Post on 18-Dec-2015
THE LATEST DEVELOPMENT IN TRIAL OF IP CASES BY PRC COURTS
—— IP-related anti-monopoly judicial review
DING WENLIAN
Shanghai High People’s Court
A Few Important Changes in Trial of IP Cases
Patent Cases: more consideration is now given
to patent claims
Trade Mark Cases: taking a more and more
strict approach in prohibiting trademark confusion
Copyright Cases: be more concerned about
the new issues arising out of new technologies and
new business models
Another Equaling Important Change
IP-related anti-monopoly dispute is an
emerging and growing issue in PRC
courts.
Three Cases
Dexian v. Sony
Jingdiao v. Naikai
Huawei v. InterDigital
Dexian v. Sony
Does the
defendant’
s act
constitute
illegal tie-
in sale?
the court adopted the test in the anti-monopoly
law about the legality check on tie-in sale:
even if the defendants successfully realized tie-in sale
between the digital devices and batteries through their
patent and technology secret, such tie-in sale cannot
be further reviewed for its legality unless the
defendant has dominance in the relevant market
Dexian v. Sony
Jingdiao v. Naikai
Does the
defendant’
s act
constitute
infringeme
nt of
copyright
?
a carving software named “JD-paint”
a digital control system
A carving machine
Jingdiao v. Naikai
work flow
running the JD-Paint program to make a design• creating a Eng
format file
reading the Eng format file• turning it into
machine instructions
receiving the machine instructions• executing the
machine instructions (carving)
If such technical measure is protected by court, then the plaintiff’s benefits associated with its software copyright will be inappropriately expanded to cover its machines, and hence such protection would exceed the boundaries of software copyright. Therefore, the technical measure taken by the plaintiff is different from the technical measures as protected under the copyright law, and the defendant’s decoding accordingly does not constitute copyright infringement.
Jingdiao v. Naikai
from copyright law perspective: whether the defendant’s developing its own software for decoding the Eng format files is within the contral of the plaintiff’s software copyright;
from competition law perspective: whether the plaintiff’s technical measure, if protected by the court, will restrict free competition in the carving machine market.
Jingdiao v. Naikai
Huawei v. InterDigital
The plaintiff accused that:
1) high pricing and discriminatory pricing;
2) unreasonable trading condition;
3) tie-in sale;
4) denial of transaction.
The court held that each of the standard
essential patents as owned by the defendant is
unique and irreplaceable, and hence the license
market for each standard essential patent
constitutes an independent relevant market. The
relevant product market in this case is actually a
cluster of all relevant markets of patent licenses.
The Definition of Relevant Market
Dominant Position
The defendant has full market share in each of
these standard essential patent license markets,
and is capable of impeding or influencing
access to the relevant market by other business
operators. The court therefore recognized that
the defendant has dominant position in the
relevant market.
Determining the Defendant’s Act
High pricing: the royalty fee for the plaintiff charged by the defendant is much higher than those for Samsung and Apple, and in addition to that, the defendant also required the plaintiff to license all of its patents to the defendant for free
Tie-in sale: bundling licenses of essential patents and non-essential ones
license of patents package including 3G standard
essential patents, 4G ones, and its globally-owned
patents, such practice is widely accepted in the market
and hence does not constitute tie-in sale under market
dominance abusing.
the lawsuits brought by the defendant in the US do not
constitute denial of transaction.
Determining the Defendant’s Act
Judgement
the court ruled that the defendant
immediately cease its inappropriately high and
discriminative pricing targeting the plaintiff, as
well as its tie-in sale of bundling licenses of
essential patents and non-essential ones, and
compensate the plaintiff 20 million Yuan for its
losses, while the remaining claims be rejected.
Attempts in This Trial
on the issue of relevant market definition, the court defined the license market for each standard essential patent as one independent relevant market based on the irreplaceability of such patent;
on whether the royalty fee for the plaintiff is inappropriately high and discriminative, the court made a reference to the obligation of equality, reasonableness and non-discrimination as required by the European Telecommunications Standards Institute (ETSI) to which both parties are members, and also made a comparison between the terms and conditions on the defendant’s license of its patents to the plaintiff and those for Samsung and Apple, and considered the inequality in patent cross-licensing between the two parties.
Inspirations of the Three Cases
two perspectives
to clarify the boundaries between justifiable exercise of IP rights and restriction on competition (to protect free competition in technologies)
to build the analytical framework
THANK YOU
FOR YOUR PATIENCE!
DING WENLIAN
Shanghai High People’s Court