Supreme People’s Court Clarifies Design Patent Infringement Determination

16 October 2012

A number of automobile design patent infringement cases have been brought to Chinese courts in recent years, such as Honda v. Hebei Shuanghuan, FIAT PANDA v. Great Wall PERI, Neoplan v. Beijing Zhongtong Xinghua Automobile Selling Co., Ltd., et al. The hallmarks of these cases are not only the high value of the damages claimed and the importance of the outcomes which are dispositive to the market structure, but also the malleability of rule of law in the field of design patent infringement determination.

Applicable Rules

To infringe, an accused design must be identical or substantially identical to the design patent. The PRC Supreme People’s Court provided instruction in its Interpretation on Some Issues Concerning the Application of Laws to the Trial of Patent Infringement Disputes (Patent Judicial Interpretation) in January 2010:

Infringement of a design patent requires that the infringing design appears substantially the same as the patented design in the eye of an ordinary beholder. Further, when determining whether a design is substantially identical, the ordinary beholder must make a “comprehensive judgment”, based on the design feature(s) of each design, in view of the overall visual effect of the design.

Comparison of designs between the references of prior arts and the design patent is also made during the invalidity claim process. As there is no substantive examination on a design patent before it is granted, comparison will not occur in the patent filing and prosecution process. The Patent Examination Guidelines (2010) provides that the inquiry of whether two designs are identical or substantially identical should be judged in the eye of an “ordinary consumer.” If in the view of an ordinary consumer, the existing distinctions between designs are sufficient to have a notable influence on the overall visual effect of the designs, then the designs are not considered identical or substantially identical with each other.

However, neither the Patent Judicial Interpretation nor the Patent Examination Guidelines provide further insight into what should be considered when making a “comprehensive judgment” of the overall visual effect. The abstraction of such concepts and the hypothesis of a fictional beholder make construing and demarcating a design patent and comparing it with the prior art references and/or the accused design one of the most challenging enterprises in the patent law.

The popular view is that minor changes in parts or even the combination of several sectional differences do not materially impact the overall visual effect of the design and thus will not distinguish one design from the other. This approach might overlook sectional characteristics which would be outweighed by an overall appearance and configuration when the latter has become common features in the industry. This was especially true in the car industry. A new model shared a substantially similar appearance or configuration as an existing and patented model but incorporated modified sectional features such as the design of the tailgate or the design of windows would not infringe the patented one.

New Development

In Honda v. The Patent Reexamination Board of the State Intellectual Property Office (2010), decided by the PRC Supreme People’s Court in November 2010 with certiorari granted to review the appropriateness of lower courts’ methodology in applying the rules in design comparison, the Court, reversing the lower court decisions, has set out further criteria in design comparison. The background is that in 2003 Honda accused Hebei Shuanghuan, claiming that the latter’s new model of S-RV infringed upon Honda’s patented design. A series of litigations were triggered in the years after 2003.

In its decision, the Court provided further insight into the “comprehensive judgment” used to determine design patent infringement. For the first time, it opined that when cars in certain categories adopt designs which have or appear to have a common configuration as a whole, this will have limited impact on the overall visual effect in the eye of an ordinary beholder for that type of car. Instead, distinctions in sectional design features such as the design of headlights, lateral view, and back view do have a notable visual effect on the design of the car as a whole. Relying on this reasoning, it finally ruled that the existence of differences in the design of features such as headlamps and side door windows have led an ordinary consumer to distinguish the patented design from prior designs. Thus, in Honda, the two designs are distinguishable.

The above opinion will with no doubt influence the determination of future similar cases. However, it is hard to say whom the criteria will favor between a patent owner and an accused infringing party. As a question of fact, the outcome of comparison will depend on the evidence of each case, not only the design patent and the accused product, but also the prior art reference. The patent will remain stable if the sectional change compared to a prior art amounts to a patentably distinct feature. And the design of a rival manufacturer changing certain sectional features of a patented design may not infringe.

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Supreme People’s Court Clarifies Design Patent Infringement Determination