Patent infringement litigation in China: SPC rulings signal refined approach

China’s Supreme People’s Court (SPC) has recently issued a series of landmark patent decisions that reshape how infringement disputes are litigated and enforced. These rulings offer valuable insights for multinational businesses: they not only clarify damages calculation and the interplay between validity and infringement but also strengthen pre-litigation injunction practice.

Below, three representative cases illustrate these developments.

Key takeaway: The SPC clarified that when the main facts and conditions for calculating infringement damages are already in place, the court should determine the amount of compensation by calculating the profits obtained by the infringer due to the infringement based on the evidence in the case, rather than applying statutory damages.

In Zhi Min Zhong No. 761 (2024), Nanjing Bestzyme sued Hunan Longsen and others for unauthorised production and sales of phytase, an enzyme used in animal feed. The first-instance court held that the plaintiff had not proved actual losses, the defendants’ profits, or licensing royalties. On this basis, it applied statutory damages, awarding CNY 1 million, after considering factors such as the patent’s status as an invention patent, the defendants’ acts of manufacturing and selling, the product’s pricing, the duration of infringement, and Bestzyme’s enforcement costs.

On appeal, the SPC upheld the CNY 1 million compensation but corrected the method of calculation. The SPC found that the sales volume and unit price of the infringing products had already been established, and although profit margin data was incomplete, it could be reasonably determined based on available evidence. Therefore, the case met the threshold for adopting an infringer’s profit-based approach. The SPC emphasised that even if the patentee agrees to statutory damages, courts should prioritise calculating damages based on actual losses or the infringer’s gains rather than mechanically applying statutory damages.

Key takeaway: The SPC confirmed that when a patent is later invalidated, damages already paid under an infringement ruling may be refunded through execution reversal. Importantly, even payments made before invalidation can be reversed – by applying Article 47(3) of the Patent Law in light of fairness principles – to ensure equal treatment of early and late payers.

The SPC provided groundbreaking guidance on how invalidation decisions interact with previously executed infringement rulings in Zhi Min Zai No. 1 (2024).

The dispute involved a utility model patent for foldable phone stands. In 2021, the lower court ordered two defendants to pay the following damages:

• Company A (manufacturer) – CNY 30,000; and

• Company B (dealer) – CNY 2,000.

In November 2022, the CNIPA declared the patent invalid for lack of novelty, and the decision became final. The key issue was whether funds already paid – or later paid – under the earlier judgment should be refunded.

Company A initially resisted enforcement but paid CNY 30,000 in October 2024 to lift a consumption restriction order that blocked loan applications. The SPC clarified that this situation does not fall under the exceptions in Article 47(2) of the Patent Law, which generally prevents the retroactive effect of invalidation on executed judgments.

Instead, under Article 244 of the Civil Procedure Law and Article 65 of the SPC’s Provisions on Several Issues concerning Court Enforcement, the court may initiate an execution reversal. Accordingly, the patentee was ordered to return the funds already obtained, plus interest. This ensures that defendants forced to pay under an invalidated patent are not unfairly disadvantaged.

Company B voluntarily paid CNY 2,000 in March 2022, seven months before the invalidation decision. Traditionally, under Article 47(2) of the Patent Law, such payments would not be reversed, because invalidation was considered non-retroactive for judgments already executed. This rule often led to unfair outcomes: compliant defendants that paid early bore irreversible losses, while those that delayed payment could recover funds after invalidation.

In this case, however, the SPC highlighted the principle of fairness and chose to actively apply Article 47(3) to authorise execution reversal. The court reasoned that equal protection of the legitimate rights of early and late payers must prevail, and refusing reversal here would effectively “punish good faith compliance”.

Key takeaway: The SPC adopted a cautious stance on pre-litigation injunctions in patent disputes, stressing that urgency, factual clarity, and proportionality must be strictly satisfied.

In June 2024, Dreame obtained a pre-litigation injunction from the Quanzhou Intermediate People’s Court, barring Roborock from selling two robot vacuum models during the “618” online shopping festival. The court found a high likelihood of infringement and an urgent need to prevent irreparable harm.

Roborock sought reconsideration before the SPC, which overturned the injunction within ten days – the first decision under a new review mechanism. The SPC held that Dreame’s application did not meet the “urgency” requirement, since the alleged infringement had existed for months and damages could be compensated monetarily. The court also emphasised that the likelihood of infringement was not sufficiently clear, and the balance of interests did not favour granting the injunction.

This ruling not only clarified the strict criteria for pre-litigation injunctions in patent cases but also showcased the SPC’s ability to deliver swift relief through the new reconsideration procedure.

These three rulings reveal a common theme: the SPC is clarifying the evidentiary and procedural framework of patent litigation. Courts now favour concrete market data over discretionary statutory damages, integrate validity outcomes into enforcement with an eye to fairness, and conduct stricter scrutiny of pre-litigation injunctions with expedited review, balancing innovation protection against business continuity.