The PRC Patent Law permits courts to issue injunctions before or during infringement proceedings. However, it is very difficult to clearly prove infringement and irreparable damage to support a grant of preliminary injunction in patent proceedings.
In December, 2011, the Supreme People’s Court issued judicial guidelines for intellectual property (IP) infringement adjudication entitled, the Opinion on Several Issues Relating to Sufficient Utilization of IP Adjudication to Foster Development and Prosperity of Socialist Culture and to Promote Autonomous and Coordinated Economic Development. The Opinions focus on strengthening IP enforcement and promoting indigenous innovation, but also set forth principles for adjudication of patent, trademark and copyright infringement, and trade secret disputes. They touch on preliminary injunctions but make no substantial changes to current practice.
According to ZY Partners (http://www.zypartners.com – Blog), under Section 16 of the Opinion, Chinese courts are directed to apply strict standards in giving preliminary injunctions and issue them cautiously. The Court emphasized that preliminary injunctions should only be granted where the facts are clear and the determination of infringement is easy to make. When possible, the courts should conduct a hearing with both parties present. Determinations of infringement that require complicated technical comparisons are generally not appropriate to for a preliminary injunction. Further, a preliminary injunction should not be issued if an appropriate decision has been made to invalidate the asserted patent.
Further, under the Supreme People’s Count Opinion on Several Issues related to Serving Key Agendas under Current Economic Environment through IP Adjudications, issued in April 2009, the Court had already imposed several conditions for a lower court to issue preliminary injunctions in patent cases, including:
(1) The court must consider if the harm can be remedied by monetary damages;
(2) The determination of the bond must take into account possible losses caused to the defendant and damages claimed by the plaintiff;
(3) In balancing public interest claims, the courts should consider only circumstances of public health, environment and other significant social interests, and should also be mindful of the impact on significant economic interests and market prospects of the defendant.
(4) If the plaintiff wrongfully applies for a preliminary injunction, the defendant is entitled to damages.
Together, these Opinions severely limit the use of preliminary injections in complex patent proceedings in China.