A patent right is a fixed-term monopoly market right granted after national administrative examination, and one of the conditions for its effective existence is the continuous payment of patent annual fees.” Honesty and credit “is a fundamental principle of market activities and civil law, which requires civil subjects to abide by their promises in civil activities, maintain market moral order, and pursue their own interests without harming the interests of others and society.

1、 Personnel mobility and intellectual property ownership disputes

With the development of the market economy, personnel mobility has become a normal phenomenon. However, personnel turnover can also take away the technology and other intellectual property rights of the original employer. There are many intellectual property ownership disputes arising from resignation or collaborative research and development in China. After a ownership dispute occurs, the original holder or registrant of the right may sometimes take actions such as not paying patent annual fees or voluntarily giving up the right, resulting in the invalidation of the right. These actions actually infringe on the property rights of the actual right holder and may face compensation.

2、 Case analysis: During the period of patent ownership dispute

Compensation for damages caused by failure to fulfill the obligation of good management

(2019) Supreme People’s Court Announcement No. 424 publicly disclosed a case of “compensation for damages caused by failure to fulfill the obligation of good faith management during a patent ownership dispute”. The basic facts of the case are: the patent involved in the case completed by the inventor (defendant in the original trial) is the service invention of the plaintiff in the original trial, and the applicant of the patent involved (the registered patent owner at the time of patent authorization) is a certain research institute and a certain company, with an application date of September 28, 2009 and an authorization date of May 30, 2012. After the patent application was discovered by the plaintiff, they filed lawsuits for patent application ownership disputes in 2010 and 2011 respectively. In the ongoing second lawsuit, a research institute and a company, as registered patent owners, failed to pay the second annual fee after the patent was granted, resulting in the termination and invalidation of the patent on September 28, 2012.

3、 Court Judgments and Legal Reflections

Therefore, both the first instance court and the Supreme People’s Court ruled that a certain research institute and a certain company should make economic compensation to the plaintiff. The Supreme Court believes that during a patent ownership dispute, if the registered patent holder intentionally fails to pay the patent annual fee, resulting in the termination and invalidation of the patent right, and the actual right holder cannot obtain the patent right, this is actually causing property losses to the patent holder and is an infringement of the actual right holder’s property, and compensation should be given.

However, in this case, the Supreme People’s Court recognized the compensation amount of 500000 yuan (including economic losses and reasonable expenses) in the first instance judgment. The reasons supporting the first instance judgment include “neither party provided evidence to prove the market price of the patent right at the time of termination and expiration” and “the plaintiff also had certain negligence”. Perhaps the losses suffered by the plaintiff due to the loss of the patent rights for the service invention, which resulted in the technology becoming public technology, would be far greater than 500000 yuan, but we can only analyze the issues we need to pay attention to from such precedents.

The level of intellectual property protection in our country may need to be further improved, otherwise dishonest behavior cannot be curbed and an honest market order cannot be established; In addition, as the plaintiff (actual rights holder), it is indeed necessary to actively pay attention to the legal status of intellectual property rights or take other effective measures in case of ownership disputes.

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