The application of the prior art defence in China

The PRC Courts have a history of adhering to the doctrine that the effect of a registered patent should not, for the purposes of infringement, extend into the area of existing technologies (prior art). Although the notion could be found in judicial interpretations of the Supreme People's Court, it was not until the Third Amendment of the Patent Law (which came into effect in October 2009), that the prior art defence became officially codified into the Patent Law.

Article 62 of the Patent Law provides that it is a defence to patent infringement if the alleged infringing technology or design belongs to the prior art or is a prior design. In December 2009, subsequent to the new law coming into effect, the Supreme People's Court issued the Interpretation of the SPC on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases (the “Interpretation”) which gave further guidance to the application of the prior art defence. Article 14 of the Interpretation provides that

“Where all technical features, which are alleged to fall within the scope of patent protection, are identical to, or are not substantially different, from the corresponding technical features of one existing technical solution, the People's Court shall determine that the technology carried out by the alleged infringer belongs to an existing technology within Article 62 of the Patent Law.”

Nature of the prior art defence

Although the general principle of the prior art defence has never been in dispute, due to the lack of judicial guidance, historically the courts were unable to apply a consistent test. In the past, when the prior art defence was raised during infringement proceedings, the courts were required to make a determination of infringement based upon the comparison of 3 sets of technical features from the patent, the alleged infringing article and an item of prior art. Under the bifurcated patent system in China, different views were formed by the civil courts on the application of the prior art defence vis-à-vis infringement, and on validity, as determined by the Patent Re-examination Board. In particular, there has been concern about the civil courts usurping of the role of Patent Re-examination Board in applying the prior art defence.

Prior art defence and infringement

Previously, there was a view that the prior art defence was only applicable in infringement cases applying the doctrine of equivalents. The purpose of the prior art defence is to limit the ambit of the doctrine of equivalents by removing technical solutions disclosed by prior art from the scope of protection of the patent. This issue was addressed by the “Opinion of the Supreme Court on Several Issues Relating to Sufficient Utilisation of IP Adjudication to Foster Development and Prosperity of Socialist Culture and to Promote Autonomous and Coordinated Economic Development” (the “Opinion”), which confirmed that the prior art defence should be applicable in cases of identical (literal) infringement as well as infringement by way of equivalents.

It seems correct that the prior art defence ought to be applicable independent of the question of infringement because the effect of a prior art must prevail over the asserted patent. In practice, the prior art defence is an important safeguard for manufacturers. If a manufacturer makes an article that is covered by prior art and is differentiated from the prior art only by non-patentable variations, the manufacturer ought to be able to assume that its article does not infringe any later patents, without having to go to the trouble of evaluating the validity and scope of claims of all later patents.

Prior art defence and validity

In the PRC, the question of validity is heard by the Patent Re-examination Board, which is an administrative organisation. Some consider the prior art defence to be an indirect way to invalidate a patent and, therefore, question whether it is appropriate for the civil courts to determine the application of the prior art defence. However, this indicates a misunderstanding of the application of the prior art defence.

First, Article 14 of the Interpretation provides that the subject of comparison in a prior art defence is one existing technical solution. The Opinion clarifies that it is permissible to raise the prior art defence by alleging the obvious combination of one existing technical solution recorded in one comparison document and general common knowledge. The possibility of combining two or more prior arts in a prior art defence is limited. From a defensive point of view, there is still significant value in bringing separate invalidation proceedings with the Patent Re-examination Board, rather than solely relying on the prior art defence in an infringement action.

Secondly, the prior art defence does not require the alleged infringing article to be identical to the prior art. In situations where the alleged infringing article is identical to a prior art and is also identical to a patent, in establishing the prior art defence, in theory, the patent should also be found to be invalid for lack of novelty. However, in practice, the courts will not make such a determination since the question of validity should be determined by the Patent Re-Examination Board. Further, Article 14 merely requires that the technical features of the alleged infringing article to be “not substantially different ” from the corresponding technical features of the existing technical solution. Hence, where the alleged infringing article is an equivalent of the patent, as well as an equivalent of the prior art, the prior art does not necessarily anticipate the patent. For the above reasons, a defence strategy which relies on the prior art defence cannot dispense with the need for filing invalidation proceedings with the Patent Re-examination Board as well.

Applying the prior art defence

In the past, some PRC Courts applied the “relative closeness” test in determining the validity of a prior art defence. This meant that the courts would compare the technical features of an alleged infringing article against the claims of the patent and the corresponding technical features of the technical solution of the prior art. If the alleged infringing article is more within the scope of the patent and is, therefore, more closely disclosed by the patent, the article infringes. However, if the alleged infringing article is more within the scope of the prior art, then it is disclosed by the prior art and the prior art defence is established.

This method of comparison has now been overruled by Article 14 of the Interpretation which states that the prior art defence requires a comparison of the alleged infringing technical features of an accused article and the corresponding technical features of one existing technical solution of a prior art. The determination of the prior art defence does not, in theory, require a comparison of the accused article against the patent. Accordingly, as long as all alleged infringing technical features are found in the technical solution of the prior art, a valid defence is established. In practice, for procedural reasons, the PRC Courts should conduct an analysis comparing the alleged infringing article against the patent as part of the courts' fact finding exercise.

Conclusion

The Supreme People's Court has now clarified doubts about the application of the prior art defence. The defence is of great importance to manufacturers who can be assured that exploitation of an old technical solution will not constitute any infringement of a later patent. The development in the prior art defence will provide a higher level of certainty for patent litigation in China.