“YULIN IP OFFICE” ADMINISTRATIVE PROCEDURE FOR UTILITY MODEL PATENT INFRINGEMENT

◆ Docket: (2017) ZuiGaoFaXingZai No 84

CASE 20 :

City of Beijing

[Headnotes]

On improper procedure in patent enforcement handling, the Supreme People’s Court clearly indicates that a member of the panel, having been replaced but signs on the administrative decision, is serious violation of the legal procedure, akin to “trier not deciding and decider without trial.”

[Synopsis]

Plaintiff: Xixia LongCheng Special Materials Co., Ltd. (Xixia)

Defendants: Shenmu Tianyuan Chemicals Co., Ltd. of Shanxi Coal and Chemicals Group (Tianyuan); Yulin IP Office

Xixia requested with Yulin IP Office for patent infringement of its utility model patent for “External heating internal coal decomposing equipment” (the patent) by Tianyuan. On September 1, 2015, Yulin IP Office made its Decision on Patent Infringement Dispute under reference YuZhiFaChuZi (2015) No. 9 (the Administrative Decision) finding no infringement of the patent by Tianyuan. The panel making the Decision under review included a member GOU Hongdong who is a staff member of Baoji IP Office, who is on no official document to participate in the administrative handling of the dispute, nor did Yulin IP Office record of oral examination indicate GOU Hongdong’s official position or the reason of his participation being informed of Xixia or Tianyuan. Besides, Yulin IP Office conducted two oral trials, in the second of which, the parties were informed that it was a different panel from the one signing on the Decision. 

The court of first instance found that administrative enforcement staff members being transferred within administrative system is not in violation of the internal rules. Because of shortage of workhand at Yulin IP Office, asking a member from Baoji IP Office, with approval of Shanxi Provincial IP Office, is all but inappropriate, and violating no legal procedures. The noninfringement is not inappropriate on the merit, either. The court therefore dismissed Xixia’s complaint. Dissatisfied, Xixia appealed which was affirmed. Xixia petitioned the Supreme People’s Court for reconsideration.

Upon certiorari, the Supreme People’s Court found that the Decision was in violation of proper procedure and should be vacated. First, as an arbitor of patent infringement, it should have followed the procedural principles of being careful, proper, open and fair. However, when a panel member has been changed, he still signs the Decision, it is a significant and serious violation of the legal procedure. Besides, the panel making the administrative decision should be composed of qualified staff members. Otherwise the administrative enforcement procedure would be a joke, guaranteeing no standardized law enforcement, and enhancing no responsibilities. The so-called approval from Shanxi Provincial IP Office is merely an internal opinion certified to the leaders, without reference, without seal. The SIPO reply to Shanxi Provincial IP Office on the issue of Transferring Staff Member in Certain Cases was made after the Decision and had nothing to do with it, and could be the legal and effective authority for GOU Donghong’s participation in the panel. Still further, Yulin IP Office’s evidence is insufficient to support its assertion that it has informed the parties of GOU Donghong identity and his reason for participation, as the parties’ recognition of a panel member is not the premise or condition for proper procedure. Therefore it gives no legal validity when Yulin IP Office and Tianyuan asserted that “Xixia did not object to the composition of the panel.”

[Judge’s Comment]

This case relates to violation of proper procedure in administrative process. The Supreme People’s Court clearly indicates in this case that a replaced panel member who signs on the Decision is in essence “trier not deciding, decider without trial,” a serious violation of the legal procedure. In principle the panel making the administrative decision must be composed of qualified members. If an outside member is needed to sit in the case, he must go through official and proper procedures. This case effectively enforced procedures for law enforcement authorities, prominently emphasizes the judicial role in protecting intellectual properties, and a typical example of carrying out the Opinions on Several New Issues of Reform and Innovation in Strengthening Intellectual Property Trials, having significance in promoting improvement in IP laws and betterment of legal environment for science and innovation.

（Translated by ZHENG Xiaojun)