China Releases Summary of Holdings of the Intellectual Property Tribunal of the Supreme People’s Court (2021)
On February 28, 2022, the Intellectual Property Tribunal of the Supreme People’s Court released 55 holdings (最高人民法院知识产权法庭裁判要旨摘要（2021)) from 48 typical cases from 3,460 cases concluded in 2021. The holdings cover patent administrative cases, patent civil cases, new plant variety cases, integrated circuit layout design cases, trade secret cases, computer software cases, and monopoly cases. One highlight is what might be the first “pay-for-delay” agreement in a pharmaceutical case. What is noticeable absent though is the Sharp v. Oppo litigation setting jurisdiction for Chinese courts to set global standard essential patent licensing rates.
In what might be the first Chinese reverse payment (“pay-for-delay”) agreement litigation, the Supreme People’s Court ruled in （2021）最高法知民终388号 that reverse payments might constitute a monopoly and are subject to review. The monopoly determination can be made by comparison. The Supreme People’s Court explained,
The actual situation of the relevant agreement and the hypothetical situation that the relevant agreement has not been signed or performed, focus on examining the possibility that the drug-related patent right will be invalid due to the invalidation request under the circumstance that the generic drug applicant has not withdrawn its invalidation request. Based on this, we analyze whether and to what extent the relevant agreement has caused competition damage in the relevant market of patented medicines. In principle, if the patentee gives high compensation without justifiable reasons in order to make the generic drug applicant withdraw the request for invalidation, it can be regarded as a possibility that the patent right will be invalidated due to the request for invalidation by the generic drug applicant. It is also an important factor to consider, and it is generally necessary to predict and judge the relevant review results under the assumption that the generic drug applicant has not withdrawn its request for invalidation.
Absent from list, but which may make the top 10 cases of 2021, is the Sharp v. Oppo case in which the Supreme People’s Court affirmed the right for Chinese courts to set global licensing rates when the parties have negotiated licensing and there is a nexus to China.
In Sharp v. Oppo, the Supreme People’s Court reasoned,
Based on the above facts, it can be seen that, first of all, the parties in this case have the willingness to reach a global license for the standard essential patents involved, and have conducted licensing negotiations on this…. Secondly, the standard-essential patent licensing dispute in this case is obviously more closely related to China. The specific manifestations are as follows: In this case, most of the standard-essential patents involved in the licensing negotiations of the parties are Chinese patents; China is the main place of implementation, main place of business or main source of revenue for the implementers of the involved standard-essential patents; China is the party’s patent licensing negotiation place; China is also the location of where property that can be seized or enforced by the requesting party is located.
The European Union made a Request for Consultations with China over this and 4 other cases involving anti-suit injunctions and setting global SEP rates. The dispute settlement consultations that the EU has requested are the first step in World Trade Organization (WTO) dispute settlement proceedings. If they do not lead to a satisfactory solution within 60 days, the EU can request the WTO to set up a panel to rule on the matter.