, before agreeing to carry out further cooperation.
After Liu repeatedly communicated with Cixi Plastic Products Company without success, he filed a lawsuit with the Ningbo Intermediate People’s Court (hereinafter referred to as the Court of First Instance), requesting to confirm that his products did not infringe the patent in question. Cixi Plastic Products Company in the first instance makes clear that the product falls within the scope of protection of the patent claims 1, 2, 3, 4, 7, 18.
The court of first instance only determined whether the product in question fell within the scope of protection of claim 1 of the patent in question and did not determine whether the disputed product claimed by the right holder fell within the scope of protection of claims 2, 3, 4, 7 and 18 of the patent in question. At the same time, the court of first instance found that Liu’s claim that the product in question used prior art could not be established, so the judgment rejected Liu’s claim.
Liu was not convinced and appealed to the Supreme People’s Court. In the second instance proceedings, the patent in question was filed by an outsider with a request for invalidation, and Cixi Plastic Products Company modified the claims by adding the additional technical features of claims 7 and 15 in the authorized text as well as some of the additional technical features of claim 18 to claim 1, deleting the original claims 4-6, 8, and 9, and adaptively adjusting the numbering of the claims.
The Supreme People’s Court ruled on 28 September 2021 that the appeal was dismissed and upheld.
Opinions of the judges
The Supreme People’s Court held in the second instance that in cases of the declaratory judgment of non-infringement of invention or utility model patents, the People’s Court should also require the right holder to specify the claims it asserts.
The right holder claims more than one claim, in principle, can first examine whether the disputed product technical program falls within the scope of protection of the claim that the right holder claimed the largest scope of protection; if the examination concludes that the technical solution of the disputed product does not fall within the scope of protection of the claim, then, of course, it does not fall within the scope of protection of the dependent claims invoking the claim.; if the examination concludes that the disputed product technical program falls within the scope of protection of the claim with the largest scope of protection, it is usually necessary to examine whether the disputed product technical program falls within the scope of protection of the other claims asserted by the right holder.
If the parties claim that the disputed product uses prior art, the Court also needs to compare the technical features falling within the scope of protection of the patent right in question with the corresponding technical features in the prior art scheme and decide whether the disputed product uses prior art.
Because claims 1, 2, 3, 4, 7, and 18 asserted by Cixi Plastic Products Company in the first trial were either retained or added to claim 1 except for the deletion of claim 4 in the process of invalidation review of the patent in question, and after adaptive adjustment, they became the modified claims 1, 2, 3 and 11, which were upheld, therefore, whether the disputed product in the second trial constituted the infringement of patent in question, the Court needs to examine whether the technical scheme of the disputed product fell into the scope of protection of the modified claims 1, 2, 3 and 11.
The second trial compared the disputed products with the relevant technical features in the amended claims 1, 2, 3, and 11 of the patents in question, and concluded that the disputed products fell within the scope of protection of the said claims of the patent in question, constituting infringement of the patent in question.
Although the judgment of the first instance omitted to determine whether the disputedproduct technical program falls into the scope of protection of the patent claims in question claimed by Cixi Plastic Products Company in the first instance, but the result of the decision is correct and should be upheld.
Summary
To make a declaratory judgment of non-infringement of patent rights, the court needs to determine whether the plaintiff’s implementation of the technical program falls into the scope of protection of the defendant’s patent rights and whether its purpose is to eliminate the uncertainty of the plaintiff as to whether the technical solution implemented by the plaintiff falls within the scope of protection of the patent rights of others, to facilitate its business decisions. Through the declaratory judgment of non-infringement, the judiciary plays a final effect, helping to stabilize the legal order, in line with the positioning of the leading role of the judicial protection of intellectual property rights, but also line with the patent infringement disputes through the judiciary to deal with the internationally accepted rules.
2. The declaratory judgment of non-infringement of trademarks
Basic facts of the case
On 23 April 2020, Yuan Longping Agricultural Hi-Tech Company Limited (hereinafter referred to as Longping High-Tech) issued a warning letter to Yuanmi Agricultural Science and Technology Company Limited (hereinafter referred to as Yuanmi) and its partner companies, requesting them to immediately stop selling infringing commodities, such as counterfeit “Yuan Longping” rice, and to prohibit the use of “Yuan Longping” name, portrait and trademark for commercial promotion without the legal authorization of Longping High-Tech, and the live broadcasting of Yuanmi’s products has been suspended. Yuanmi replied that it had not infringed upon the trademark and commissioned a law firm to send a letter to Longping High-Tech requesting to withdraw the warning letter or file a lawsuit with the People’s Court as soon as possible to determine the legitimacy of the relevant acts of Yuanmi through the judicial process. Longping High-Tech did not file a trademark infringement lawsuit and did not withdraw the infringement warning. Yuanmi considered that Longping Hi-Tech’s warning letter had affected Yuanmi’s operation, so it filed a declaratory judgment of non-infringement claim, requesting a judgment confirming that Yuanmi had not infringed on Longping Hi-Tech’s trademark right; and ordering Longping Hi-Tech to compensate Yuanmi for the reasonable expenses incurred by Yuanmi in defending its right of infringement in the amount of RMB 94,000.
Longping Hi-Tech argued that Yuan Mi’s commercial use of Yuan Longping’s name and portrait was not lawful and legitimate, that Longping Hi-Tech had already filed an unfair competition lawsuit against the act, and therefore there was no need to confirm non-infringement through litigation, and that Yuanmi should bear the expenses incurred by Yuanmi in defending its rights based on its improper acts.
The court ascertained that the trademark No. 6440904 “Yuan Longping” was registered and owned by Longping Hi-Tech, and the goods authorized for use were tea, tea beverages, sugar, honey, rice, cereal products, noodles, edible starch, spices, edible aromatics in Class 30, and the validity period of the registration was from 14 September 2010 to 13 September 2020, and was renewed. No. 22936422 “Yuan Mi” trademark is registered and owned by Qingdao Yuanze Biotechnology Co., Ltd, the approved use of the goods for use were cereal products, tea, soybean flour, rice, rice-based snacks, boxed rice, rice noodles (strips) in Class 30, the registration is valid from 21 May 2018 to 20 May 2028. The trademark was assigned on 27 December 2019 to Yuanmi. Yuanmi uses its “Yuan Mi” trademark on its rice products. Yuanmi used Yuan Longping’s name and portrait in articles on its website and WeChat public number.
After Longping Hi-Tech issued the infringement warning, it did not file a trademark infringement lawsuit against Yuanmi for the trademark infringement mentioned in the Warning Letter, but filed an unfair competition lawsuit against Yuanmi for the use of Yuan Longping’s name and portrait in the course of its business to the Hunan Changsha Intermediate People’s Court on 29 July 2020, and the Hunan Changsha Intermediate People’s Court issued a judgment of first instance on 26 July 2021, finding that Yuanmi constituted unfair competition and ordering Yuanmi to cease the infringing acts and pay compensation of RMB 100,000 RMB. Yuanmi appealed against the decision and Hunan Higher People’s Court issued a civil judgment of the second instance on 11 March 2022: the appeal was rejected, and the original judgment was upheld.
Opinions of the judges
As to whether Yuanmi has the eligibility conditions for filing a lawsuit to confirm the non-infringement of trademark rights. Referring to Article 18 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Trial of Patent Infringement Disputes, it can be seen that the other party receives a warning of infringement from the right holder, and reminds the right holder in writing to exercise the right to litigation, but the right holder fails to withdraw the warning or file a lawsuit within a reasonable period, which leads to the rights and obligations between the two parties being in a state of uncertainty, and it is a constitutive condition for filing a claim to confirm that it is not infringing on intellectual property rights. Yuanmi, the counterparty involved in the case, received a Warning Letter from Longping Hi-Tech, the trademark right holder, on 23 April 2020, stating that Yuanmi had infringed on Longping Hi-Tech’s exclusive right to use its trademarks and Academician Yuan Longping’s right to his name and portrait, and requesting that it immediately stop the infringement, and the products of Yuanmi involved in the case were therefore suspended from live broadcast sale. Yuanmi subsequently made a written reminder to Longping Hi-Tech on 14 May 2020 and 22 June 2020, respectively, but the right holder Longping Hi-Tech did not withdraw the Warning or file a lawsuit for infringement of trademark rights within a reasonable period, which led to the uncertainty as to whether Yuanmi constituted a trademark infringement on Longping Hi-Tech, and Yuanmi thus possessed the conditions of eligibility for filing a declaratory judgment of non-infringement of the trademark right. The fact that Yuanmi filed a declaratory judgment of non-infringement of trademark right with the court on 2 July 2020, more than two months after Longping Hi-Tech issued the written Warning Letter, has both factual and legal basis and is appropriate.
Whether Yuanmi has the reasonableness and necessity to file a declaratory judgment of non-infringement of trademark right. The purpose of the declaratory judgment of non-infringement of intellectual property rights is to clarify the legal relationship between the parties in the protection of intellectual property rights, to regulate the use of intellectual property rights in business activities, to eliminate the uncertainty of the corresponding legal relationship, and to ensure the stability and order of business activities in the market. This case is a non-infringement of trademark rights, however, on 29 July 2020, Longping Hi-Tech filed an unfair competition lawsuit with the Hunan Changsha Intermediate People’s Court. Although the two cases involved the same use behavior of Yuanmi, the two cases have different legal relationships and legal interests, and the two cases cannot replace each other. Therefore, even if the unfair competition lawsuit has already determined that Yuanmi’s identical use constitutes unfair competition and should be stopped, Yuanmi’s declaratory judgment of non-infringement of trademark rights is still reasonable and necessary.
Whether this case will conflict with the related unfair competition dispute case. Trademark use is only one of the many forms of commercial use, and the fact that Yuanmi’s alleged use did not infringe on Longping Hi-Tech’s trademark right, does not mean that its use did not constitute unfair competition. Although Yuanmi’s alleged use will not be regulated by the trademark law, it may still be regulated by the anti-unfair competition law.
Summary
Compared with traditional trademark infringement litigation, declaratory judgment of non-infringement of trademark rights is a relatively new type of litigation, with the development of the intellectual property rights trade, China attaches more and more importance to the competitiveness of intellectual property rights. In the hearing of the declaratory judgment of non-infringement of trademark rights, it is necessary to combine the institutional purpose of counteracting the abuse of trademark rights, balancing the interests of market players and the characteristics of trademark rights, to adhere to the position that the declaratory judgment of non-infringement of trademark rights is independent of the claim for unfair competition, and provide a comprehensive and balanced safeguard for the effective exercise of the trademark rights and a fair, open, standardized, and orderly business environment for the market players.
3. The declaratory judgment of non-infringement of copyrights
The declaratory judgment of non-infringement of copyrights between Zhejiang Shenghe Network Technology Co., Ltd. and Legend IP Co., Ltd. is the first declaratory judgment of non-infringement of copyrights related to movies and games. The court ruled that, when applied for the audiovisual works to protect the game, the boundaries of its rights should be centered on the evaluation of the “screen”, the scope of copyright protection should be limited to the continuous motion picture itself or a combination as well as to the storyline of the display of the visual effects of the case.
Basic facts of the case
The Korean game “Hot Blooded Legend” was launched in China in 2001, and the right holder, Legend IP Co., Ltd. (hereinafter referred to as Legend IP), after learning that the movie “Blue Moon” would soon be broadcast exclusively on the platform, considering that the movie infringed upon the copyright of the game, and sent a letter to the platform requesting that the distribution of the movie be halted. The movie producer sent a reminder letter to Legendary IP to sue it, but Legendary IP neither withdrew the warning nor sued. After the movie was released, Zhejiang Shenghe Network Technology Co., Ltd, as the copyright owner of the movie, filed a lawsuit to the court on the ground that the movie did not infringe on the copyright of the game, requesting for declaratory judgment of non-infringement of copyrights.
Opinions of the judges
Hangzhou Internet Court held that the overall picture of the game and the composition of the picture and the smoothness of the picture, the camera experience, audio-visual effects in the movie are very different, and for the selection, and the game and the specific elements of the creation in the movie are substantial difference, the judgment confirms that there is no infringement. Legend IP appealed. Zhejiang Hangzhou Intermediate People’s Court rejected the appeal and upheld the original judgment.
Summary
The judgment of this case clarified the idea of comparing the infringement between the overall picture of the game and the movie work and pointed out that if a work created later only refers to and absorbs the theme and idea of the earlier work, but the specific expression has been separated from or is different from that of the earlier work, it does not constitute an infringement. The judgment is conducive to guiding the development and prosperity of multi-industry cultural and creative industries and is conducive to promoting the high-quality integrated development of cultural industries.
Conclusion
The declaratory judgment of non-infringement is aimed at regulating the rights holder’s behavior of sending infringement warnings indiscriminately, maintaining a stable market business order, while giving the warned person/company a judicial remedy, to save him/it from being in a state of uneasiness for a long period due to the rights holder’s negligence in exercising the right of action. When the right holder sends an infringement warning letter for behavior with illegality, unfair competition, increase in the market trader’s business risk, etc., the warned person/company or the interested party can file a declaratory judgment of non-infringement, to reduce the business risk, safeguard their rights. If the behavior of the right holder constitutes unfair competition, the interested party may also demand that the right holder be held liable for compensation in the litigation.