Prior art defence in patent litigation: A legal quagmire?

Similar to some civil law countries, China implements a split system in which patent infringement is determined by the courts and an invalidity challenge is heard by the Patent Reexamination Board (PRB) of the State Intellectual Property Office (Sipo). This system enables the PRB examiners, arguably more technically knowledgeable than court judges, to evaluate patent validity while the court decides infringement issues. Thus, a patent infringement dispute is frequently fought simultaneously on two fronts: before the court and at the PRB. If the infringement case progresses more quickly than the parallel invalidation process, the alleged infringer is at risk of losing the infringement case even if the patent does not have the required novelty or inventiveness. While courts may stay the infringement case pending the outcome of the invalidation process, they are not required to do so if the asserted patent is an invention patent.

To alleviate the issues caused by the functional division of the PRB in patent validity determination and courts in infringement analysis, Article 62 of the PRC Patent Law (中华人民共和国专利法实施细则) establishes the Prior Art Defence (现有技术抗辩) (PAD) in patent infringement litigations. Under this provision and the related Supreme People's Court judicial interpretation, if all the technical features in a product or process allegedly falling within the scope of protection of a patent claim are identical to or not substantially different from those of a prior art, there is no patent infringement, regardless of whether the product or process actually practises the asserted patent claim.