The SPC Held It Is Inappropriate To Support The Plaintiff’s Claim For Reasonable Expenses From The Defendant In A Lawsuit To Confirm Non- Infringement
The Supreme People's Court of China(the SPC)held that in the lawsuit to confirm non-infringement of patent rights, it is inappropriate to support the claim of the warned person or interested party to request the right holder to compensate for reasonable expenses such as attorney fees and other reasonable expenses.
First of all, judging from the provisions of current laws and judicial interpretations, there are no special provisions supporting reasonable expenses such as attorney fees for plaintiffs in disputes over confirmation of non-infringement of patent rights.
Reasonable expenses are indirect losses suffered by the rights holder in order to maintain the market value of intellectual property, conduct investigations and evidence collection, and stop infringement. It is a special system design in compensation for intellectual property infringement, which embodies the policy of strict intellectual property protection and the principle of comprehensive compensation. It is of great value in sanctioning infringements and remedial rights. According to Article 71 of the Patent Law and relevant judicial interpretations, the amount of compensation for patent infringement shall include the reasonable expenses paid by the right holder to stop the infringement. If the right holder claims that it paid reasonable expenses to stop the infringement, the amount of compensation may be calculated separately from the amount of compensation determined in Article 65 of the Patent Law.
However, claiming compensation for reasonable expenses in disputes over confirmation of non-infringement of patent rights does not meet the statutory application conditions. The scope of application of the above provisions is limited to disputes about patent infringement and does not extend to disputes over confirmation of non-infringement of patent rights. Therefore, there is no legal basis for the plaintiff and defendant to compensate for their reasonable expenses including attorney fees.
Secondly, judging from the specific disputes involved in the lawsuit to confirm non-infringement of patent rights, there is no basis for the transfer of attorney fees. Disputes over confirmation of non-infringement of patent rights are remedial actions to protect the warned or interested parties from the uncertainty of whether the patent rights of others have been infringed. They are classified as civil negative confirmation actions and generally do not involve damages assumption of responsibility. Unless there is evidence proving that the patentee has abused its rights or engaged in unfair competition behaviors such as commercial defamation, it is usually difficult to determine the subjective liability of the patentee.
In this case, the dispute between the two parties is whether the issued products manufactured and sold by the plaintiff infringes upon the defendant’s patent rights. The dispute is whether the plaintiff has infringed the patent of the defendant. The plaintiff has not claimed that the defendant has abused its rights in this case, unfair competition and other acts, and in the absence of a dispute over damages compensation, there is no basis for a separate trial of the dispute over the transfer of attorney fees in this case.
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Moreover, the plaintiff’s hiring of a lawyer in the dispute over confirmation of non-infringement of patent rights is a civil act that the plaintiff actively chooses based on its own circumstances, and there is no necessary causal relationship between the plaintiff’s behavior and the defendant’s behavior. In the absence of special provisions of the law, the constituent elements of damages are not established.
Third, the judgment of patent infringement is highly professional, and it is not appropriate to impose strict restrictions on the way in which patent rights are exercised or to order the right holder to bear liability without a clear legal basis. Implementing strict intellectual property protection requires a fair, convenient and efficient rights protection mechanism to protect the rights and interests of patentees and stimulate their innovation and creativity. Infringement warning letters are a relatively simple, effective, and widely used way to protect patent rights. Making the patentee bear adverse consequences just because of the issuance of an infringement warning letter lacks legal basis and is not conducive to the protection of patent rights. Therefore, the patentee should not be liable for compensation solely for its act of sending an infringement warning.
Of course, it needs to be pointed out that the patentee also has the necessary duty of prudence and attention when issuing infringement warnings, so that its actions comply with the requirements of legality and legitimacy, follow the principles of good faith and non-abuse of rights, and prevent the legitimate exercise of the rights of the warned or interested parties and the normal business order.
Finally, if the patentee abuses its rights, engages in unfair competition and other behaviors that cause damage to the rights and interests of the warned person or interested parties, the injured party may separately claim damages in accordance with the provisions of the Anti-Unfair Competition Law and its judicial interpretations.
In this case, the SPC clarified that the reasonable expense counter-compensation system does not apply the lawsuit to confirm non-infringement of patent rights. It also specified that if the patentee abuses rights or unfairly competes and causes damage to the rights and interests of the warned person or interested parties, the relief channels for damages are of reference significance for the trial of such disputes.