Stopping patent infringement in four months through administrative action

Facts
Comment

On 8 October 2019 LPG Systems received an administrative decision from the Beijing Intellectual Property Office (Beijing IPO) ordering an infringer to stop design patent infringement. On 14 February 2020 LPG prevailed in an invalidation proceeding initiated by the infringer against its design patent CN201530003419.8, in which the China National Intellectual Property Administration (CNIPA) maintained the validity of this design.

Facts

LPG is a world leader in cellular stimulation, offering treatment for therapeutic, beauty and medical applications. In 2014 LPG developed a human body balance device named HUBER 360 and filed design patent CN 201530003419.8 with the CNIPA (the subject design). The design was granted on 15 July 2015 and has remained valid.

In late 2018, one of LPG's distributors observed that a Guangzhou company (the infringer) released with great fanfare a new product bearing strong resemblance to LPG's subject design at a local exhibition. LPG's lawyers visited the infringer's booth the following day and organised mobile notarisation. Since the exhibition was scheduled to close shortly, it was unfeasible to take any action on-site. Considering that the patentee demanded to enjoin the competitor's infringement as soon as possible, a lengthy civil lawsuit with a low likelihood of obtaining an interlocutory injunction was off the table. LPG's lawyers therefore tried to file an administrative complaint with the Guangzhou Intellectual Property Office based on the notarised evidence, but the office was undergoing institutional restructuring and had almost halted the operation at that time.

It came to light that the infringer planned to attend a trade fair in Beijing on 4 June 2019. An opportune complaint was filed with the Beijing IPO, which led to the successful preservation of photographic and video evidence and the service of a complaint to the infringer.

In response to the complaint, on 18 June 2019 the infringer filed an invalidation request against the subject design patent and applied to stay the enforcement procedure at the Beijing IPO. LPG's lawyers submitted the novelty search report to prove the novelty of the subject design and successfully convinced the Beijing IPO to go ahead with the procedure.

On 23 September 2019 LPG's lawyers attended the oral hearing organised by the Beijing IPO and on 8 October 2019 received a favourable decision, ordering:

• the immediate cessation of infringement;
• the destruction of stock of the infringing product and equipment and tools specifically for its manufacture; and
• the prohibition of selling or using any unsold infringing products or marketing of the unsold infringing product of any kind.

In February 2020 after the oral hearing the CNIPA issued its decision to maintain the validity of the patent.

Comment

Article 21 of the Measures for the Administrative Enforcement of Patents released by the CNIPA stipulates that:

The patent infringement dispute handled by the patent administrative authority is to be concluded within three months upon acceptance of the complaint. Where the complexity of the case warrants an extension to the initial three-month period, approval of the head of the said patent administrative authority shall be sought for and the extension shall be no longer than one month at the most.

Article 44.1 of the measures states that:

Where the patent administrative authority has made a decision, in which patent infringement is established and the immediate cessation of the infringement is ordered, yet the infringer files an administrative lawsuit against the decision before the people's court, the enforcement of the said decision shall not be stayed during the administrative proceeding.

Against the backdrop that civil proceedings remain a mainstream approach in enforcing patent rights, administrative enforcement, in some circumstances, could be a viable option if the patentee opts for a time and cost-efficient remedy. In the above case, the patentee's primary aim was to force the infringer to immediately stop manufacturing and marketing the infringing product (ie, large and high-value rehabilitation equipment).

After weighing up the pros and cons of civil lawsuit and administrative enforcement, LPG's lawyers filed a complaint with the Beijing IPO during the trade fair, followed up with the IPO enforcement action and obtained the Beijing IPO decision within four months. Although the infringer filed an administrative lawsuit against the Beijing IPO decision to prolong the procedure, it has already stopped the infringement as a precaution. The patentee could still file a follow up civil lawsuit to claim damages.

For further information on this topic please contact Shuhua Zhang at Wanhuida Intellectual Property by telephone (+86 10 6892 1000) or email (zhangshuhua@wanhuida.com). The Wanhuida Intellectual Property website can be accessed at www.wanhuida.com.