A Preliminary Study of the Legal Nature of Prior Art Defense - A Discussion of Article 62 of the New Patent Law

2010/2/10By Sun Hailong and Yao Jianjun,[Patent]

[Synopsis]
The prior art defense, if proven, is a complete defense against patent infringement allegations under Article 62, as amended, of the Patent Law product. However, the law does not give further guidance as to whether the prior art defense is an affirmative defense or an escape clause exception to infringement liabilities. The authors believe that the introduction of the prior art defense in the Patent Law never means there are no restrictions on the defense. The infringement determination must focus on the claims of the patent. If the alleged infringing product falls within the protective scope of the patent, after being compared to the patent claims, then there is room for applying the prior art defense. The defense, by its very nature, constitutes an infringement exception.
 
I. The Question is Raised
The prior art defense has already been commonly accepted in judicial practices of China. However, it has been seldom included in any provisions of law. The Several Provisions of the Supreme People’s Court on Law Application Issues in Judging Patent Infringement Dispute Cases of 2001 is one of a few that touches upon this issue, in which Article 9 Provisions provides that litigation may proceed if a defendant proffered sufficient evidence showing that its technical solution is in the public domain in infringement cases involving a utility model or design patent. This article can be interpreted to mean that the judicial organ of China accepts and acknowledges the existence of the prior art defense. The recently amended Patent Law effective on October 1, 2009 (the “new Patent Law”) clarifies the connotation of prior art, by adding the prior art rule to Articles 22 and 62. Article 22.5 of the new Patent Law provides that “the ‘prior art technology” here means the technology that has been made to the public domain in China or in a foreign country before the application date.” Article 62 provides that “In patent infringement cases, if an alleged infringer can show by evidence that he is practicing prior art in his technology or design, product no infringement shall be found.” Being an affirmative defense under these provisions, and positively a statutory non-infringement, the prior art defense, however, begs further support for its legal status. Is the defense a non-infringement defense, or an exception to infringement liabilities? What  if the alleged infringing product falls within the protective scope of the patent and is it a prior art? Or, is it both? This paper is going to analyze the legal nature of the prior art defense, in order to invite criticism from other scholars and experts.
II. Infringement Determination and Nature of the Defense
The protective scope of a patent is determined by its claims. Article 56.1 of the Patent Law provides that the protective scope for an invention or utility model patent should be defined by the claims, and the description and drawings may be used to interpret the claims. That is, the protective scope should be defined by the claims, and the original meanings of the claims should be interpreted using the patent documents.
The infringement determination can be divided into two steps: first, the protective scope is ascertained; and second, a comparison is conducted between the properly construed patent and the alleged infringing product. The alleged infringing product constitutes infringement if it falls within the protective scope and if it does not constitute an exception under law. The alleged infringer has two ways to prove that the alleged infringing product is not infringing. He or she may do this by trying to prove that the alleged infringing product does not fall within the protective scope, or by trying to prove that the alleged infringing product that falls within the protective scope is an exception under the law and therefore, should be deemed as non-infringing.
If the alleged infringing product is proven not to fall within the protective scope, the alleged infringer can rest easy. This will be the best result for the defense. Such defense is referred to as a “non-infringement defense” in the patent law theory. But, it will be more difficult to prove that the alleged infringing product is an exception under the law. The alleged infringer has to find applicable legal exceptions, because the non-infringement defense is not successful, that is, he or she has acknowledged that the alleged infringing product falls within the protective scope. Article 11 of the Patent Law provides “after an invention or utility model patent is granted, no entity or individual shall appropriate the patent without permission from the patentee, unless in circumstances otherwise stipulated herein.” The “circumstances otherwise stipulated herein” are the four circumstances that are not deemed as infringing under Article 63 of the Patent Law (or under Article 69 of the new Patent Law). In this case, such defense is referred to as a “defense of infringement exception” in the patent law theory.
Article 62 of the new Patent Law introduces the “defense of prior art technology” and the “defense of prior art design.” However, is the “defense of prior art technology” or the “defense of prior art design” a non-infringement defense or a defense of infringement exception?
 
III. Impact on the Grounds for Determining Infringement
In the traditional infringement determination case, usually the patent claims are compared with the alleged infringing product to determine whether the latter falls within the protective scope. The comparison is limited to the patent claims and the alleged infringing product. However, the introduction of the prior art defense definitely causes a material change to this practice. The impacts are detailed as follows:
1. From Rejection to Gradual Acceptance
Since the patent system became effective, China has transformed itself from the early approach of “rejection” to the latter “conditional acceptance” of the prior art defense. After the new Patent Law becomes effective, the prior art defense will be confirmed in law. This is very significant to unify the judicial measurements.
The court is the arbiter when a patent enters the enforcement stage. Because the patent has been granted and because the patented technology cannot overlap with prior art, the focus should be on patent claims when comparing the alleged infringing product to the patent, in order to examine if the alleged infringing product falls within the protective scope without the need of having a prior art defense. For this sake, it was reasonable that the prior art defense was not allowed in the early days of the patent system in China. However, it is certainly possible that due to various limitations in the patent system for a patent to be improperly granted to a product that was prior art. It is well known that due to the separation of powers and responsibilities, the court cannot have its say on whether an alleged infringing product constitutes prior art. The responsibility specially resides with the patent examination and approval authority. Thus, the Answers of the Supreme People’s Court to Several Questions from Judging Patent Dispute Cases in December 1992 provides that “after accepting a case of invention or utility model patent infringement, the People’s Court shall, when servicing the copy of the complaint to the defendant, inform that the defendant may file an invalidation request with the Patent Reexamination Board during the period of response if he or she intends to invalidate the patent concerned. If the defendant files an invalidation request during the period of response, the People’s Court should stay the proceedings.” This provision indicates that the court may positively stay the proceedings by taking advantage of the invalidation request of the defendant, to wait for the conclusion from the patent authority. It is a judicial deference to the administrative authorities.
The authors believe it was very fitting for the Supreme People’s Court to make the provision. This was because, at the time, the patent system had just recently become effective and almost all the lower courts lacked the experience to judge patent related cases. It was safe if the prior art was universally determined by the State Patent Office. Considering the legal procedural interests of the defendant, the judicial interpretation required the court to exercise its interpretational powers, that is, to inform the defendant that he or she may have the patent invalidated by “[filing] an invalidation request with the Patent Reexamination Board... during the period of response.” Once the defendant files the invalidation request, the court should immediately order a stay of the proceedings, pending conclusion from the patent authority.
In its judicial interpretation No. 21 in 2001, the Supreme People’s Court seemed less strict on the prior art defense, considering the more than ten years of experiences that the lower courts had obtained in patent judgment. However, the Higher People’s Court of Beijing City remained cautious with the use of the prior art defense. It said that in the prior art defense, only a single comparison document or an “obvious and simple combination” of two or more documents could be used as the comparison for prior art. This indicated that the lower courts were still unwilling to be overly involved in the complex determination of prior art. They could only accept the prior art defense when the prior art was very obvious.
2. Change in the Comparative Relationship
Usually, the infringement determination compares the patent claims with the alleged infringing product. If the alleged infringing product does not fall within the protective scope, the conclusion is that the alleged infringing product does not constitute infringement. If it does fall within the protective scope, the further examination is whether it contains any legal exceptions. If the answer is negative, it constitutes infringement. The comparative relationship, however, is made obviously more complex upon introduction of the prior art defense. This is because the influence of the prior art must be considered in addition to the patent claims and the alleged infringing product. Thus, the court faces three comparative relations.
Assume that the patent is A, the alleged infringing technical scheme is B, and the prior art is C. The first comparative group contains A and B. This comparison is made by presuming that the patent is a valid patent. This is one of the fundamental tasks of the court in common infringement proceedings. The second comparative relationship is A to C. This compares the patent to the prior art. Usually, the Patent Reexamination Board is responsible for the comparison. The court, which does the comparison, challenges the validity of the patent in some sense. The third comparative relationship is B to C. If the alleged infringing technical scheme is proven to be equivalent to the prior art, the court can conclude there is no infringement. In this relation, the comparison is not related to the patent or its validity or invalidity. Instead, it can only prove whether the alleged infringing technical scheme is the prior art. It does not work to challenge the patent.
Should the court use all of these comparative groups, avoid them or prioritize some of them? For example, does the court have the authority to make a comparison of the patent and the prior art, or to give first priority to the comparison of the alleged infringing technical scheme and the prior art? Different answers will reflect one’s different understandings of the legal nature of the prior art defense.
IV. Its Legal Nature Clarified
Article 60 of the new Patent Law defines a common infringement behavior as an act appropriating a patent without permission from the patentee. Article 69 provides four infringement exceptions. Article 62, which relates to the prior art defense, is placed between the above two articles. Is the prior art defense a non-infringement defense, an infringement exception, or both? This is not clarified by the legislators, nor can an answer be found from the setting of the articles of law. The authors probe in the nature of the prior art defense as follows.
1. If the Prior Art Defense-Related Comparison is Done First
If the prior art defense is concerned in the infringement proceedings, the court must prioritize the application of the above three comparative groups. In its Letter on the Patent Infringement Dispute Case of Wang Chuan v. Hefei Jichu Trade Co., Ltd., et al, the Supreme People’s Court noted that “no matter whether the technology of Shendian Company is identical with the patent of Wang Chuan or not, when Shendian Company raises the prior art defense, the comparison should be done between the technology of Shendian Company and the prior art it raises and then, if the conclusion is negative, another comparison should be done between the technology of Shendian Company and the patent of Wang Chuan.”
From this it appears the Supreme People’s Court is in the view that the prior art defense related comparison, that is, the third group comparison, should be done first. The conventional comparison between the alleged infringing product and the patent claims, as in the first group, should not begin, unless and until the prior art defense cannot be established. Admittedly, whether the alleged infringing product falls within the protective scope should be determined on two sides. One is the positive side, that is, to examine whether the infringing product falls within the protective scope when the protective scope is defined. The other is the negative side, that is, to examine whether the infringing product falls within the prior art and if the answer is positive, it must fall outside the protective scope.
It would be better to do the prior art defense-related comparison first, because, in this case, the protective scope does not need to be defined at the very beginning. It would also be easier to compare the alleged infringing product with the prior art. If the result is that the alleged infringing product falls within the prior art, it indicates that the prior art defense is a non-infringement defense by its very nature. However, if the prior art defense is not established, another comparison will have to be done between the alleged infringing product and the patent claims. It should be noted that, in this case, if the alleged infringing product does not fall within the protective scope too, the prior art defense is still a non-infringement defense.
2. If the Comparison Between the Patent and the Alleged Infringing Product is Done First
If the comparison between the patent and the alleged infringing product is done first, the question becomes whether the alleged infringing product falls within the protective scope as defined. If the alleged infringing product does not fall within, but without the protective scope, it can be concluded as non-infringing. In this case, the prior art defense is still a non-infringement defense. Conversely, if the alleged infringing product falls within the protective scope and if the defendant raises the prior art defense, then, another comparison is needed between the alleged infringing product and the prior art. If the defendant proves that the alleged infringing product is the prior art, it indirectly proves that the alleged infringing product falls without the protective scope of the patent, as the prior art must be without the protective scope. In this case, the prior art defense turns out to be a defense of infringement exception.
3. Advantages and Disadvantages of the Above Priorities
Theoretically, the conclusion should always be the same, no matter whether the prior art defense-related comparison or the comparison between the patent and the infringing product is done first. It should be impossible for different judgments to be made due to different prioritizations of the comparisons. However, considering procedural efficiency, one prioritization may be more economical and thus superior to the other.
The proponents of the prior art defense priority argue that if the prior art defense related comparison is done first and if the result is that the alleged infringing product falls within the prior art, a non-infringement conclusion can be reached. Thus, the comparison between the patent and the alleged infringing product can be omitted and the related judicial resources can be saved.
In its replies to some cases, the Supreme People’s Court gave first priority to the use of the prior art defense-related comparison. This might be because it intended to make it easier for the lower courts to judge the cases in terms of the procedure. It is true that a non-infringement conclusion can be reached if the alleged infringing product falls within the prior art. However, if the alleged infringing product does not fall, the other comparison or comparisons will still be necessary. Therefore, how to prioritize the remaining comparisons must be considered. Similarly, it is possible that the comparison between the patent and the alleged infringing product cannot define whether the alleged infringing product falls within the protective scope. Thus, the remaining comparison or comparisons may still be needed.
From the above, one can find that the above two prioritizations will take almost the same time in terms of procedures. The prior art defense priority may not always lead to a higher procedural efficiency.
4. The Court’s Authority to Compare the Patent with the Prior Art
In the legal field, the court may not compare the patent with the prior art. It is believed that the comparison between the two is one of the responsibilities of the patent examination and approval authority. The patent examination and approval authority may directly determine and conclude whether a patent application or patent is patentable or not, but the court should not work in the same way in its judgment.
However, it should be noted that in judicial practice, the rule has been broken through that the court may not determine a right that resides traditionally with administrative proceedings. Instead, the court directly decides the validity of a patent in the main body of its judgment in order to shorten the trial period. For example, in Judgments No. 67 and 68 [Gao Zhi Zhong Zi] (1999) of the Higher People’s Court of Beijing City, the Patent Reexamination Board was ordered to invalidate all the patents involved in three months of the judgments. In another judgment, the same court directly announced the invalidity of the patent involved. These judgments show that the court decided directly on the disputed issue, without following the administrative procedure to examine the lawfulness of the specific administrative acts.
As the authors believe, in patent infringement proceedings involving the prior art defense, the court should not, for whatever causes, try to avoid comparing the patent with the prior art raised by the defendant. However, the comparison should be based only on the existing evidential materials. In most cases it can function to reflect or check the other two comparisons and to justify the conclusion. Therefore, no limitations should be set upon it, nor should it be made a forbidden zone to the court, since it helps the court find the facts of the case. But, it should be noted that as China is a continental law country, the court may not, in civil proceedings, directly decide on the validity of a patent, nor conclude that a patent is invalid on the grounds of the result of the comparisons.
It should also be noted that in infringement litigations in the United States, the court is restricted when comparing the patent with the prior art, despite that the court may assess the validity of the patent or even announce its invalidity. In September, 2008, in Egyptian Goddess v. Swisa, the United States Court of Appeals for the Federal Circuit pointed out that “we emphasize that although the approach we adopt will frequently involve comparisons between the claimed design and the prior art, it is not a test for determining validity, but is designed solely as a test of infringement.”
From this, one can see that as long as the validity of the patent is not concerned and as long as it helps determine infringement, the court should not be forbidden from comparing the patent with the prior art.
V. The Legal Significance to Explore its Nature
Because the same conclusion will be reached, no matter whether the prior art defense-related comparison or the comparison of the patent and the alleged infringing product is done first, some may argue that it does not have any practical meaning to explore the legal nature of the prior art defense. However, the authors disagree with this position. The patent infringement action is a special civil action, in that the existence of the patent is the basis and precondition. If the patent does not exist, the patent infringement action will not exist. And, the infringement determination is a proceeding or activity focused on the patent claims, as clearly defined by the patent law of China.
When the first group comparison above is done first, as between the patent and the alleged infringing product, it represents the idea that the patent claims are the center of an infringement determination. The result is that the alleged infringing product “infringes”, “does not infringe”, or “is deemed as not infringing” the patent. No matter whether the infringement is established or not, the patent claims are used as a reference in the comparison. Even if the alleged infringing product is deemed as not infringing, it still indicates that the alleged infringing product falls within the protective scope and then is included in the prior art. In so doing, it has an advantage – it respects the basis of the patent, and embodies the freedom of the public to normally appropriate the prior art.
Therefore, as the authors believe, it complies with the jurisprudence to focus on the patent claims and do the first comparative group first. When the prior art defense-related comparison, as in the third group above, is done first, it focuses on the prior art and deviates from the rule that the protective scope is defined on the patent claims. As this comparison does not include the patent, the non-infringing conclusion, if reached, will go against the principle that a patent shall be “presumed valid.”
The following case offer further enlightenment. In He Weibin v. Wenzhong Electronic Co., Ltd. for patent infringement dispute, the court and He Weibin held totally different views on the application of the prior art defense and the relevant comparative methods. The Intermediate People’s Court of Wenzhou City, as the court of first instance, analyzed and compared the alleged infringing product to the patent claims, holding that the alleged infringing product fully covered all the technical features of Claim 1 of the patent. But, in the judgment, it stated that “it would be unnecessary to compare the alleged infringing product to the patent, if prior art technologies are used in the alleged infringing product.”
The court of second instance held that when the defendant raised the prior art defense, the court should not only compare the technologies of the alleged infringing product to the prior art to examine whether the technologies were disclosed in the comparison document, but, when the two contained different technical features, should go on to find whether the differentiating technical feature of the alleged infringing product was closer to the relevant patent technology or the relevant prior art technology.
In the case, although the court of first instance held it “unnecessary to compare the alleged infringing product to the patent if prior art technologies are used in the alleged infringing product,” both the first and second instance courts compared the patent with the alleged infringing product. In particular, the court of second instance stressed that if the technical feature of the alleged infringing product was different from the comparison document, another comparison should be done to see whether the alleged infringing product was closer to the patent or the prior art.
This “closer” theory, as raised by the court of second instance, can be traced back to 2002 where a judge stated, “when the principle of free public domain technology is applied, it will be easier to determine and dispose of the alleged infringing technology that is fully equivalent with the free public domain technology. However, it will be more difficult to deal with the alleged infringing technology that lies between the prior art technology and the patent.” For the challenge, the judge offered the following solution: “the patent, the alleged infringing technology, and the free public domain technology should be compared to each other at the same time. If the alleged infringing technology is closer to the patent, an equivalent infringement can be determined; if the alleged infringing technology is closer to the free public domain technology, a defense of free public domain technology can be established.”
As this ‘closer’ theory requires that “the patent, the alleged infringing technology, and the free public domain technology should be compared to each other at the same time,” it somewhat confirms that the patent claims should be focused upon. Its defect, however, lies in the dichotomous approach, that is, it believes that the alleged infringing product is either the patent or the prior art. It disregards that fact that the alleged infringing product, which is closer to the patent, can still fall within the prior art. Therefore, which claim the alleged infringing product is closer to is not important. It is essential to always focus on the patent claims. The misconception of the “closer” theory can be avoided with the clarification that the prior art defense is an infringement exception by its very nature.
VI. Conclusion
The patent infringement action is a civil action focused on the patent claims. The introduction of the prior art defense system cannot go against the basic rule to focus on the patent claims. For this sake, the prior art defense should not be allowed to have first priority. The contrary can also be proven. If the prior art defense is given first priority and if the defense is finally established, there remain two possibilities – the alleged infringing product falls without or within the protective scope of the patent. If the alleged infringing product falls outside of the protective scope of the patent, it must be concluded as “non-infringing”. As a result, the so-called “prior art defense” is the non-infringement defense de facto. It becomes unnecessary to name it the “prior art defense.” On the other hand, if the alleged infringing product falls within the protective scope of the patent, and if no legal exception is applicable, it should be concluded as “infringing.” However, since the new Patent Law provides for the prior art defense, the alleged infringer may still escape the infringement with the defense. In this way, the prior art defense constitutes a legal exception.
To sum up, the prior art defense is a defense of infringement exception by its legal nature. The infringement determination must focus on the patent claims. There will be no room for applying the prior art defense unless and until the alleged infringing product falls within the protective scope after compared with the patent claims. The idea to give first priority to the prior art defense disregards the fact that the prior art defense is an infringement exception, leaving confusion among basic concepts of patent law. As the authors believe, the introduction of the prior art defense into the new Patent Law does not mean there are no restrictions on the defense. At least, it is reasonable to restrict the prior art to “only a single comparison document or an ‘obvious and simple combination’ of two or more documents”. As we can expect, judicial interpretation will be needed for the limited scope of the prior art defense, after the new Patent Law comes into force.
 
(Sun Hailong, a standing member of the Adjudicatory Committee of the Higher People’s Court of Chongqing City; and 
Yao Jianjun, Chief of the Research Office, the Intermediate People's Court of Xi’an City)
 
 
 
 

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