Even when a PCT application’s legal effect has terminated in all PCT members including China, a party claiming to enjoy the patent application right still has litigation interests to initiate an ownership dispute against the published PCT applicant, and the people’s court may examine such claims.
Group A claimed in litigation that: Wuxi B Company filed a patent application for an invention with the CNIPA on May 30, 2016, which was published on August 24, 2016. Group A initiated litigation over ownership of the patent application against Wuxi B Company in May 2018, claiming the said invention patent application belonged to Group A. The judgment, which has taken effective, has confirmed that this invention patent application belonged to Group A. Later, Group A found that Wuxi B Company filed another PCT application for an invention patent (the PCT application at issue), which was identical to the invention patent application in the previous case, regarding their background techniques, abstracts, claims, descriptions, and drawings, i.e. they are an identical technical solution. Therefore, Group A requested to rule the PCT application at issue to be owned by them.
Wuxi B Company argued that: The dispute over the ownership of patent application rights is an action for declaratory judgment, which must involve litigation interests for judicial relief. However, at the time of this lawsuit, the legal effect of the PCT application at issue has been terminated in all PCT members, including China. Thus, the confirmation on the ownership of the PCT application right at issue no longer has any impact on its current or future legal status, and the requests of Group A no longer entail substantive interests. Therefore, Wuxi B Company requested to dismiss the lawsuit of Group A.
The first-instance court found that Wuxi B Company filed an application for an invention patent with the CNIPA on May 30, 2016, and the application was published on August 24, 2016. Group A filed a lawsuit over the ownership of the patent application against Wuxi B Company in May 2018, claiming the above-mentioned invention patent application right to belong to Group A. The first-instance court made a civil judgment confirming that the above-mentioned invention patent application right belonged to Group A. Wuxi B Company was dissatisfied and appealed. The second-instance court rejected the appeal and upheld the original judgment.
Wuxi B Company filed the application for the invention patent at issue with the CNIPA on May 30, 2016, and filed a PCT application with WIPO on June 12, 2016 based on the basically identical claims, description, and drawings, claiming the invention patent at issue as priority. Later, WIPO published this PCT application, including its four drawings, which are identical to the four drawings in the description of the invention patent application in the previous case. The PCT application at issue entered the European regional phase on July 17, 2017, was published by the EPO on January 17, 2018, and was deemed withdrawn on January 11, 2019. In addition, it entered the U.S. national phase on July 19, 2017, was published by the USPTO on July 18, 2019 with the same applicant and inventors as those of the PCT application at issue, and was granted on February 9, 2021. It did not enter the Chinese national phase.
The first-instance court made a civil judgment on September 13, 2022, determining that the PCT application for the invention patent at issue belonged to Group A. Wuxi B Company was dissatisfied and filed an appeal, arguing that the PCT application at issue had been terminated in all PCT members, including China, meaning that Group A's request no longer held substantive interests, so their lawsuit requests should be rejected. On June 28, 2023, the Supreme People's Court issued a final judgment, rejecting the appeal and upholding the original judgment.
The Court’s effective judgment determined that Group A had litigation interests in the declaratory lawsuit over the ownership of the PCT application at issue.
The dispute in this case was a declaratory lawsuit. The purpose of such action is to confirm the existence or specific status of a disputed civil legal relationship and specific legal facts between the parties, thereby clarifying the legal relationship between the parties and stabilizing their legal status. To initiate a declaratory lawsuit, there must be a litigation interest, i.e., a legal interest requiring judicial relief or protection. For the plaintiff, when their rights or legal status are unassured in reality, and a judicial judgment is an appropriate and necessary remedy to resolve such unassured status, they have interests for a declaratory lawsuit.
In this case, above all, this case could cause unassured status in reality where Group A’s legitimate rights and interests are damaged.
First, a PCT application is a patent application filed according to Patent Cooperation Treaty. PCT application right can bring benefits to the applicant, such as convenience in procedures. Prior to the termination of its legal effect, a PCT application retains a reasonable expectation of potential patent grants by foreign or regional patent offices, which can bring certain actual benefits to the right holder. Others who file a PCT application without patentee’s permission may cause infringement of rights and interests against the patentee.
Second, a PCT application includes international and national phases separately. According to Rule 22 in Patent Cooperation Treaty, the applicant should file duplicates and the translation of the international application to all designated offices within 30 months from the priority date, and pay the national fees. The Treaty also stipulates the applicable deadline for the PCT application to enter into national phases, and that members may excuse the delay according to the grounds allowed by their local laws. In this case, according to the provisions in Chinese Patent Law and its Implementation Regulations, the legal effect of the PCT application at issue was terminated in China for not having entered into Chinese National Phase within the prescribed deadline, but it cannot be precluded that it may be substantively examined and granted in other countries and regions. Even if the PCT application at issue has been terminated in all PCT members, and the possibility for it to be granted has been extinguished, the right holder can still seek for remedy for the loss of procedural convenience benefits and relevant damages in reality thereby incurred.
Third, documents of the PCT application at issue have been recorded in WIPO and published on its website, and the published applicant is Wuxi B Company. This application information is inconsistent with the information in the effective judgment that has determined the patent application right of the invention at issue belonged to Group A. As the two cases belong to the same invention and creation, the inconsistency in the published information put the legal status of the owner of the invention and creation in an uncertain state, which could lead to misunderstanding of the owner of the invention and creation by the relevant public, damaging the goodwill and legitimate rights and interests of the right holder.
Therefore, the confirmation on the legal status of Group A in this case is a basis for Group A to claim its relevant factual or future legal rights and interests. The uncertainty of the ownership of the PCT application at issue caused the unassured status in reality where Group A’s legal rights and interests are damaged.
In addition, the judgment in this case was necessary and proper.
In the circumstance where the PCT application has been accepted, the actual rights holder may request a change of applicant in accordance with WIPO rules within a certain period of time. However, in this case, as the PCT application at issue has exceeded the deadline prescribed in Rule 92-2 of the Patent Cooperation Treaty Implementing Regulations for change recording procedures with the International Bureau, it was no longer possible to change the applicant based on the rights holder’s request, and there were no other remedies available. If Group A was indeed the actual owner of the PCT application right at issue, its true legal status cannot be reflected in the applicant information published by WIPO. Also, before the ownership of the PCT application right at issue was determined by an effective judgment, Group A could not seek other remedies in its own name to protect its legitimate rights and interests. Under this circumstance, confirming the ownership of the PCT Application right by judicial means can help determine the true legal status of the parties involved and facilitate a thorough resolution of current or future disputes, providing protection and relief to the actual rights holder. In this case, the PCT application at issue had been granted a patent in the United States, and Group A was unable to change the rights holder by filing an application in the US national phase. Therefore, in this case, it was necessary and appropriate for Group A to seek relief for the ownership of the US patent.
(2023) Zui Gao Fa Zhi Min Zhong No. 428
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