When is the temporary protection period defense applicable

For ease of reading, the names of the companies involved in the case involving the defense of the temporary protection period have been changed to A, B, and C.

Company A is the patent owner of the patent number 201510465803.9 and the name “tank container assembly table and assembly method”. During the temporary protection period of the patent, Company B purchased the tank container assembly table that was alleged to be infringing and used the assembly table to manufacture tank container products, and continued to implement it after the patent was authorized. Company A filed a lawsuit on the grounds that Company B infringed its patent rights. Company B claimed that it did not infringe on the grounds that ① when it purchased the alleged infringing product, the patent involved was still in the temporary protection period, and ② it was purchased at a reasonable price and had a legal source.

The case was finally judged by the The Supreme People’s Court of P.R.C. (SPC), and Company B compensated Company A for economic losses of 4.9 million and other reasonable expenses for rights protection, and borne the case acceptance fees, etc.

What is the provisional protection period defense？

According to the Chinese Patent Law, the provisional protection period defense refers to the period between the publication of the patent application and the granting of the patent right, if someone implements the technical solution protected by the patent application, then after the patent is formally granted, the patent owner can require the implementer to pay appropriate fees as compensation during the provisional protection period. However, the implementer can use the provisional protection period defense to claim that he has taken sufficient measures to avoid infringement or has paid reasonable fees for the technical solution during the period from the publication of the patent application to the granting of the patent right, thereby reducing or exempting his liability for compensation.

Decision on the defense of the temporary protection period of patents

Company B shall stop using the infringing assembly table and the assembly method of producing tank containers using the assembly table, and stop promising to sell or selling tank container products directly obtained by the method.

Why?

Company B’s claim of non-infringement based on legitimate source is not tenable. According to the content of the judgment:

1. Article 70 of the Patent Law provides:

“If a person uses, promises to sell or sells a patent infringing product for production and business purposes without knowing that the product was manufactured and sold without the permission of the patent owner, he shall not be liable for compensation if he can prove that the product has a legal source.”

The legal source defense is a defense to exempt from liability for compensation and is a specific embodiment of the system of protecting good faith third parties in the Patent Law. The legal source defense is applicable to users, sellers, and promises of sales of patent infringing products, including the use, promise to sell, and sale of patent infringing products or the use, promise to sell, and sale of products directly obtained according to the patented method, but not the use of the patented method. The legal source defense does not apply to the use of patented methods, and the legal source defense should not be applied to the infringement of the use of patented methods beyond the provisions of current laws and judicial interpretations.

2.If the defense of legitimate source of method is supported, the interests of patent owners will be excessively damaged

As mentioned above, in terms of patent infringement products, the defense of legitimate source is essentially limited by the physical conditions of the product, and the accused infringer cannot permanently implement the patented technical solution. Supporting the defense of legitimate source of patent infringement products will not excessively damage the interests of patent owners; as for the infringing use of patent methods, in principle, there is no such limitation based on the physical conditions of the product. Once the defense of legitimate source is applied to the infringing use of patent methods, the accused infringer will be able to permanently implement the patented technical solution, thereby excessively damaging the interests of the patent owner.

3.The legitimate source defense of patent-infringing products cannot extend to the infringement of the patented method by using the patent-infringing product

The extension of the protection scope of product patents and method patents is different. The protection scope of method patents can extend to products directly obtained according to the patented method, but the protection scope of product patents only extends to the product itself and not to the method used by using the patented product. The legitimate source defense of patent-infringing products is essentially a restriction on the protection scope of patent products. When the protection scope itself does not extend to the method used by using the patented product, the legitimate source defense cannot extend to the relevant infringement of the patented method.

The underlying reason why “the protection period defense cannot cover patent methods”

The legal analysis of “the provisional protection period defense cannot cover the patent method” includes two aspects.

First, the concept of using a patent method is different from that of using a patent product. If the method of using a product falls within the scope of protection of the method claim, even if the product does not infringe, the act of using the method is still an infringement.

Second, if the accused infringing products and methods are both subject to the provisional protection period defense and do not constitute infringement, the protection of the patent rights of such production methods and equipment will be in name only. Infringers will easily form a conspiracy, and once the patent application is made public, they will immediately manufacture and sell the equipment. At this time, they only need to pay a very low and reasonable fee to the manufacturer, while the equipment purchaser can unscrupulously use the patented device to implement the patented method to manufacture infringing products.

The author believes that the current domestic law is not strong enough for the temporary protection of patents, especially it does not clarify how to calculate the “appropriate fees” to be paid during the temporary protection period. Filling the gap here is conducive to protecting and encouraging technological innovation.

Risks of the temporary protection period defense

Using infringing equipment or methods constitutes infringement, so companies should pay great attention to patent infringement risks during the procurement process. It is recommended to conduct patent searches and due diligence before purchasing, sign clear intellectual property protection clauses, and consult patent agents or intellectual property agencies to ensure that procurement activities are legal and compliant and avoid infringement risks.

Original link:The provisional protection period defense is only for patented products, and the method still constitutes infringement | Enterprise procurement risk reminder

About us:Shanghai Bulu Intellectual Property Agency LLP