Who Can Be the Plaintiff for Bringing a Patent Infringement Lawsuit?

The patentee and relevant interested parties are entitled to initiate a patent infringement lawsuit. These interested parties encompass the patent licensee and the heir of the original patent holder.

Under PRC law, both the patentee and the exclusive licensee possess the independent right to file patent infringement lawsuits in court. The sole licensee is empowered to file a lawsuit jointly with the patentee or independently, provided it can furnish evidence that the patentee has expressly waived legal action or refrained from filing a lawsuit due to awareness of the infringement.

Furthermore, a non-exclusive licensee is authorised to file patent infringement lawsuits in its own name after obtaining explicit authorisation from the patentee. Notably, there is no mandatory requirement for the registration or recording of a licensee to bring legal action. The licensee can substantiate its rights towards the patent by providing the contract with the patentee.

In situations where the licensee can independently file the lawsuit, if the patentee does not consent to being a plaintiff, it shall not be joined as a defendant either.

Who Can File a Nullity/Revocation Action?

Any party or individual who contends that the granting of the patent right does not align with the applicable provisions may petition to the China National Intellectual Property Administration (CNIPA) to declare the patent right invalid.

If any party is unsatisfied with the decision of patent invalidation or adjudication of patent infringement made by the relevant administrative authority, such party is entitled to file administrative litigation against such decision/adjudication.

Defendants Involved in Life Sciences/Pharma Patent Infringement Cases

According to the PRC’s Patent Law, unauthorised entities or individuals are prohibited from manufacturing, using, selling, offering to sell or importing patented products or employing patented methods without the patentee’s permission for business purposes. This implies that suppliers, manufacturers, local distributors/wholesalers, pharmacists, doctors and hospitals could potentially face patent lawsuits as defendants. However, in practice, few pharmaceutical patentees sue doctors, hospitals or other health providers in China.

Notably, healthcare regulatory authorities (HRAs) and intellectual property offices (IPOs) also do not form part of infringement proceedings. However, if dissatisfied with an IPO’s decision on patent application or invalidation, a party can file an administrative lawsuit against such IPO, with the IPO listed as the defendant.

Preliminary Injunction Proceedings

Under PRC law, if a patentee or interested party possesses evidence demonstrating that another individual is currently infringing or is expected to infringe upon a patent, or is engaging or expected to engage in actions hindering the realisation of rights by the patentee or interested party, and such infringement could result in irreparable harm to the lawful rights and interests of the patentee or interested party if not promptly halted, the patentee or interested party has the option of seeking a preliminary injunction from the court. This injunction may include measures under the law such as:

• attaching property;
• directing specific conduct; or
• prohibiting particular actions.

Upon receipt of an application, the court, in urgent circumstances, is obliged to issue a ruling within 48 hours. If the court decides to grant the preliminary injunction, its execution is immediate.

During the examination of a preliminary injunction application, the court is mandated to take into account several factors, including:

• the factual and legal basis of the applicant’s request, encompassing the stability of the intellectual property’s (IP) validity under consideration;
• the potential for irreparable damage to the legitimate rights and interests of the applicant if the preliminary injunction is not granted, as well as the impact on the enforcement of the eventual ruling or any other resulting harm;
• weighing of the damage caused by the failure to grant a preliminary injunction against the harm caused by granting it to the respondent;
• consideration of whether the granting of a preliminary injunction would adversely affect public interests; and
• consideration of any other relevant factors.

Most preliminary injunctions are ordered based on ex parte application. However, if needed, the court has discretion to hold an inter parte hearing over the application for preliminary injunction.

Requirements Before a Preliminary Injunction Request

The patentee or interested party can apply for a preliminary injunction only for granted patents. Patent applications or translations are not eligible as a legal basis for either infringement lawsuits or preliminary injunctions.

Quia timet relief is available in certain circumstances. The law sets forth the following that shall be considered as an “urgent situation”:

• where trade secrets of the applicant are to be illegally disclosed;
• where the applicant’s right of publication or privacy and other personal rights are to be infringed;
• where the IP in dispute is to be illegally disposed of;
• where the applicant’s IP is being or will be infringed during a time-sensitive occasion such as a trade fair;
• where a time-sensitive popular show is being or will be infringed; and
• other situations requiring immediate preservation measures.

There are no specific procedural rules for patent litigation in life sciences cases. The same civil procedural rules apply to applications for preliminary injunctions in pharmaceutical patent cases.

How Is the Alleged Infringer Notified of a Preliminary Injunction Request?

Upon ruling to enact preservation measures or reject an application, the court is obligated to serve a ruling on both the applicant and the respondent. If delivering the ruling to the respondent might impact on the adoption of preservation measures, the court may serve the ruling on the respondent no later than five days after implementing said measures.

The court, relying on the applicant’s submission, may decide on granting a preliminary injunction, occasionally notifying the alleged infringer post-implementation of preservation measures and thereby limiting their chance to present evidence during the court review. Nevertheless, the alleged infringer retains the right to apply to the same court for the reconsideration of the preliminary injunction post-decision. In instances of preservation errors, a claim for damages is permissible.

Notably, Chinese law lacks a “protective letter” doctrine akin to that in Europe. However, as previously mentioned, the alleged infringer can seek reconsideration of the preliminary injunction ruling, affording them the opportunity to pursue compensation for any inaccuracies in the application process.

Infringement and Validity Proceedings

In China, patent infringement and validity proceedings follow a bifurcated structure. Patent infringement matters are adjudicated through litigation processes before the civil court, while patent invalidation procedures are submitted to the CNIPA via administrative channels.

In cases where the defendant requests to challenge the validity of a patent during the defence period in a dispute involving the infringement of an invention patent accepted by the court, or in a dispute concerning the infringement of a utility model or design patent that has been reviewed and upheld by the CNIPA, the court may proceed with the litigation without suspension. It is noteworthy that the patent invalidity examination typically takes approximately eight months, which is far less than the time period of a civil infringement lawsuit. Consequently, by the time the court renders a judgment, the CNIPA’s examination decision is usually already concluded.

Nullity Proceedings

In China, a nullity proceeding can only be filed against a patent after it has been granted by the CNIPA.

Proceedings Regarding the Infringement Case

The statutory timeframe for initiating legal action against patent infringement spans three years, commencing from the date when the patentee or interested party becomes aware or should have reasonably become aware of the infringement and the infringer.

In the course of an infringement proceeding, the court is responsible for serving the complaint to the alleged infringer. Within five days of docketing a case, the court is obliged to provide the defendant with a copy of the written complaint. The date affixed to the service acknowledgment by the recipient signifies the official date of service. Electronic means, such as email or SMS, are now widely used in China for court’s service. Following receipt, the defendant must submit a written statement of defence within 15 days. For parties without domicile within the territory of the PRC, the court may employ special methods, such as service based on international treaties, diplomatic channels or other legally specified manners.

In practical terms, the initial judgment in the first instance typically takes between one year and one-and-a-half years for the court to deliver. Prior to the hearing, the court may arrange pre-hearing sessions to facilitate the delivery of parties’ preliminary opinions and the examination of evidence by the involved parties. There has been no mechanism of discovery in Chinese litigation; a party may apply to court for evidence investigation and collection, if such evidence is closely related to the facts to be proved but is in the possession of the opposite party.

Proceedings Regarding Patent Invalidity

From the moment the CNIPA grants a patent right until its expiry, any entity or individual holds the right to petition for invalidation before the CNIPA. The CNIPA, upon receiving a written request for patent invalidation and accompanying documents, forwards these to the patent holder, prompting them to express their views within a stipulated timeframe. At the discretion of the involved party or as dictated by case requirements, the CNIPA may opt to conduct an oral hearing for the invalidation request. The final decision declaring the patent invalid is typically rendered approximately six to eight months within the filing of the petition for invalidation.

The optimal time to initiate a primary infringement action is upon the granting of a patent, supported by preliminary evidence indicating the alleged infringer’s engagement in actions that violate the patent rights. This includes making, using, promising the sale of, selling or importing the patented product, or utilising the patented process. These activities should be conducted for production or business purposes.

In instances of patent infringement disputes related to utility model patents or design patents, the court or CNIPA may request the patentee or interested party to furnish a patent evaluation report generated by the patent administration. This report, derived from searching, analysing and evaluating the relevant utility model or design, serves as evidential support for the trial and resolution of the patent infringement dispute.

In light of the reversal of the burden of proof, in disputes involving a patent for the invention of a manufacturing process for a new product, the entity or individual manufacturing the identical product is obligated to furnish evidence demonstrating the distinctions in their manufacturing process from the patented one.

Pre-action discovery/disclosure is not available in China.

In a civil infringement lawsuit, a patent holder or concerned party has the option of petitioning the court for evidence preservation if there is a risk of evidence destruction or loss, or difficulty in obtaining it later. Once the petition for evidence preservation is granted, court judges, together with bailiffs, may search and seize infringing products or other related evidence at the defendant’s premises.

In cases involving suspected patent counterfeiting, when a patent holder initiates an administrative complaint for infringement, the administrative authority is empowered to decide on sealing or impounding products proven to bear a counterfeit patent based on evidence.

Only a declaratory judgment of non-infringement is available under Chinese law.

If a right-holder gives a warning of patent infringement to another person, and the person warned or an interested person reminds the right-holder in writing of exercising their right to sue and the right-holder neither withdraws the warning nor files a lawsuit within one month after receipt of the written reminder or within two months after the written reminder is sent, such person can then file a lawsuit to request a confirmation that their act does not infringe the patent.

In China, there is no legal concept equivalent to “Arrow Declaration”.

Equivalence infringement, or the doctrine of equivalents, was officially introduced into Chinese patent legislation in 2009, through the implementation of the Chinese Supreme Court’s judicial interpretation. Chinese courts have since developed a three-step method for determining equivalence infringement, which is conveniently referred to by the Chinese legal community as the “three (basically identical) plus one (obviousness)” approach.

The “three plus one” approach includes:

• step 1 – ascertaining the distinguishing features;
• step 2 – comparing the distinguishing features and the patent, to assess whether they use basically identical means to achieve functions which are basically identical and which result in basically identical effects; and
• step 3 – determining obviousness for replacement.

There is no obligation to “clear the way” ahead of a new product launch. However, when sued for patent infringement, Freedom to Operate (FTO) reports can be used to prove unintentional infringement to avoid punitive damages.

In China, it is not uncommon for experts to be involved in civil lawsuits, particularly in patent infringement cases, such as those involving life science patents. These experts fall into two categories: expert witnesses and expert assistants.

Expert witnesses are typically responsible for endorsing the appraisal report, attending court sessions and providing testimony.

Expert assistants actively contribute to the trial process, participating in entire court hearings, posing questions to the opposing party, and responding to queries from the judges.

Moreover, if the case concerns complex technical issues, the court may appoint technical investigators to participate in pre-hearing sessions or court hearings; the technical investigator may ask questions of the parties, expert witnesses and expert assistants about the technical issues (in relation to the patent at issue), and may conduct investigations.

Theoretically, expert evidence is permissible in patent infringement proceedings, though this is not common in China.

Experiments are permissible for establishing or refuting infringement or validity in terms of life science patents. For instance, the court has the authority to carry out comparisons and experimentation directly within the court session for evidentiary purposes.

Discovery/disclosure is not available in China.

In patent infringement litigation, besides the non-infringement defence, common defences include:

• prior use defence;
• prior art defence;
• patent exhaustion defence;
• Bolar exception defence;
• scientific research purpose defence;
• temporary transit defence;
• non-production and operation purpose defence;
• abuse of patent right defence; and
• legitimate source defence.

The legitimate source defence does not assume liability for compensation.

Generally, patent infringement lawsuits will not be stayed due to patent invalidation procedures. However, the litigation period is generally longer than for administrative procedures. Therefore, administrative decisions can in fact also affect court rulings. For example, if an administrative decision declares a patent invalid, the court typically rejects the lawsuit.

Patents cannot be amended during litigation, though they can be amended during patent invalidation proceedings.

In pharmaceutical and life sciences cases, judges, rather than juries, preside over civil proceedings. Both preliminary injunctions and main actions in patent infringement disputes fall under the jurisdiction of the court in the location of infringement or the defendant’s domicile, allowing forum shopping. Differences between courts primarily arise from judges’ experience and case trial durations, though the legal foundation for court rulings remains consistent, resulting in no significant overall deviation.

According to Article 11 of the PRC’s Patent Law, unless otherwise specified, exploiting a patent without the patentee’s permission for production or business purposes, or making, using, offering for sale, selling or importing patented products, is prohibited. This applies to small-molecule pharmaceutical products as well.

In Chinese practices, a marketing authorisation application or grant is typically considered exempt from patent infringement as a pre-launch activity. However, actions such as reimbursement, pricing, listing applications or tender submissions (which in principle would not be available on the public record) may be deemed patent infringement.

Article 18 of the 2020 Amendment to Several Provisions of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Cases on Patent Disputes defines the offer to supply or sell as declaring the intention to sell through advertising, shop displays or exhibitions. Offering for sale without authorisation remains an independent act of patent infringement under the PRC’s Patent Law.

Further, an administrative punishment decision by the Shanghai Intellectual Property Office (Case No [2019] 2) illustrated that a disclaimer stating “Products under patent are not offered for sale until patent expiry in the relevant countries” could not justify an infringement of offering for sale under the PRC’s Patent Law.

Regarding infringement, current laws or regulations in China do not provide special consideration for second medical-use patents, skinny labelling, etc.

Regarding parallel imports, Article 75(1) of the PRC’s Patent Law is usually interpreted as an exemption for patent infringement for parallel importation activities, regardless of country of origin.

Current Chinese laws lack specific provisions for data and market exclusivity related to orphan drugs, paediatric formulations, new indications or combinations. For generic chemical drugs, only the first applicant successfully challenging a listed patent and obtaining the first marketing approval receives a 12-month exclusivity period.

On 9 May 2022, the National Medical Products Administration of the PRC released a draft revision of the Implementation Regulations of the Drug Administration Law of the PRC for public comments. Notably, Article 28 proposes a 12-month market exclusivity for the first approved paediatric new variety, dosage form or specification, and for those with new indications, usage or dosage. Article 29 suggests a seven-year market exclusivity for new orphan drugs, contingent on the drug marketing authorisation holder’s commitment to ensuring drug supply. It is important to monitor the status of this draft for any formal approval updates.

Article 75(5) of the PRC’s Patent Law is often viewed as the country’s Bolar exemption, permitting the production, use or importation of patented drugs or medicinal equipment for the purpose of obtaining administrative approval or providing required information. It also excludes the production or importation of such items from patent infringement, specifically for the applicant.

Similarly, Article 76 of the PRC’s Patent Law, after its fourth amendment, is considered the country’s Hatch-Waxman Act, as it establishes an early dispute resolution system for generic market entry.

The National Medical Products Administration (NMPA) and the CNIPA jointly issued the Implementation Measures for the Early Settlement Mechanism of Drug Patent Disputes on 4 July 2021. According to Article 3, the China Patent Information Registration Platform for Marketed Drugs (the “Platform for Marketed Drugs”, akin to the Orange Book), is managed by the Centre for Drug Evaluation, NMPA.

On this platform, the drug marketing authorisation holder is obliged to disclose various information, including:

• drug details;
• related patents;
• patent status; and
• contact information (Article 4).

Generic drug applicants must notify the marketing authorisation holder via paper or email, with the declaration being publicly accessible on the platform (Article 6).

Given the absence of specific timing requirements in current regulations, regular monitoring of the Platform for Marketed Drugs is advised for drug marketing authorisation holders.

China’s Patent Linkage System

China’s patent linkage system for generic drugs is primarily governed by three legal frameworks:

• the Implementation Measures for the Early Settlement Mechanism of Drug Patent Disputes (for Trial Implementation) jointly issued by the Centre for Drug Evaluation, NMPA and CNIPA (the “Implementation Measures”);
• the Administrative Adjudication Measures for Early Resolution of Drug Patent Disputes issued by the CNIPA (the “Administrative Adjudication Measures”); and
• the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Patent Disputes Related to Drugs Applied for Marketing Authorisation (the “Provisions of the SPC”).

As outlined in Article 5 of the Implementation Measures, pertinent patents for chemical drugs encompass:

• the compound patent of the pharmaceutical active ingredient;
• the composition patent containing active pharmaceutical ingredients; and
• the medical indication patent.

The Mechanism

Under Chinese law, a drug marketing authorisation holder must register essential information within 30 days of obtaining the drug registration certificate. This includes details such as:

• drug name;
• dosage form;
• specifications;
• marketing authorisation holder;
• related patent information; and
• contact details.

The Platform for Marketed Drugs, managed by the Centre for Drug Evaluation, NMPA, makes this information publicly available.

Generic drug applicants must, upon submitting a marketing authorisation application, declare one of four options regarding listed patents. Within ten working days of application acceptance, the Centre for Drug Evaluation, NMPA publicly discloses the application details and corresponding declarations. Simultaneously, the generic drug applicant informs the marketing authorisation holder via paper and email.

In the case of objections to a Type (4) declaration, the patentee or interested party may file a lawsuit with the Beijing Intellectual Property Court or seek administrative adjudication with the CNIPA within 45 days of the Type (4) declaration being disclosed on the platform. If litigation or administrative adjudication is initiated, the Centre for Drug Evaluation, NMPA imposes a non-renewable nine-month stay period on the generic drug registration application (Article 8).

Marketing approval suspension for the generic drug occurs only if the court judgment or administrative adjudication decision determines that the application falls within the scope of protection of the listed patent. This suspension applies throughout the entire marketing approval process, whether within or beyond the nine-month stay period.

Lawsuits concerning biologics and biosimilar patents will follow the same procedural rules as indicated in 2.1 Infringing Acts.

The details discussed in 2.2 Regulatory Data and Market Exclusivity will not differ in relation to biologics and biosimilars, except that there will be no 12-month market exclusivity period for biosimilar applicants.

The details discussed in 2.3 Acceptable Pre-Launch Preparations do not differ where the litigation concerns biologics or biosimilars.

The details discussed in 2.4 Publicly Available Drug and Patent Information will not differ where the litigation concerns biologics or biosimilars.

The details discussed in 2.5 Reimbursement and Pricing/Linkage Markets will not differ where the litigation concerns biologics or biosimilars, except that there will be no nine-month stay period for marketing approval in the scenario of litigation or administrative adjudication for applications of biosimilars.

In China, the availability of a patent term extension for pharmaceutical products is specifically governed by Article 42.3 of the Patent Law. This provision allows the patent administrative department of the State Council to grant an extension, not exceeding five years, upon the request of the patentee. The purpose is to compensate for the time required for the assessment and approval of a new drug’s marketing. The total effective term of the patent, after approval for marketing, must not exceed 14 years.

Invention patents related to new drugs include new drug product patents, preparation method patents and pharmaceutical use patents that meet specific requirements found in the Patent Examination Guidelines (2023). The application for the extension should be filed by the patentee; and if the patentee is inconsistent with the holder of the drug marketing authorisation, the written consent of the holder of the drug marketing authorisation should be obtained. For a patent to be granted the extension, it is also a prerequisite that it has not been granted an extension previously. According to the newly amended Detailed Rules for the Implementation of the Patent Law (2023) and the Patent Examination Guidelines (2023), for different products but the same patent, the applicant can only apply for extension for one drug product. For one product protected by a number of patents, the patentee can only apply for extension for one patent. Where the patent(s) belong(s) to multiple patentees, and no patent agency has been engaged, the application shall be handled by their representative.

Additionally, another patent term extension scheme is provided in Article 42.2 of the Patent Law, which is available for all invention patents and mainly applies to circumstances where there is unreasonable delay in the patent grant procedure. According to this provision, patents eligible for extension include invention patents granted four years from the application filing date and three years from the date of filing the request for substantial examination. In such circumstance, the patent administrative department of the State Council shall, at the request of the patentee, provide patent term extension for unreasonable delay in the patenting process for the invention, except for unreasonable delay caused by the applicant.

To date, there have been no special rules for paediatric extensions, though this can be included in the patent term extension scheme.

To date, there has been no special rule for paediatric-use authorisation similar to PUMA in China.

In the draft revision of the Implementation Regulations of the Drug Administration Law of the PRC for public comments, Article 29 suggests an up to seven-year market exclusivity for new orphan drugs, though such provision has not yet entered effect.

Firstly, the PRC’s Civil Procedure Law mandates that a plaintiff is required to post a bond when applying for a preliminary injunction. The bond serves the purpose of compensating the adversely affected party if the preliminary injunction is erroneously granted and enforced. In practice, plaintiffs often secure an insurance policy instead of the bond, with assistance from an insurance company.

Preliminary injunctions become enforceable upon issuance of decisions. The courts follow the same procedural steps for serving preliminary injunction orders as they do for civil complaints.

In China, enforcing preliminary injunctions mirrors the process of enforcing judgments. Non-compliance by the affected party prompts the court to enforce it compulsorily.

The primary procedures for preliminary injunctions encompass:

• the application (when initiated by the applicant rather than at the court’s discretion);
• court decision;
• decision enforcement;
• decision review; and
• injunction termination.

Generally, a court should render a decision within 48 hours of the application. Enforcement follows immediately, and if the applicant does not initiate litigation or arbitration within 30 days, the court may terminate the injunction.

As previously noted, the patentee must furnish a bond for a preliminary injunction, with the court determining the amount at its discretion. The patentee is obligated to file litigation or arbitration within 30 days of enforcement, and no further actions are required to enforce or sustain the injunction. However, the injunction typically remains in force only until the judgment or awarding of the litigation or arbitration takes effect.

Lastly, there is no provision for staying a preliminary injunction pending appeal in China.

In China, a prevailing plaintiff receives a final judgment that includes a final injunction directing the defendant to cease and desist from any infringement. Final judgments are served using the same procedural steps as civil complaints, typically through mail to representative lawyers.

If the infringer fails to comply with the judgment’s obligations, the enforcement procedure involves initiating enforcement, either by the patentee or the court, within six months of receiving the application. The completion of enforcement does not have a specific time limit. The application for enforcement can be made within two years from the last day of the designated period for performing the obligation in the judgment.

Unlike preliminary injunctions, the patentee is not required to provide a bond or prepay enforcement fees before initiating enforcement proceedings for a final judgment in China.

In very rare circumstances, such as when the underlying judgment is under retrial, the enforcement proceeding may be stayed.

A Chinese court does have the discretion to award damages instead of an injunction. According to the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law to the Review of Intellectual Property Dispute Preservation Cases, the court considers factors such as proportionality and/or public interest when deciding on an injunction. This principle holds true in life sciences and pharmaceutical patent litigation cases.

Additionally, the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Patent Infringement Disputes stipulates that, considering national and public interests, the court may order the defendant not to cease the alleged infringement but rather to pay appropriate, reasonable fees.

In China, methods of calculating damages include considering the following:

• the actual loss suffered by the right-holder due to the infringement;
• the benefits obtained by the infringer from the infringement;
• where it is difficult to determine both the above, the damages shall be reasonably determined by reference to the multiple of the royalty; or
• where it is difficult to determine all three of the above, the court can determine discretionary damages as not less than CNY30,000 and not more than CNY5 million.

The methods are electable by the plaintiff.

The right-holder’s actual loss is typically calculated by the decreased sales profit due to the infringement, and the infringer’s benefits are typically calculated by the sales profit of the infringing products (such as the sales volume multiplying the profit per product).

Reasonable royalty is typically calculated by precedent licence contracts between the right-holder and third parties. Discretionary damages are calculated based on the type of the patent and the nature and circumstances of the infringement.

As for transfer pricing, there are no specific rules on its impact on assessment of damages, but it may be considered as a factor for lifting/reducing the damages.

It is hard to say what a typical award of damages is in the pharma/biopharma/medical device industry, as each case involves its own facts. That said, the PRC’s Patent Law provides punitive damages in cases where the infringement is wilful and serious. In such circumstances, the damages may be determined as not less than one and not more than five times the amount calculated by the right-holder’s actual loss, the infringer’s benefits or the reasonable royalty.

Generally, damages accrue when the infringement starts. However, if the right-holder brings a suit after three years from the infringement and the infringer is known, and if the infringement continues and the patent is still valid at the time of filing the litigation, the damages shall be calculated three years in advance from the date of filing the litigation. The law does not specifically provide for whether interest is payable, though there are rare cases where interest is awarded, especially when the court adopted a discretionary amount of damages.

Usually, damages are awarded together with technical trials in the final judgment. However, it is possible for a quantum hearing to be held separately if the court deems it necessary. Interim awards are also possible, though not very common.

As indicated in 5.1 Preliminary Injunctive Relief, in cases where the preliminary injunction is wrongfully granted and enforced, the applicant should pay damages to the respondent. Specific considerations include:

• that the applicant does not bring a lawsuit or apply for arbitration within 30 days;
• that the patent rights requested for protection are declared invalid; and
• that the enforceable judgment finds that the respondent’s actions do not constitute infringement.

Such claims are relatively rare and not frequently raised. It is hard to say whether such claims are easily settled.

Only a plaintiff to a lawsuit may claim for damages. Third parties are not entitled to claim for damages in a civil lawsuit.

According to Article 71 of the PRC’s Patent Law, the prevailing plaintiff in a patent infringement litigation is entitled to recover reasonable legal expenses, covering:

• attorney fees;
• notarisation fees; and
• related costs, such as evidence investigation and preservation fees.

It is essential to note that these legal costs are not automatically granted – the plaintiff must formally request recovery, specifying the amount and providing supporting documents such as invoices.

In the case of a favourable judgment for the plaintiff, where the defendant is held responsible for patent infringement, the court will order compensation for the plaintiff’s justifiable legal costs. Interim payment orders are rarely issued in Chinese litigation, making this practice uncommon.

The court has discretionary authority to award legal costs either in full or in part, considering the reasonableness of the amount claimed and the adequacy of supporting evidence. Distinct from legal costs, court fees in Chinese litigation are the plaintiff’s responsibility and must be paid upfront. These fees are later apportioned between the parties based on the level of support for the plaintiff’s claims, as determined in the court judgment (refer to Chapter V on the Bearing of Litigation Costs in the Measures on the Payment of Litigation Costs).

Like many other jurisdictions, there is prescription of action in Chinese civil litigation. For patent infringement cases, generally speaking, the prescriptive period is three years commencing from the date when the claimant/plaintiff knows or should have known of the infringement and the infringer (refer to Article 74 of the PRC’s Patent Law). Therefore, the claimant’s/plaintiff’s delay in bringing proceedings may induce reduction or even withholding of monetary relief.

However, as Chinese laws do not require that the claimant/plaintiff engage in pre-action correspondence before initiating actions, the court will not withhold or reduce relief if the claimant/plaintiff directly files civil actions with the court. Also, since there is no mandatory requirement for the registration or recording of a licensee to bring legal action, there is no penalisation on relief to exclusive licensee claimants not named on the Patent Register.

Quite a few trade mark disputes occur in the life sciences and pharma sector in China, whether between local practices or between local and foreign entities.

The main source of law concerning trade mark disputes in the life sciences and pharma sector is the PRC’s Trade Mark Law, while the PRC’s Unfair Competition Law also regulates passing off or free-riding activities relating to unregistered marks.

Given the above, restrictions on naming, issues around confusion and anti-counterfeiting for pharma/medical device marks will follow the general rules under the PRC’s Trade Mark Law and the PRC’s Unfair Competition Law.

For restrictions on naming, based on the general principle that a generic name may not be registered as a trade mark, Article 29 of the PRC’s Medicinal Product Administration Law further clarifies that the names of medicinal products listed in the national medicinal product standards shall be the generic names of medicinal products and should not be used as trade marks.

Copyright disputes do occur in the life sciences and pharma sector in China.

Product labels, instructions for use, research articles or reports, software programs and other objects in the life sciences and pharma sector, originally created, may be protected as works under the PRC’s Copyright Law; the scope of protection is limited to expressions and will not extend to any idea, procedure, function, process, method of operation, concept or discovery.

The main sources of law include:

• the PRC’s Copyright Law;
• administrative regulations, such as the Regulations for the Protection of Computer Software and the Regulations for the Implementation of the Copyright Law; and
• judicial interpretations, such as the Interpretation of the Supreme People’s Court Concerning the Application of Laws in the Trial of Civil Disputes Over Copyright.

Trade secrets disputes are common in the life sciences and pharma sector in China.

Common issues with respect to trade secrets disputes include, without limitation:

• whether the information claimed by the plaintiff is not known to the public, well protected through reasonable confidential measures and has commercial value, and thus meets the threshold of trade secret protection;
• whether the defendant has access to the plaintiff’s trade secret;
• whether the technology/information used by the defendant is the same as or substantially similar to the plaintiff’s trade secret; and
• how to determine and calculate the compensation amount. 

Moreover, as the infringer’s disclosure activities may cause the trade secret to become open to the public and to no longer be protectable, it is not uncommon for the plaintiff to seek interim injunction from the court.

The main sources of law include:

• the PRC’s Unfair Competition Law; and
• judicial interpretations such as the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Infringements Upon Trade Secrets.

Appeal Regarding Preliminary Injunction

In China, the party affected by the preliminary injunction can apply to the same court that issued the injunction for reconsideration, which is of the party’s right. The court is obligated to render a reconsideration decision within ten days of receiving a petition for reconsideration. Throughout the reconsideration, the preliminary injunction order maintains its full force and effect.

Appeals Regarding Patent Infringement Cases

According to the PRC’s Civil Procedure Law, a party can appeal a first-instance judgment within 15 days of receiving the written judgment. If a party resides outside the PRC, it can file an appeal against a judgment or ruling of a first-instance court within 30 days of receiving the written judgment or ruling.

During the appeal process, the second-instance court typically conducts a hearing session to hear the case. If, after reviewing the case files, conducting investigations and questioning the involved parties, no new facts, evidence or reasons are presented, the court may deem holding a hearing session unnecessary. The second-instance court is required to complete the trial of an appeal case within three months after it is docketed. Any extension of this period due to special circumstances requires approval from the court president. In the second instance, the court primarily assesses whether there were errors in factual determination or legal application during the first-instance court’s trial. Practically, the second instance of a patent infringement lawsuit usually takes between nine months and one year.

Appeals Regarding Patent Validity Cases

If any party disagrees with the CNIPA’s decision on patent invalidation or maintenance, they have a three-month window from the date of receiving the notification to file a lawsuit in court requesting a judicial review. During the legal proceedings, the court notifies the opposing party from the invalidation request procedures to participate in the litigation as a third party. The judicial review is a two-instance administrative lawsuit, which may take between one year and one-and-a-half years in total.

Release of the Preliminary Injunction

In China, a preliminary injunction is tied to a specific lawsuit. Therefore, once a patent is declared invalid, as per PRC laws and regulations, the patentee is required to withdraw the lawsuit. If not, the court will dismiss the lawsuit, rendering the underlying lawsuit non-existent. In such cases, the preliminary injunction becomes invalid, and the court issues an order to lift the previous preliminary injunction. Simultaneously, the defendant retains the right to apply for the release of the preliminary injunction. The court will assess the application and make a ruling accordingly.

The Panel of Judges for Patent Litigation Appeals

In China, the Supreme Court hears the vast majority of second-instance patent infringement cases. That said, according to the latest regulations, appellate cases for utility model patents and design patents shall be heard by the provincial Higher People’s Court rather than the Supreme Court.

A collegial panel encompassing entirely judges shall be formed to adjudicate a second-instance infringement lawsuit. The members of a collegial bench must be in an odd number. In some patent cases, as in first-instance proceedings, a “technical judge” will be present during the hearing besides the collegial panel.

In patent litigation, the general provisions of the PRC’s Civil Procedure Law are applicable. Additionally, there are certain specific provisions in IP litigation, such as:

• the Several Provisions on Evidence in Intellectual Property Civil Litigation; and
• the Several Provisions of the Supreme People’s Court on the Application of Law in the Trial of Patent Dispute Cases.

In the context of life sciences and pharma IP litigation, additional forums or avenues for dispute resolution involve:

• initiating platform complaints;
• submitting administrative reports; and
• managing customs detentions.

When dealing with life sciences and pharma IP infringement on internet platforms, the right-owner has the option to file complaints or reports with the platforms selling the infringing or counterfeit products. They may also choose to submit administrative complaints to competent IP administrations in lieu of pursuing civil litigation. In China, customs detention serves as an administrative measure for combating infringement and counterfeiting during the importation and exportation processes. The PRC’s Regulation on the Customs Protection of Intellectual Property Rights is specifically designed to facilitate customs protection of IP rights.

Alternative dispute resolution (ADR) options for life sciences disputes in China encompass arbitration, administrative determination and mediation.

Arbitration is chosen pre-emptively for its advantages in confidentiality, procedural flexibility and the selection of arbitrators with relevant expertise. Although traditionally a common ADR option, its adoption in life sciences disputes, particularly in infringement cases, is less frequent compared to litigation.

Administrative determination, outlined in the PRC’s Patent Law, serves as an alternative for patent disputes related to drug registration and is known as the “early resolution mechanism”. Recognised for its efficiency, it is increasingly utilised in life sciences disputes, nearly as frequently as litigation. In 2021, the NMPA and the CNIPA released the Implementation Measures for the Mechanism for Early Resolution of Drug Patent Disputes, for better implementation of administrative determination in drug application disputes.

Mediation can be employed concurrently with litigation, arbitration and administrative determination to achieve amicable resolution. As it can be integrated into other ADR options when parties intend to settle cases amicably, mediation is widely utilised.

ADR is not mandatory during court proceedings; the court in particular has no power to require the parties to engage in arbitration, since arbitration can be conducted only with parties’ consent. However, in practice, the court will usually strongly encourage the parties to engage in mediation/settlement discussion as a friendlier approach to resolving the dispute; this is common in Chinese judicial practice.

In Chinese civil litigation, as in many other jurisdictions, a prescription of action exists. For patent infringement cases, the prescriptive period is generally three years from the date when the claimant/plaintiff becomes aware or should have known about the infringement and the infringer (see Article 74 of the PRC’s Patent Law). Consequently, any delay by the claimant/plaintiff in initiating proceedings may lead to a reduction or even withholding of monetary relief.

Notably, Chinese laws do not mandate that the claimant/plaintiff engage in pre-action correspondence before initiating legal actions. Therefore, the court will not withhold or reduce relief if the claimant/plaintiff opts to directly file civil actions. Furthermore, since there is no requirement for the registration or recording of a licensee to bring legal action, there is no penalisation on relief for an exclusive licensee claimant not named on the Patent Register.

In China, group claims are available in civil litigation but are not common in the life sciences/pharma sector.

Article 56 of the PRC’s Civil Procedure Law provides that, where the parties on one side of a joint action are numerous, such parties may appoint a representative or representatives to participate in the action, and the litigation conduct of such representatives shall bind all the parties represented. However, to modify or relinquish any claims, admit any claims of the opposing party or reach a settlement, such representatives must first obtain consent from the parties represented.

Article 57 addresses cases where the subject matter of action for each party is of the same kind and the parties on one side of an action are numerous, but the exact number of such parties is uncertain when the action is instituted; here the court may publish a notice to describe the case and claims, and may notify right-holders to be registered with the court within a certain period of time. The right-holders that have been registered with the court may appoint a representative or representatives to participate in the litigation; if no representative is appointed, the court may determine a representative or representatives in consultation with the right-holders that have been registered with the court.

Additionally, the litigation conduct of such representatives shall bind all the parties represented; however, to modify or relinquish any claims, admit any claims of the opposing party or reach a settlement, such representatives must first obtain consent from the parties represented. The judgment or ruling issued by the court shall bind all right-holders that have been registered with the court, and shall also apply to actions instituted during the time limitation by rights-holders that have not been registered with the court.