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Analysing the Supreme Court’s stance on sufficient disclosure

Guanyang Yao and Jiuyun Peng of Liu Shen review an appeal before the Chinese Supreme Court and what it reveals about the court’s approach to sufficient disclosure

In September 2017, the Chinese Supreme Court published a statistical report showing that, in total, 724 IP retrial cases were heard in 2016. Among these, 84 cases were patent administrative appeals and 143 were patent infringement appeals. These numbers are almost twice the amount heard in 2010. Appeals before the Supreme Court are not automatically accepted. However, an increase in IP Supreme Court retrial cases demonstrates a Supreme Court trend towards hearing more IP retrial cases in order to provide guidance on the application of IP laws.

A retrial patent administrative case handled by us reversing a second instance judgment is analysed here. Our analysis presents an overview of the whole proceeding from an invalidation decision to a retrial judgment and opinions from the Supreme Court on the issue of sufficient disclosure.

Procedural matters

The proceedings started with an invalidation request against the Patent ZL97123475.2 before the Patent Re-examination Board (referred to as the PRB). We successfully represented the patentee in defending this validity challenge and the PRB made a decision to maintain the patent. This invalidation decision was upheld by the court of first instance, Beijing First Intermediate Court. However, when the invalidation request was appealed to the court of second instance, Beijing High Court revoked the decision stating that the court was mistaken in assessing sufficient disclosure. It asked the PRB to make a new decision. This was rather unfavourable to the patentee. Second instance judgments are final and become effective immediately when issued. As general practice, the PRB makes a new invalidation decision based substantially on the opinions of the Beijing High Court, which means, in this case, the patent would have been invalidated.

In light of these circumstances, we assisted the patentee with a last attempt by requesting a retrial before the Supreme Court. Under Chinese law, such a request is not automatically accepted by the Supreme Court since the Beijing High Court's decision should be final and effective for an appeal. Although the losing party has the right to appeal before the Supreme Court, it is at the court's discretion whether to retry the case. Generally, a court hearing will be held by the Supreme Court to review and decide if the case should be accepted. If the court finds that there are issues to be discussed or clarified, the court will suspend the effectiveness of the second instance judgment and retry the case. This is what happened in our case. After the hearing, the Supreme Court accepted the request for retrial and finally made a reversal judgment ((2016) Supreme Court Administrative Appeal No 95) to revoke the judgment and maintain the decision. This is the final judgment and generally no other further legal procedure is available for the losing party.

It takes a relatively long time for the whole proceeding. In the case of this patent case, six years passed between the invalidation decision and the final retrial judgment, with the timeline being November 2011 for the invalidation decision, February 2013 for the judgment of first instance, June 2015 for the judgment of second instance and June 2017 for the retrial judgment. At any single court level, an elongated procedure of nearly two years is needed for a reversal judgment because generally both the president of the court and the presiding judge of the IP court will supervise and grant approval for the reversal.

Based on our experience, the most important factor is persuading the PRB. When opinions or arguments are accepted by the PRB, the success rate for the whole proceeding is high since the PRB will join the dispute as a defending party before the courts and communication between courts and the PRB will be smooth because of the supposed neutral standing of the PRB. In our case, the PRB made a strong presentation during the Supreme Court hearing, stating what could be regarded as common knowledge in the technical field of the patent. This laid a solid foundation for the patentee to explain the patent solution.

Sufficient disclosure

In this case, one of the invalidation reasons under scrutiny in all procedures was the sufficient disclosure requirement on five technical features in the patent description. According to Patent Law Article 26.3 and the Patent Examination Guidelines, the patent description should clearly and completely disclose the invented technical solution to the degree that a skilled person is able to implement it.

Under Chinese patent practice, criteria for sufficient disclosure includes clearness and completeness and enablement in a logical sequence. The clear and complete disclosure is only the extrinsic appearance of the patent description, whilst enablement by the skilled person is the intrinsic core sought after. The goal of description disclosure is for a skilled person to carry out the patent, which is the objective of such disclosure. Insufficient disclosure should not be decided merely based on some unclear wording or incompleteness. Only if such unclearness or incompleteness would result in the skilled person not being able to use the patent to solve technical problems with the expected technical benefits, should such unclearness or incompleteness result in an insufficient disclosure rejection.

Under Chinese patent practice, criteria for sufficient disclosure includes clearness and completeness and enablement

The knowledge level of the skilled person is another critical factor for enablement. Patent Examination Guidelines define the skilled person. This definition is also confirmed by the Supreme Court in Retrial Judgment (2014) IP Administrative Retrial No 119: the skilled person should not only deeply understand the patent documents, but also grasp good background technical details, which could be incorporated as supplementary information not recorded in the patent description.

This is rather favourable to the patentee, especially in the mechanical and electrical fields, since drawings of the patent generally contain a large amount of detail, which could be relied on as a basis to explain the patent in unclear or incomplete circumstances. The underlying principle is that the patentee is entitled to explain the patent to quite a large extent after grant and the sufficient disclosure requirement should not be applied as a key ground for invalidation in practice. Theoretically, it is in the prosecution phase that sufficient disclosure of description should be examined closely and rejected if necessary. After that, since obviousness has been evaluated based on understanding of patent solution, it would be unreasonable to find out that disclosure of a patent is insufficient. Indeed, approximately under 0.5% of invalidation decisions are due to insufficient disclosure.

In our case, the PRB followed the above criteria and reviewed the patent description thoroughly confirming that a skilled person was able to understand the patent in combination with the description and drawings. This was upheld by the court of first instance. The court believed that although there was some unclear wording in the description, this was mainly related to formalities and the skilled person was able to understand the true meaning of the wording by studying the description and drawings.

However, the Beijing High Court applied a stricter criteria by finding that five unclear or incomplete technical features in a description are too many and are severe mistakes, forcing the skilled person to pay excessive effort or correct large numbers of errors until the patent can be implemented.

This opinion takes the number of mistakes in a description as a basis for insufficient disclosure. It seems that the Beijing High Court was standing in the position of the public, limiting the ability of the patentee to explain the description. Although the number of mistakes seems to be objective, this does not comply with the core value of the sufficient disclosure requirement, i.e. enablement by the skilled person. For example, typos, even though there may be many, would not prevent the skilled person from understanding the patent.

Moreover, excessive effort and large numbers of error corrections are not legal concepts in Chinese Patent Law. Since analysis in the context of the patent description and drawings is necessary for understanding the patent, no one can tell how much effort is needed. For outsiders, perhaps no matter how much excessive effort is paid, the patent would not be understood and could not be implemented. However, for the skilled person, effort, not involving creative labour, no matter how much, should be reasonable for implementing the patent. Errors to be corrected, only if no creative labour is involved, should also be acceptable.

The Supreme Court disagreed with the opinion of the Beijing High Court for four reasons:

  • The Supreme Court emphasised the importance of the skilled person when assessing sufficient disclosure. Patent description should not be understood mechanically based on literal meaning of text, but from the knowledge level of the skilled person.
  • The skilled person has the capacity to find, correct and understand errors in the description and implement the patent based on these corrections. Moreover, this understanding and any corrections do not change the patent solution to a new one, and do not harm the publicity and stability of claims. If such explanations by correction on the description are not allowed, the patentee's benefits would not be proportionate to the patent's contribution to society.
  • Unclear or incomplete elements of the patent mainly exist in relation to prior arts, not inventive parts. The standard for insufficient disclosure should not be amount or severity of mistakes, but rather whether the skilled person is able to understand and implement the patent.
  • Such right of explanation based on corrections should not be abused. Mistakes or errors in a patent description should be accurately distinguished from those that constitute insufficient disclosure to the extent that they are impossible to understand and implement. What should be kept in mind is the balance of interests between the patentee and the public, and encouraging invention in order to improve scientific progress and promote economic development.

Based on this case, we can see that the Supreme Court stood in line with the PRB on the sufficient disclosure requirement, acting in the legal spirit of being favourable to the patentee. This judgment is also consistent with the (2011) Administrative Retrial No 13 judgment of the Supreme Court. In recent years, reversal rate by the Supreme Court of the Beijing High Court has increased. Regarding sufficient disclosure, the (2014) Administrative Retrial No 8 judgment also reversed a Beijing High Court judgment. Therefore, sometimes a retrial attempt before the Supreme Court might bring a surprise, especially for cases that win before the PRB but lose before the courts.

Patent description explanation

Regarding the issue of insufficient disclosure, the most effective solution is to take advantage of the patent description and drawings themselves to make a detailed explanation. Sometimes common knowledge may be put in from the technical side, but the less the better. In this case, we did not incorporate any common knowledge, but completely relied on patent description and drawings. This strategy was effective since our explanation was accepted by the Supreme Court.

For example, one invalidation reason related to unclearness in the words "to relax" in reference to a technical feature: "A spring 10 continuously urges a finger 8a to relax it from a pawl 8 to the shaft 1". The words "to relax" are hard to understand in the context because when a force is put on the finger 8a, the finger 8a should be in tension but not relaxed.

To explain the meaning of these words, a reasonable way is to describe the whole operation process of the finger 8a, pawl 8, spring 10, lever 11 and shaft 1 by analysing forces on those parts and showing movement of the pawl 8 and its finger 8a in operation. Fortunately, all these can be seen from figure 1 of the patent. We defined the pawl 8 status transitions from under forces in both directions to moving only under the spring 10 force as the "relaxing" status since there is a change of force on the pawl 8. This was accepted by the Supreme Court. The court confirmed that although the words "to relax" are unclear, a skilled person can clearly and completely understand the solution by referring to both the patent description and figure 1 simultaneously.

Another unclearness reason related to a confusing indication of lever 11. While movement of lever 11 is described with reference to figure 1, the written description uses figure 3 to refer to lever 11. This was challenged as a contradiction.

At the beginning of this paragraph, there is a sentence stating "in positions shown in figure 1", which should be construed as a key sign indicating that the whole paragraph is about the moving operation in figure 1. Although lever 11 is indicated using figure 3, the skilled person will still check figure 1 to understand embodiments of the patent because of its key sign function. Moreover, whether lever 11 is indicated by figure 3 or figure 1, there is no change for lever 11 positions in both drawings. The Supreme Court accepted this explanation and found that although it was a mistake to use figure 3 to indicate lever 11, a skilled person can clearly recognise the mistake and understand the patent by reading the patent description in combination with figure 1 and figure 3.

Currently, evident mistakes in patent description after grant are not allowed to be amended. Consequently, it is extremely important to draft everything correctly and put technical details in the description, keeping them consistent with the context. This is the basis for explaining the patent and also the basis for technological advances. The Supreme Court is mindful of the patentee's interests and the patentee should act in a manner deserving of this consideration by drafting the patent description appropriately.

Guanyang Yao
  Mr Yao joined Liu Shen & Associates in 2005, specialising in patents including patent prosecution, patent re-examination, patent invalidation, patent infringement and administrative litigation, patent due diligence and freedom to operate investigations. He has particular expertise in standard essential patents, mechanical engineering, vehicle engineering, heavy engineering, daily necessities, medical devices, design and telecommunications.

Mr Yao obtained his bachelor’s degree in jet propulsion and master’s degree in information systems from Beijing Aeronautics and Astronautics University (BUAA) in 2002 and 2005. Mr Yao obtained an LLM degree with honours from The John Marshall Law School in the United States in 2015. Mr Yao obtained a master’s degree in law, majoring in civil law from China University of Political Science and Law in 2017.

Mr Yao qualified as a patent attorney in 2006 and a lawyer in 2008. He has extensive experience representing large international companies in patent disputes including patent infringement cases, patent invalidation cases, customs IP protection cases and cases concerning IP protection in trade fairs. Mr Yao has strong skills in patent searching, analysis and strategy in patent dispute cases.

Jiuyun Peng
  Mr Peng began his legal career in patent law in July 2002 and joined Liu Shen & Associates in April 2005.

Mr Peng qualified as a lawyer in 2003 and obtained the qualification of patent attorney in 2004. Mr Peng’s current practice mainly focuses on patent enforcement including patent litigation and administration proceedings, patent prosecution and invalidation in the technical fields of mechanical engineering, material science, semiconductor devices and display devices. Mr Peng’s services also include providing clearance opinions and patent strategy consultations for corporations, providing legal advice and giving training on patent law and related issues. Mr Peng has also assisted Chinese applicants in patent application filing and prosecution with foreign patent offices, such as the USPTO, EPO, JPO and KIPO.

Mr Peng obtained a bachelor’s degree and a master’s degree in material science and engineering from Tsinghua University in 2000 and 2002, respectively. Mr Peng further obtained an LLM from The John Marshall Law School in the United States of America in 2009.


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