DEALS
Zhong Lun Wins Four Patent Ownership Disputes for CCTEC before China's Supreme People's Court
Zhong Lun Wins Four Patent Ownership Disputes for CCTEC before China's Supreme People's Court
Zhongye Continuous Casting Technology Engineering Co., Ltd. (“CCTEC") recently secured victory in four patent ownership disputes before the Supreme People’s Court of China with the assistance of Zhong Lun’s professional expertise. The inventor of the patents in dispute was a senior executive who had been responsible for R&D and management at CCTEC for more than ten years. He set up a company in Beijing after leaving CCTEC and applied for the four patents, which were suspected of infringing on the CCTEC’s trade secrets. In July 2020, CCTEC engaged Zhong Lun to file the lawsuits over the ownership of the patents.
After a detailed technical comparison between the patents and all the work that the defendant had participated in when working with CCTEC, Zhong Lun lawyers formulated a litigation plan and filed a series of patent ownership dispute lawsuits with the Beijing Intellectual Property Court. In March 2021, the Beijing Intellectual Property Court issued a first instance judgment for each of the lawsuits, supporting all the claims of CCTEC. The defendant and its company appealed the judgments to the Supreme People’s Court. Despite COVID-19 outbreaks in Beijing, the Supreme People’s Court made a special decision to conduct the appellate trial offline and have both parties present before the court to thoroughly verify and cross-examine all the original evidence. Zhong Lun lawyers argued that although the technical solutions of the disputed patents were not identical to those resulted from the defendant’s service at CCTEC, the examination should focus on the relevance of the defendant’s duties or tasks as well as the content, technical field and technical subject matter of his work at CCTEC to the technical solutions of the patents, rather than on the consistency of specific technical solutions.
In November 2022, the Intellectual Property Court of the Supreme People’s Court issued four second instance judgments, upholding the first instance ones. The Supreme People’s Court held that because the inventions at issue were made within one year after the employment relationship between the defendant and CCTEC terminated and were related to the defendant’s duties and tasks at CCTEC, the patents should be recognized as service inventions and attributed to CCTEC.
The case has significant implications in that the Supreme People’s Court specifically explained the criteria for determining the ownership of patent rights for service inventions. If an invention made by an employee within one year after leaving his/her employer is not identical to those resulted from his or her duties or tasks at the employer in terms of specific technical matter, technical solution, technical means or technical effect, but is related to his or her duties or tasks with the employer in terms of technical field, technical subject matter and technical idea, the invention should be regarded as related to his/her original work or tasks at the employer referred to in Article 12(1)(3) of the Rules for the Implementation of the Patent Law of the People’s Republic of China. This offers an important guidance for courts to hear similar cases.
Zhong Lun partner Dan He, non-equity partner Jie Xu and associates Lu Chen and Qi Zhang provided full-suite legal services for this case.
