If the patentee proactively provides and intends for the accused infringer to implement their patented technical solution without disclosing their patent, and only requests infringement remedies after the accused infringer has completed implementation, the accused infringer's claim of having obtained an implied license from the patentee may be supported by the court.
In the appeal case between Appellant a Jiangsu Company and Appellees Xiamen A Company and Xiamen B Company, with a Hebei Company being Defendant in the original trial, and a C Company being Third Party in the original trial, the involved patent is an invention patent for a fence system (hereinafter referred to as the patent in question) owned by the Jiangsu Company.
The Jiangsu Company believed that technical solution used in the anti-climbing fence installed in a construction project in Fujian Province (hereinafter referred to as the project in question) falls within the protection scope of the patent in question, and that Xiamen A Company and Xiamen B Company, which are respectively the delegated construction agency and the construction unit of the project, infringed upon the patent held by the Jiangsu Company and should bear corresponding liability for infringement. The Jiangsu Company filed a lawsuit with the court of the first instance, requesting an order for Xiamen A Company and Xiamen B Company to cease infringement and compensate for its economic losses (including reasonable enforcement expenses).
The court of the first instance deemed the actions of the Jiangsu Company as its license for the use of the patent in question in the project and ruled to dismiss the lawsuit.
The Jiangsu Company was dissatisfied and appealed to the Supreme People's Court, arguing that their action of providing design drawings to the project design unit, C Company, should be considered as a commercial promotion activity recommending the patent in question, rather than offering a patent license.
The Supreme People's Court, in the second instance, held that according to Article 11 of the Patent Law, “after the grant of the patent for an invention or an utility model, except where otherwise provided for in this Law, no entity or individual may, without the authorization of the patentee, exploit the patentee’s patent, that is, for production or business purposes, manufacture, use, offer to sell, sell or import the patented product, or use the patented process, and use, offer to sell, sell or import the product directly obtained by the patented process.”
The key to determining patent infringement lies in whether the implementation of a patent has obtained license from the patentee. If the act conductor obtained an explicit license from the patentee, their act of implementing the patent naturally does not belong to patent infringement as prescribed by Article 11 of the Patent Law. If the act conductor implements the patent without an explicit license from the patentee, but, considering the specific case circumstances and the actions of the patentee, it can be inferred that the patentee has expressed their intention for implied license, the act conductor implementing the patent can be deemed non-infringing.
In this case, firstly, the Jiangsu Company provided the design drawings after the signing of the design contract between C Company and the project owner from Fujian Province. Additionally, the content of the relevant drawings clearly referred to the project in question, indicating that the Jiangsu Company was well aware that the design scheme offered to C Company would be used for the project in question.
Secondly, from February to October 2015, the Jiangsu Company continuously communicated with C Company regarding the designs of the project in question. During this period, the Jiangsu Company modified the design scheme based on the requests of C Company and finalized design drawings that clearly indicates technical requirements such as dimensions, material specifications, and style parameters for the anti-climbing fence. Thus, it can be confirmed that the Jiangsu Company, as the right holder, was deeply involved in the design work of the project in question.
Furthermore, upon investigation, it was found that the design scheme for the anti-climbing fence in the construction drawings of the project in question corresponds to the content sent by the Jiangsu Company to C Company via emails, which could be identified to be the patented technical solution in question. Moreover, both the delegated construction agency contract and the construction contract explicitly stipulate that this design scheme cannot be changed arbitrarily, so strict adherence to these contracts by Xiamen A Company and Xiamen B Company would inevitably result in the implementation of the patent in question.
Lastly, the Jiangsu Company, with full awareness that the specific unit in Fujian Province was both the project owner and user, chose not disclose the relevant patent information to this unit, Xiamen A Company, or Xiamen B Company. This deliberate concealment of these crucial facts deprived the specific unit in Fujian Province of opportunity to request for modifications to the design scheme from C Company before construction or to negotiate design fees. As a result, the patented technical solution included in the design drawings became an irreplaceable scheme of the project. It was not until approximately six months before the project completion that the Jiangsu Company sent a notification letter regarding the patent, seeking royalties. Such conducts contradict the principle of good faith and are highly likely to cause disputes.
Based on the above, considering that the patentee the Jiangsu Company was well aware that its design scheme was intended for the project in question and actively participated in the design work, and the project in question was constructed strictly following the drawings, it should be determined that the Jiangsu Company has given an implied license to the implementation of the patent in question by the relevant entities involved in the project. The claims made by the Jiangsu Company that Xiamen A Company, as the delegated construction agency, and Xiamen B Company, as the construction unit, infringed upon the patent in question lacks factual and legal basis.
The Supreme People's Court, on December 15, 2022, ruled to dismiss the appeal and uphold the original verdict.
(2022) Zui Gao Fa Zhi Min Zhong No. 139
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