Application of Administrative Mediation in Disputes concerning Patent Infringement | Dispute over “Pneumatic Tire” Patent Infringement Handled by Tianjin Intellectual Property Office | Linda Liu & Partners
Case IV of Ten Typical Cases of 2019 on Administrative Protection for Patent Rights
Case Insight
In this case, the intellectual property administrative agency gave full play to mediation, based on ascertained facts, to efficiently resolve a dispute over intellectual property rights. Further, with the petitioner being an internationally known foreign enterprise, this case embodies China’s equal protection for domestic and foreign intellectual property owners.
Case Information
Case Summary
Bridgestone Corporation (hereinafter referred to as “the petitioner”) was founded on March 1, 1931 and has become one of the world’s largest tire manufacturers. The major businesses of the petitioner cover various fields such as development, production, sale, and after-sale services such as logistics and maintenance of tires, automobile parts, and rubber products. Since its foundation in 1931, the petitioner has always upheld the philosophy of “Serving Society with Superior Quality” and provided products favored by users with diversified demands. By far, the petitioner has developed into a globally renowned multinational corporation with more than 180 production and R&D facilities in 26 countries across the world and business in more than 150 countries. The petitioner has long been devoted to the development of new products of which the quality and performance are praised and relied upon by the customers.
A patent application for invention entitled “Pneumatic Tire” was filed by the petitioner with the CNIPA on September 28, 2012, and was granted on August 17, 2016 with the patent number ZL201280046691.8. A patent application for design entitled “Tire” was filed by the petitioner with the CNIPA on January 17, 2012 and was granted on March 6, 2013 with the patent number ZL201230014431.5. Both patents were valid when the petitioner initiated the proceedings to resolve a dispute over infringement on the above patents.
The petitioner asserted that the tire company in Tianjin (hereinafter referred to as “the respondent”) produced, sold, and offered to sell, without license by the petitioner, a tire product of a model that fell within the scope of protection of the involved invention and design patents, thereby infringing the petitioner’s legal rights. In June 2019, the petitioner filed a request for resolving the patent infringement dispute before the Tianjin Intellectual Property Office, demanding that the respondent desist from producing, offering to sell, or selling the tire product that falls within the scope of the involved patents, delete promotional information of the alleged infringing product from its website, and dispose of the special production molds for producing the alleged infringing product, the stock products, and brochures for the allegedly infringing product. The respondent contended that the involved product had completely different patterns from those in the involved patents of the petitioner and did not fall in the scope of the involved patents.
The Tianjin Intellectual Property Office made the following judgment: Although the change in the pattern of the tire made by the respondent indeed affected the visual effect, the difference in appearance could not be the basis for non-infringement on the petitioner’s invention patent. Based on comparison between the allegedly infringing product and claim 1 of the involved invention patent, the allegedly infringing product was determined to fall within the scope of claim 1 of the involved invention patent. The two parties reached consensus on the fact findings during the proceedings and requested for mediation. Through several rounds of negotiations, the two parties reached a mediation agreement in October 2019 facilitated by the Tianjin Intellectual Property Office. The respondent paid the petitioner damages in the amount of RMB 300,000, deleted online information on the infringing product, and disposed of the production mold for the involved product, witnessed by the petitioner.
Attorney’s Opinion
This case was selected by the CNIPA as one of Ten Typical Cases of 2019 on Administrative Protection for Patent Rights, highlighting the application of administrative mediation in resolving patent infringement disputes.
Under Article 65 of the Chinese Patent Law, the patentee or any interested party may request an administrative authority for patent affairs to intervene against patent infringement acts. The administrative authority may mediate about the amount of damage for patent infringement, based on the request of an involved party.
Thus, China provides both administrative and judicial remedies for patent infringement disputes. The two remedies have their respective merits and demerits, and a patentee may select a more suitable one based on the specific situation and the purpose of enforcement.
In general, the greatest advantage of the administrative remedy, compared to the judicial remedy, is the speed. According to the provisions of the Patent Administration and Enforcement, the administrative authority should close a case within three months from the date of acceptance, with a one-month extension upon request for special reasons. Therefore, a patent infringement dispute can usually be resolved within 3 to 4 months through the administrative proceedings. Note that the administrative proceedings may be suspended if, for example, a patent invalidation procedure is initiated.
However, in contrast to judicial proceedings, when requesting an administrative authority to handle a dispute concerning patent infringement, the patentee cannot seek damages directly. Rather, the patentee can only seek desistance from the infringement act. Therefore, in a case where the infringement act of the infringer incurs a great loss of the patentee, and an amount of damages is desirable, the patentee still needs to file a lawsuit before a court, which often takes time and energy. Usually it takes more than a year for a case to close after two judicial proceedings.
In light of the above, an administrative mediation on damages may be a beneficial addition to the administrative proceedings. A successful mediation may save a significant amount of time and cost for the patentee. Moreover, compared with negotiations merely between the involved parties, mediation by an administrative authority is based on preliminary determination of the facts and grounds for infringement. Therefore, the involved parties may have a clearer understanding of a possible infringement decision, which may help with reaching an agreement. Nevertheless, parties in the administrative mediation are not compelled to reach an agreement. The patentee may still need to go to the court, if the infringer firmly rejects the conditions of desisting from infringement and paying damages.
In this case, our team of attorneys helped the patentee with the administrative proceedings based on adequate preservation of evidence, and the Tianjin Intellectual Property Office made a prompt response. The Office was convinced by our ample evidence and detailed infringement assessment, thus accepted our opinion that the allegedly infringing product fell within the scope of the involved invention patent, and confirmed the attitudes of both parties towards mediation. Thanks to the communications with the patentee, we gained a mediation agreement based on an estimated damage amount expected from an infringement lawsuit related to the allegedly infringing product. As a result, we achieved an early resolution of dispute, desistance from infringement, reasonable compensation, and prevention of future infringement.
