The Supreme People’s Court held in a re-trial case that where an accused product was found prior art by an effective court decision, if the patentee file patent infringement lawsuit against the same product again, the patentee’s filing of lawsuit constitute bad faith.

The patentee Zhongxingda Rubber Plastic Co., Ltd. (“Zhongxingda”) has once filed two infringement litigations against Jinfuyuan Rubber Plastic Products Factory (“Jinfuyuan”) for infringing its design patent (ZL201430007210.4). (The accused product is identical/similar to the patent at issue.) In the first infringement case Jinfuyuan produced evidence that that the accused product belongs to the prior design, and later Zhongxinda did not attend the court hearing, so the case was deemed withdrawn. In the second infringement case, Zhongxingda sued the distributor of Jinfuyuan before the Zhengzhou Intermediate People’s Court. The court held that the accused product is prior design and thus doesn’t infringe Zhongxingda’s design patent. Zhongxingda didn’t appeal and the court decision becomes legally effective. Later Zhongxingda sued Jinfuyuan again before the Qingdao Intermediate People’s Court on the basis of the same ground. This time Jinfuyuan brought a patent evaluation report issued by the CNIPA finding the patent is valid compared to the prior art, which is usually a reference for court to find the design patent stable.  Zhongxingda later withdrew the case. During the proceeding of the third case, Zhongxingda’s design patent was found substantially identical with the prior design by the CNIPA in the invalidation proceeding.     

Jinfuyuan therefore sued Zhongxingda for filing patent infringement litigation in bad faith and asked for damages. The court of first instance found bad faith, but the court of second instance overturned the decision. Jinfuyuan appealed to the Supreme People’s Court for re-trial. The Supreme People’s Court found Jinfuyuan has already known the fact from the previous effective court decision that the infringement product doesn’t infringe its design patent, but still sued Jinfuyuan for infringement, held that Zhongxingda files IP lawsuit in bad faith and infringes Jinfuyuan’s legitimate rights and interests, and ordered Zhongxingda to pay 41,286 RMB damages Jinfuyuan.