This is an informal case summary prepared for the purposes of facilitating exchange during the 2022 WIPO IP Judges Forum.
Session 5: Provisional Measures in IP Disputes (Part II)
Jiangsu High People’s Court, China [2008]: Jiangsu Baite Import and Export Trade Co., Ltd. and Jiangsu Huai’an Kangbaite Carpet Co., Ltd. v Mr. Xu, Case No. SMSZZ No. 71
Date of judgment: May 30, 2008
Issuing authority: Jiangsu High People’s Court, China
Level of the issuing authority: Appellate Instance
Subject matter: Enforcement of IP and Related Laws, Industrial Designs
Plaintiff: Jiangsu Baite Import and Export Trade Co., Ltd. and Jiangsu Huai’an Kangbaite Carpet Co., Ltd
Defendant: Mr. Xu
Keywords: Design patent infringement; provisional measures, property preservation orders, preliminary injunction
Basic facts: From April 16, 2003 to April 19, 2004, Mr. Xu filed three design patent infringement suits against Jiangsu Baite Import and Export Trade Co., Ltd. (Baite) and Jiangsu Huai’an Kangbaite Carpet Co., Ltd.(Kangbaite), claiming the infringement of his design patent “carpet (bamboo)”. During the trial proceedings of the latest two suits, Mr. Xu applied for provisional measures including (1) property preservation order and (2) preliminary injunction against Baite and Kangbaite. The court granted the application and issued the orders accordingly to (1) freeze their’ bank accounts, seize the infringing products (carpets) and (2) stop manufacturing or selling the infringing products.
On August 18, 2005, the Patent Reexamination Board of the China National Intellectual Property Administration declared the “carpet (bamboo)” design patent invalid.
On November 14, 2006, the Plaintiffs, Baite and Kangbaite, filed the suit against the Defendant, Mr. Xu, for their financial loss due to the wrongful application of provisional measures.
The Nanjing intermediate People’s Court held as follows:
- Since the “carpet (bamboo)” design patent is invalid, the Defendant has never enjoyed the patent rights and there was no basis for the application of provisional measures. The Defendant should compensate for the losses caused by the wrongful application for both property preservation order and preliminary injunction.
- According to Article 47(2) of the Patent Act, the decision to invalidate a previously in effect patent cannot retroactively affect the judgments or rulings regarding patent infringement executed by the court. However, the “judgment or rulings” should be limited to those decisions on patent infringement. They should not include procedural rulings, including rulings regarding provisional measures.
Held: Upon appeal, Jiangsu High People’s Court upheld the decision of the lower court while emphasizing that the validity of a patent is not absolute. A currently valid patent could be declared invalid anytime later. The applicant of provisional measures should be aware of the risk that their patent could be declared subsequently invalid, and be cautious of the potential future obligation to compensate for the losses of the other party when filing the application.
Relevant legislation:
Article 96 of the Civil Procedure Law
Article 47(2) of the Patent Law