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Case Study of the CNIPA'S Discretion in the Patent Invalidation Procedure

30

SEP

2022

1. INTRODUCTION

The patent invalidation procedure is an effective countermeasure against the infringement actions filed by the patentee. Concurrently with the infringement lawsuit, the accused infringer typically initiates invalidation requests to challenge the validity of the patent. As the proceedings for the infringement and invalidation cases continue, a settlement may be reached. At this time, the patentee may withdraw the infringement lawsuit, and may correspondingly require the accused infringer to withdraw the invalidation request as soon as possible to avoid the potential loss of his patent right. In this case, the CNIPA typically terminates the procedure accordingly, but the Panel still has the discretion to decide not to terminate the procedure and finally issue an invalidation decision.

In the recent practice, we have encountered an invalidation case where the petitioner withdrew the invalidation request but the CNIPA decided not to terminate the procedure and finally issued an invalidation decision. In the following part, we will introduce some typical cases related to the CNIPA's discretion used after the petitioner withdraws his invalidation request and discuss the issues that may require our attention in the practice patent invalidation.

2. CASE OVERVIEW

In the above invalidation case, the petitioner raised invalidation grounds related to lack of description support, lack of clarity, lack of essential features, and lack of novelty/inventiveness, and requested the CNIPA to announce the patent right completely invalid. In view of these invalidation grounds, the patentee submitted a set of amended claims, in which the independent claims were further defined with limitations from the dependent claims. Thereafter, during the oral hearing, the Panel first clarified that the set of amended claims is the basis for the examination, and then fully examined the opinions of both parties on these invalidation grounds.

After the oral hearing, the petitioner requested to withdraw the invalidation request, and particularly, on the basis of the originally granted claims rather than the amended claim set. However, the Panel hold that an invalidation decision can be issued to announce the patent right partially invalid according to the examination work already been done, so the Panel did not accept the petitioner's request to terminate the procedure. Finally, the Panel issued the invalidation decision and maintained the patent right valid on the basis of the amended claim set.

As the legal basis for the invalidation decision, it is prescribed in Rule 72 of the Implementing Regulations of the Patent Law of the People's Republic of China (hereinafter referred to as "Implementing Regulations of the Patent Law") that:

“The person requesting invalidation may withdraw his request before the Patent Reexamination Board makes a decision on it.

Where the person requesting invalidation withdraws his request or where his invalidation request is deemed to have been withdrawn before the Patent Reexamination Board makes a decision on it, the examination of the invalidation request is terminated. Where, based on the examination work it has done, the Patent Reexamination Board finds that it is able to make a decision of invalidation or invalidation in part of the patent right, the examination procedure shall not be terminated.”

As the main points of the invalidation decision, it is stated that:

Before the CNIPA issues an invalidation decision, the petitioner may withdraw his request. If the patentee submits an amended text of the claims during the invalidation procedure and the Panel has examined the amended text and found that the amended text can be accepted, such that an invalidation decision can be issued to announce the patent right completely or partially invalid according to the examination work already been done, the procedure shall not be terminated and the Panel may issue an invalidation decision to confirm the amended text of the claims.

3. UNDERSTANDING OF "EXAMINATION WORK ALREADY BEEN DONE"

According to the above main points, the key to the Panel's decision not to terminate the procedure lies in: "based on the examination work already been done, it is capable to issue the decision". But how to understand the "examination work already been done"? Does the patentee's claim amendment inevitably lead to partial invalidation of the patent right?

According to research on relevant invalidation cases, it can be determined that the patentee's claim amendment does not necessarily lead to the result of partial invalidation. For example, we have also found invalidation cases where the patentee also filed claim amendments, but the petitioner withdrew his invalidation request before the oral hearing, and finally the Panel concluded the case on the basis of the originally granted claims. The main difference in whether concluding the invalidation case on the basis of the originally granted claims or the amended text of claims lies in whether the claim amendment has been confirmed and clarified as the basis of examination, which is usually completed during the oral hearing.

During the oral hearing, both parties will fully express their opinions on the evidences and facts, the points in dispute, and the application of the law. In case of any claim amendment, both parties will confirm whether the opportunity and manners of the amendment comply with the requirements of the invalidation procedure, and the Panel will clarify whether the amended text shall be taken as the basis for the examination. Therefore, if the petitioner requests to withdraw his invalidation request before the amended text of claims is determined as the basis of examination, the petitioner's request for withdrawal shall be directed to the originally granted text of claims. Otherwise, the basis of the request for withdrawal shall be the amended text of claims. Therefore, depending on whether the petitioner withdraws the invalidation request before or after the oral hearing, there will be two different outcomes.

4. SCOPE OF THE INVALIDATION DECISION

In the above invalidation case, it is emphasized that the Panel has examined the amended text of claims and found that it can be accepted, so an invalidation decision shall be issued to confirm the amended text, but no further comments were provided regarding whether the amended claims overcome the defects of lack of description support, lack of novelty/inventiveness and the like alleged by the petitioner. Then, if the Panel decides not to terminate the invalidation procedure, is it possible to conduct further substantive examination on the amended text of the claims?

According to research on recent invalidation cases involving the CNIPA's discretion in deciding not to terminate the invalidation procedure in case of claim amendments, except for a few special cases, the CNIPA typically concludes the cases by simply maintaining the patent right valid on the basis of the confirmed amended text without further substantive examination. In other words, the CNIPA may not accept the petitioner's request to withdraw the invalidation request on the basis of the originally granted text in case of any claim amendment, but will still consider the right of disposal of the parties concerned, and simply confirm the amended text.

Nevertheless, it is worth noting that a typical case of the "Top Ten Cases of Reexamination and Invalidation in 2021" published by the CNIPA may convey a different concept regarding how to apply Rule 72 of the Implementing Regulations of the Patent Law.

In this typical case (Invalidation Decision No. 33195), the petitioner requested to withdraw his invalidation request after the oral hearing, however, the Panel did not terminate the procedure and conducted detailed substantive examination on each of the originally granted claims in view of the invalidation grounds, and finally issued an invalidation decision announcing the patent right completely invalid.

The CNIPA believes that this invalidation case plays an important and exemplary role in protecting intellectual property rights, stimulating innovation and safeguarding public interests, and explains its typical significance as:

The dispute on patent validity is not just a civil dispute between two parties, but relates to the interests of the public. In this invalidation case, although the petitioner filed a statement to withdraw his invalidation request, it was received after the oral hearing. According to the examination work that has been done, the facts and evidences have already shown that the grant of the patent right does not conform to the relevant provisions of the Patent Law of China. At this time, the procedure should not be terminated. This trial embodies the examination concept of both strictly protecting intellectual property rights and safeguarding the interests of the public in the invalidation procedure.

To sum up, even if the patentee may have not filed claim amendments during the invalidation procedure, it does not necessarily mean that the case can be concluded on the basis of the originally granted claims. In addition, in case of the patentee’s claim amendments, the CNIPA may simply confirm the amended text of claims, but may also perform a further substantive examination and provide detailed comments on each of the amended claims. Actually, due to the exemplary role of the above-mentioned typical case, the CNIPA may more flexibly apply Rule 72 of the Implementing Regulations of the Patent Law in the future practice. Therefore, it will be hardly surprising that the CNIPA may not accept the petitioner's request to withdraw the invalidation request, but continues a detailed examination on the invalidation grounds and announces the patent right completely or partly invalid.

5. ENLIGHTENMENTS PROVIDED BY THE CASES

The invalidation decision involves the confirmation of the validity of the patent right, but the right of disposal of the parties concerned should also be considered, for example, if the petitioner voluntarily withdraws his invalidation request. However, if the patent right can be announced completely or partly invalid but it is still maintained valid only because the petitioner withdraws the request, the existence of this defective patent right may potentially trigger a next invalidation procedure, which is a waste of examination resources, and may also potentially affect the implementation, innovation and progress of related technologies. Therefore, in compliance with the concept of safeguarding the interests of the public, the Panel is allowed not to accept the petitioner's request to withdraw the request, but to continue the examination and issue an invalidation decision announcing the patent right completely or partly invalid.

On the other hand, the patentee's claim amendment may also be deemed as a manifestation of exercising his right of disposal. In other words, if the patentee narrows the extent of protection of the patent right on his own initiative and the corresponding amended text is accepted by the Panel, it may be deemed that the patentee admits that a larger extent of protection does not conform to the relevant provisions, such that an invalidation decision can be issued maintaining the patent right valid on the basis of the amended text. Therefore, it is not difficult to understand why the Panel may not terminate the examination, but issue an invalidation decision which confirms the amended claims filed by the patentee.

In any way, the Panel typically needs to ascertain the facts of the invalidation case during the oral hearing. If an oral hearing is not scheduled such that the Panel cannot determine the basis for the examination or cannot examine the key points in dispute, it will not able to issue an invalidation decision. Therefore, the oral hearing is a key time point for the Panel to decide whether to terminate the procedure. If there is a possibility of settlement with the petitioner, the patentee should give full consideration to the strategy of claim amendments and the timing of settlement during the invalidation procedure, in order to avoid unnecessary loss of the patent right.

About the Firm

Liu Shen & Associates
Address 10/F, Building 1, 10 Caihefang Road, Haidian District, Beijing 100080, China.
Tel 86-10-6268 1616
Fax 86-10-6268 1818
Email mail@liu-shen.com
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