Analysis of the Jurisdiction of American Courts over Chinese Patent Infringement

The value of China's intellectual property rights, including patent rights, not only comes from the technical content of the patent itself, but also is closely related to the size of the relevant market in China. Judging from the statistics of the gold awards in the 11th China Patent Awards, we can see the leopard. For example, this gold award project award report: as of the end of 2008, the new sales of this 15 gold award projects have accumulated 42.8 billion yuan and the new profits have accumulated 16.6 billion yuan. The new sales of 170 outstanding award projects totaled 264 billion yuan and the new profits totaled 41.5 billion yuan.

Foreign institutions (individuals) are also increasingly interested in acquiring and acquiring Chinese patents. According to the statistics of the number of patents obtained by foreign institutions through application, in 2001, foreign institutions obtained 14981 patents in China. By 2009, the number had reached 80206, accounting for 13.8 of the total number of patents authorized. Coupled with the acquisition of patents in the market, the number and proportion of Chinese patents owned by foreign institutions will be greater.

Therefore, foreign Chinese patent owners, especially those with no business in China, will face difficult problems once they find that there is patent infringement against their Chinese patents, because these foreign patent owners often do not have the ability to file patent infringement lawsuits in Chinese courts. For them, based on language familiarity, business relationships and knowledge of local lawyers and the legal and judicial system, the local courts in the country where their company is headquartered are of course the first choice. However, Chinese patents are filed under the Chinese patent system and are protected by the Chinese Patent Law. Although foreign courts can use experts to understand the Chinese patent system and laws to determine whether the defendant has implemented his patent under Chinese law (I. e. whether it is infringement).

However, in practice, in order to decide whether to infringe a Chinese patent, one must first determine the scope of patent protection required by the content of the Chinese patent's claims and the specification and drawings for explanation. Foreign judges often do not have the ability to read in Chinese and can only explain the scope of patent protection by interpreting the claims, specifications and drawings of the translated Chinese patent. As we all know, the same Chinese translation into another language, often can have several different, but all reasonable translation meaning. And each different translation will have a slightly different interpretation of the original text. In fact, the process of translation itself is the process of interpretation. General compilation and interpretation often do not affect the correct understanding of readers, such as literary works, news, scientific and non-legal text content. However, for patent documents, minor explanations in translation will lead to inconsistent understanding of the scope of patent protection. The inconsistency of this slightly different scope of patent protection often leads to different judgments about whether there is patent infringement and whether the patent is valid. As a result, foreign courts that use non-Chinese as their working language must decide which translation is more reasonable. In order to explain to the court that the translation is more reasonable, we have to go back to relying on a large number of Chinese vocabulary and grammar references and basis to explain the rationality of various translations. Thus, if a foreign Chinese patent owner wants to file a request for Chinese patent infringement in a local court, will the foreign court pursue the end and accept such a request?

If this question is brought to the courts of the United States, the general answer should be that it will not be accepted. But in reality it is not necessarily so. Nanjing Huaxun introduces a patent infringement lawsuit by telling a real case to explore the attitude of the U.S. court to the jurisdiction of China's patent infringement request.

1. Brief introduction of the case

The plaintiff in this case is an American company called "3D. 3D has neither branch nor partner in China. The origin of the matter is the three-dimensional purchase of two patents and their patent licensing contracts. The two patents are U.S. patents and Chinese patents invented by Chinese inventors and involving the same technology. The patent is licensed with another company referred to herein as "Fairchild"

The contract signed by a U.S. (multinational) company allows Fairchild to implement the technology protected by the two U.S. and Chinese patents. The license agreement contains a choice-of-jurisdiction clause stating that contract disputes are litiable in federal court in the State of Texas or Maine. Subsequently, Fairchild refused to pay the license fee, saying it did not implement the technology protected by the two patents. Three-dimensional and Fairchild repeatedly failed to negotiate. So, after announcing the suspension of the patent licensing contract with Fairchild, 3D filed a complaint in the U.S. Federal Court for the Eastern District of Texas, suing Fairchild for infringement of its U.S. patent. On the same day, Fairchild also filed a "declaration of non-infringement" lawsuit in the Federal Court of Maine (hereinafter referred to as the "Maine Court"), including requesting the court to rule that it does not infringe 3D's Chinese patent. ⑧ Because of the time difference, the complaint of "declaration of non-infringement" was submitted to the Maine court before the three-dimensional complaint.

⑨ Thus, the two cases were combined and handed over to the Maine court for hearing. Sanwei then filed a lawsuit in the Chengdu Intermediate People's Court in Sichuan, China, suing Fairchild for infringement of its Chinese patents.

2, 3D believes that the U.S. court has no jurisdiction over China's patent request.

In the Maine court, 3D asked the Maine court to cancel or avoid hearing Fairchild's request on the grounds that the court needed to explain the scope of protection of Chinese patents in the case of Fairchild's non-infringement of 3D's Chinese patents, while the US court had no right to explain the scope of protection of Chinese patents, or at least should refuse to participate in such an explanation.

The three-dimensional basis comes from the "waiver doctrine (Abstention Doctrine)" put forward in the final judgment of the United States Supreme Court in a case in 1941. The doctrine has since developed and defined that if the hearing of certain motions in a case by one court is likely to infringe the powers of another court, the court should (or in some cases must) refuse to hear the motion. The circuit court should further extend the "waiver doctrine" to cases with diverse jurisdiction (Diversity Jurisdiction) like this case, and in other subsequent cases (such as Voda case,

Mars and Stein) further limit the jurisdiction of U.S. courts over foreign patent claims. These reasons explain why no U.S. court has ever heard requests for foreign patent infringement, Sanhe said. 6.

3, Fairchild believes that the U.S. court has jurisdiction over China's patent request.

In this regard, Fairchild puts forward various reasons to refute the three-dimensional, mainly due to: the two parties in this case are legal entities in different states, with diverse jurisdiction, which is not available in the previous case cited by the three-dimensional. Fairchild also cites Baker-Bauman jurisprudence to support the view that the Maine Court has jurisdiction over Chinese patent requests. It was pointed out that in the Baker-Bauman case, the Court held that the issue of diversity jurisdiction was not addressed in the Voda and Stein decisions, and thus the Voda and Stein cases were not instructive in this case, so that the Maine Court had jurisdiction over Chinese patent claims under the premise of diversity jurisdiction. The

4. Judgment of the Maine Court on the Jurisdiction of Chinese Patent Requests

The Maine court ruled that the court had jurisdiction over the Chinese patent infringement claim. The court first affirmed the Voda decision and summarized why U.S. courts should generally avoid hearing requests for foreign patents.

(1) "The validity and infringement rulings of foreign patents may affect the obligations of the United States under intellectual property treaties;

(2) The relationship between comity and sovereignty generally teaches that U.S. justice respects the rights of foreign courts to foreign patent infringement claims: because U.S. courts have no international obligation to adjudicate and are inconvenient to do so, there is no reason to believe that foreign courts cannot adequately protect the rights of foreign patents and may affect the sovereignty of foreign governments; and that jurisdiction over patent infringement disputes, like land disputes, should be local; at the same time, the supplementary jurisdiction charter is vague about the granting of jurisdiction;

(3) Although the adjudication of multinational patents may lead to efficiency, in the absence of a mechanism for recognizing foreign judgments, judicial efficiency requires the avoidance of complex foreign patent issues;

(4) It is not convenient to apply jurisdiction (forum non

conveniens) In the analysis, the problems caused by the convenience factor are not conducive to the court's decision to deal with foreign patents;

(5) The doctrine of "acts of state" has been established to prevent United States courts from inquiring into the official acts of another sovereign, and it would be unfair to leave it to United States courts to determine whether a foreign patent is infringed when the doctrine does not allow courts to determine the validity of a foreign patent."

At the same time, the Maine court pointed out that the fact that the court did not consider diversity jurisdiction was highlighted in the Voda decision, which in fact implied that the circuit court might have decided differently in the Voda case if it had considered diversity jurisdiction.

The Maine Court found the jurisdictional choice clause in the patent license agreement to be the most compelling reason. The court cited the Federal Circuit's 1986 decision in the Warner case to support its argument. In the Warner case, the parties to the dispute also had a prior agreement in which the option clause provided for jurisdiction in the United States (defendant) and Italy (plaintiff). In the Warner case, the plaintiff sued in the U.S. courts, but both the trial court and the appellate court ruled that the plaintiff must go to Italy under the option clause. Finally, the court noted (1) that there was precedent in the United States courts to enforce the choice of jurisdiction, allowing Italian courts to interpret United States patents, and (2) that there were courts in other countries to hear cases related to United States patent law, rejecting the request that the court refrain from hearing Chinese patents. Guo

It is worth mentioning that the Maine court made such a decision also considering that the case did not mention the request for invalidation of Chinese patents, because the Maine court held that hearing the request for invalidation of patents would involve the sovereignty of other patent offices. Kill

5, 3D believes that the court misjudged the reasons

Three-dimensional believes that the court's decision was wrong because the Warner case on which its decision was based was not relevant to the case. The jurisprudence of the Superior Court of the Court of Maine, the First Circuit Court of the United States, explains that the language used in the choice clause is "must (mandatory) jurisdiction" and "permitted (permissive) jurisdiction. The language used in the license agreement in the Warner case "any action (by the defendant) must be filed in Cleveland, Ohio, and any action (by the plaintiff) must be filed in Vicenza, Italy" is the language of the "must jurisdiction" option. The First Circuit has historically enforced the choice of jurisdiction under this language. In this case, the language of the license agreement "the parties agree (consent) that the federal courts of Maine and the federal courts of the Eastern or Northern District of Texas shall have jurisdiction" is the language of the "permitted jurisdiction" choice. The First Circuit has never been more likely to enforce the choice of jurisdiction under this prescribed language. The case of Warner is therefore not instructive in this case.

Based on the decision of the Maine court, 3D decided to appeal. The reason for the appeal was that the Maine court had failed to distinguish between the "must" and "permissible" language used in the choice of jurisdiction clause, resulting in an erroneous decision. However, the parties soon thereafter achieved an off-court settlement, so the appeal did not result in a final decision by a higher court.

6. Concluding remarks

From the above analysis of the case, it can be seen that under normal circumstances, the US court will not accept the request for hearing Chinese patent infringement. However, if the plaintiff and the defendant have a prior agreement that the U.S. court has jurisdiction over Chinese patent infringement, and the language of this agreement is necessary and the request does not involve the issue of patent invalidity, the U.S. court is likely to accept the request to hear the Chinese patent infringement. However, if the language of the agreement is permissibility or if the request relates to the issue of patent invalidity, it is unlikely that it will be entertained by the courts.

In international trade, due to the involvement of intellectual property rights, the agreement between the two parties on jurisdiction becomes both important and complex. As the Maine court noted in its decision, "In a globalized market, intellectual property disputes may involve the patent laws of many countries. The uncertainty and complexity of resolving these disputes can increase the cost of doing business and thus the cost to consumers." The court emphasized that "where possible, a commercial agreement to determine in advance the jurisdiction that is most convenient for both parties to negotiate seems to be a useful medicine for the settlement of the dispute." The Tribunal is also aware of the difficulties of translating patent power requirements in foreign languages, interpreting foreign law and foreign patent law, and understanding foreign patent systems. However, the Maine court held that "even the patent law of this country (the United States) has many difficulties," not to mention that "these difficulties have had to be faced in the past when (we) have judged the infringement of international contracts and the damages arising from infringement." Much

In any case, the advice sent to this article by Nanjing Huaxun is that lawyers should be cautious in the choice of jurisdiction and the application of the language agreed upon when writing a foreign patent license agreement.