The Supreme People's Court pointed out in an administrative appeal case that, in disputes over the authorization and validity determination of design patents, the term "legitimate rights" as stipulated in Article 23, Paragraph 3 of the Patent Law should not be narrowly interpreted. Generally, any rights or interests that are legally enjoyed, have been acquired before the application date of the present patent and remain valid at the time of filing a request for invalidation should be included.
This article involves a decision on examination of a request for invalidation, and the brief summary of the prosecution procedure is as follows:
Natural person M is the patentee of a design patent named "Beer Can" (hereinafter referred to as "the present patent"). The application date of the present patent is May 28, 2018, and the announcement date of authorization is December 18, 2018. This design prominently features the text "V8" on the can body.
Beer Company A is the holder of the registered trademark "V8," with an application date of December 30, 2016; a preliminary approval announcement date of July 27, 2018; and a registration date of October 28, 2018. Company A requested the China National Intellectual Property Administration (CNIPA) to declare the present patent invalid on the grounds that it is not in conformity with Article 23, Paragraph 3 of the Patent Law. The CNIPA issued a decision on the examination of the request for invalidation in question, upholding the validity of the present patent.
Company A, dissatisfied with the decision, filed a lawsuit with the court of first instance.
The court of first instance rendered the first-instance administrative judgment: dismissing Company A's lawsuit claims. The first-instance court held that a certain beer company only acquired the exclusive right to the registered trademark "V8" from the date of approval of registration, which is later than the application date of the present patent. On the application date of the present patent, the trademark "V8" had not yet been approved for registration and thus did not represent an exclusive right to a registered trademark prior to the application date of the present patent, nor would it constitute a prior right conflict with the present patent. Furthermore, Company A's trademark "V8" is a simple combined trademark of letters and numbers and does not fall within the subject of protection of the present patent. The patentee of the present patent does not have rights over the text "V8" itself and, therefore, does not conflict with others' legitimate rights over the text "V8" itself.
Company A, dissatisfied with the judgment, filed an appeal.
The Supreme People's Court rendered a final judgment: 1) revoking the administrative judgment of the court of first instance; 2) revoking the aforementioned decision on the examination of the request for invalidation by the CNIPA; 3) ordering the CNIPA to re-issue an examination decision.
In its effective judgment, the Supreme People's Court held that the focal issue of dispute in the second instance of the present case was whether the present patent conflicts with legitimate rights acquired by others before the application date, i.e., whether the present patent violates Article 23, Paragraph 3 of the Patent Law.
The legislative intent of Article 23, Paragraph 3 of the Patent Law, stipulating "Any design for which patent may be granted must not be in conflict with the legitimate right obtained before the date of filing by any other person", is to prevent the exploitation of a design patent from conflicting with others' prior legitimate rights. Any situation where the exploitation of the design may infringe upon the prior rights of others falls within the scope of regulation stipulated by this article. Therefore, in adjudicating disputes over the authorization and validity determination of design patents, the term "legitimate rights" as stipulated in Article 23, Paragraph 3 of the Patent Law should not be narrowly interpreted. Generally, any rights or interests that are legally enjoyed, have been acquired before the application date of the present patent and remain valid at the time of filing a request for patent invalidation should be included. Trademark rights are among the legitimate rights acquired prior to the application as referred to in Article 23 of the Patent Law. Trademarks can be classified into registered trademarks and unregistered trademarks. Trademark holders have exclusive rights to their registered trademarks in accordance with the law and also have legitimate interests in their unregistered trademarks that have become associated with them through use and actually serve to distinguish the sources of goods or services. The first-instance judgment directly concluded that a design patent containing text would not result in a rights conflict with others’ legitimate rights and interests over the text itself, on the grounds that the specific content of the text does not fall within the scope of protection for designs. This reflects an overly rigid interpretation and application of the law, deviating from the legislative intent underlying the provisions on rights conflicts.
In this case, the prior rights claimed by Company A include the prior interests enjoyed from the prior use of the "V8" logo. If the text contained in a design patent is identical or similar to a prior trademark logo, and both are used on identical or similar goods, the exploitation of the design patent may cause confusion or misidentification among the relevant public. In such cases, the exploitation of the design patent may infringe upon the legitimate rights of the trademark holder, resulting in a conflict between the design patent and the exclusive right to the registered trademark. In this case, Company B, the predecessor of Company A, had been using and promoting the logos "Dali Beer V8" and "Dali V8" on its beer products for 12 years prior to the application date of the present patent, achieving high recognition and influence. Consumers had come to construe "Dali Beer V8" and "Dali V8" as the “V8” beer of a certain company in Dali, thereby gradually establishing a specific connection between the "V8" logo and that company. Moreover, M resides in the primary sales area of this beer, creating an objective possibility of imitating or replicating the prior trademark logo. The exploitation of the present patent may cause the relevant public to mistakenly believe that the goods originate from Company A, thereby infringing upon the legitimate prior interests enjoyed by Company A due to the prior use of the "V8" logo and resulting in a conflict between this patent and the prior interests held by others.
Through the aforementioned judgment, the Supreme People's Court has elucidated the correct interpretation of "the legitimate right obtained before the date of filing by any other person" as stipulated in the Patent Law regarding design patents, indicating that the legislative intent underlying the provisions on rights conflicts should be considered, and the provisions should not be narrowly interpreted, which holds significant guiding importance.
(2023) Zui Gao Fa Zhi Xing Zhong No. 42
If you have any question about the protection of intellectual property rights, please feel free to send us emails. For patent-related matters, please send to info@afdip.com. For trademark/litigation/legal matters, please send to info@bhtdlaw.com.
