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Ruling Principles for Direct Infringement by Multiple Parties in China

April 10, 2020 / Blog, Case Comment, Featured Author
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Affected by the characteristics of network communication, method patents in this technical field usually relate to multiple parties. For example, multiple devices interconnect by means of the interactions among the respective parties. Regarding to the network communication method patents, a situation exists that multiple parties may implement different technical features of one patent claim separately, while their joint implementation falls into the scope of the claim. And it is even possible that a user of the accused infringing product participates in the patent implementation when normally using the product without any other actions from the manufacturer. This situation causes that infringement assessment become the difficulty of such cases. The Supreme Court made a judgment on such a patent infringement case involving multiple parties recently (case Ⅰ, No.: (2019)最高法知民终147号, darts-ip ref.: darts-684-660-H-zh). By searching the darts-ip’s patent database, we found another case (case Ⅱ, No. (2017)京民终454号, darts-ip ref.: darts-900-720-E-zh) similar to the aforementioned case. We will compare the two typical judgments in order to give readers some insights about the similarities and differences between the court’s trials of the two cases.

Case

Shenzhen Dunjun Technology Co., Ltd. (“Dunjun” for short) filed a patent litigation against three enterprises including Shenzhen Tenda Technology Co., Ltd. (“Tenda” for short). The Jinan Intermediate Court ruled that Tenda constituted infringement of Dunjun’s patent right on May 6th,2019. Tenda appealed to the Supreme Court. However, the Supreme Court held the first instance judgement on Dec 6th,2019.

The asserted claim 1:

A simple method to access the portal website of a network operator, wherein the method comprises the following steps:
A. The underlying hardware of an access server directly transmits the first uplink HTTP message coming from a portal business user’s device before authentication to a “virtual Web server” which realized by “virtual Web server” module of the access server’s high-level software;
B. Establish TCP connection between website created by the “virtual Web server” for the user to visit and the portal business user’s device; the “virtual Web server” returns a message including redirecting information to the underlying hardware of the access server; the underlying hardware of the access server transmits a Portal Server message redirecting to the real portal website to the portal business user’s device according to normal forwarding process;
C. The browse of the portal business user’s device automatically starts to access the Portal Server of the real portal website after receiving the redirecting message.

The key point of the case was whether Tenda’s behavior of making, selling or offering to sell of the accused router product (equivalents to the access server of claim 1) had constituted infringement.

Tenda claimed that the patent related to a method for realizing the network accessing authentication in light of which no product could be acquired(including the accused product). Hence, the protection of the accused patent should not extend to products.

The Supreme Court held that the patent method had been originally solidified in the accused product during its manufacturing process. The patent method process was re-implemented by users when they were using the accused terminal devices, which was merely the mechanical replay of the patent method previously solidified in the accused product.

The Supreme Court further presented the following grounds for infringement determination: if the suspected infringer solidified the substantive content of the patent method into the accused product with the purpose of business, and the action or the result of the action played an irreplaceable role for the consequence that using the product would fully covered the technical characteristics of the patent claim, in other words, if the user could naturally re-implement the process of the patent method when using the accused product normally, it should be deemed that the infringer implemented the patent method and infringed the right of the patentee.

The court explained the defendant’s behavior from three aspects:

  1. The defendant did not implemented the patent method involved, but they manufactured, offered to sell and sold the accused product with the purpose of business. The mentioned accused product with the function of directly implementing the patent method played an irreplaceable role during the procedure that the terminal network users used the accused infringing products to completely re-implement the patent method involved.
  2. The defendant’s illegal profits from their action of manufacturing, offering to sell or selling accused product had an intimate association with the patent involved.
  3. If the patentee’s innovation investment cannot gain their deserving profits, they would be not able to continue the following research and innovation activities. It was unfair for the defendant to earn the interests of the patentee by infringing their patent, which would result in a serious unbalance regarding the distribution of benefits.

 

Then the court ruled that the actions of defendant constituted an infringement to the patent involved.

 

Case

IWNComm Co., Ltd. (“IWNComm” for short) filed a lawsuit against Sony Mobile Communication (China) Co., Ltd. (“Sony” for short) in the year of 2015. IWNComm claimed Sony infringed their ZL02139508.X patent with the name of “A method for the access of the mobile terminal to the WLAN and for the data communication via the wireless link securely”. After two trials, the court of the second instance (Beijing High Court) made a decision on March 28th, 2018.

The asserted claim 1:

A method for the secure access of mobile terminal to the Wireless Local Area Network (WLAN) and for secure data communication via wireless link, wherein access authentication comprising the steps:

1) Mobile Terminal (MT) sends to Access Point (AP) the access authentication request message containing the MT certificate;

2) The AP sends the MT certificate and AP certificate to Authentication Server (AS) to request certificate authentication;

3) AS authenticates the AP certificate and MT certificate;

4) AS sends back to AP the result of authentication of AP and MT by certificate authentication response message, go to step 5); if MT fails to be authenticated, AP refuses accessing of MT;

5) AP sends back to MT the result of certificate authentication of AP and MT by access certificate authentication response;

6) MT judges the result of certificate authentication of AP, if AP successes to be authenticated, go to step 7); otherwise MT refuses to access to AP;

7) Said access authentication between MT and AP is completed, they start to communicate with each other.

 

According to the court of second instance, the patent involved in the case was a typical method patent relating to “multi-parties”. In the process of implementation, multiple parties were required to participate in the technical solution, and only when the multiple parties worked or interacted together could the patent technical solution be fully implemented. In this case, Sony only provided MT with built-in WAPI function module, but didn’t provide AP and AS, wherein MT, AP and AS were three peer-to-peer security frameworks. The patent involved could not been implemented unless all of MT, AP and AS were interactively applied. Therefore, in this case, no individual implementer, including the users, could fully implement the patent involved alone. At the same time, it was also not possible that one single person guided or controlled the implementation of other persons, or multiple persons coordinate the implementation of the patent involved. On the premise of no direct implementer existing, it didn’t conform to the necessities of contributory infringement only if a component supplier had ever contributed to the accused product. And it was also an excessive expansion of the protection of the patentee.

Although the court affirmed that Sony did not constitute contributory infringement, it ruled from another perspective that Sony constituted direct infringement for the following reasons:

According to the common practices of mobile communication equipment manufacturers, WAPI function test was a project of model approval test. Only through WAPI test could smart phones obtain the telecommunication equipment model and network access license approved by the Ministry of Industry and Information Technology. It could be inferred that at least at the stage of design and development or sample testing, Sony had already fully implemented the patent technical solution without acquiring any permission from IWNComm.

Comparison between the two cases:

In caseⅡ,the court decided that the accused infringer constituted direct infringement on the ground that their products involved in the case would inevitably implement the patent method at the test stage. Interestingly, in caseⅠ, the patentee claimed their right based on the same reason above presumably having drawn on the court’s view in caseⅡ. However, the Supreme Court did not make a corresponding judgment based on this reason,  while they believed that “it was not enough to fully protect the interests of the patentee by merely determining that the infringer constituted infringement via their implementation of the patent method during the process of testing. Because the behavior of testing was not the fundamental or direct reason for the infringer to seek illegal profits, and ordering to stop testing could  not prevent the patent method from more infringements. And the patentee had no right to claim that the users who directly implemented the patent method without any purpose of business constituted patent infringement.”

By comparing the two cases, the court in caseⅡadopted the standard similar as the “control or direct” framework determined by the case law of the United States (Akamai Techs., Inc. v. Limelight Networks, Inc.). While in caseⅠ, the Supreme Court set up a new standard that was more suitable for China, which could be deemed as a great progress of judicial trial.

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Author : He Yuanyuan

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