The Legal Regulation Of Patent Laches In China

In order to stimulate and encourage more people to participate in inventions, thereby promoting scientific and technological progress and social development, the “Patent law” gives patentee exclusive rights in a period of time. But patent is essentially a legal monopoly, and this inherent monopoly offers patentee the possibility of abuse of patent. Patent laches means that patentee knows another person using his legal patent but deliberately doesn’t claim right timely, waiting until infringement expansion to a certain size, and then files a lawsuit to obtain high compensation. The nature of patent laches is negative patent abuse, and it has great harm. First, it will bring infringer serious economic losses and difficulty of proof on. Once patent laches is supported by the court, infringer should pay patentee a large amount of damages which is much higher than patentee initially can propose. What’s worse, he should also stop production and sales behavior, which may cause a fatal blow to himself. In addition, patent laches will lead to loss of important evidence and witnesses, which will bring infringer burden of proof, and reduce the efficiency of court proceedings. Secondly, this behavior will harm interests of the public and other social subjects. If the law allows patentee using right to blackmail others, their invention enthusiasm will be affected, and over time it will hinder the creation of inventions and technological innovation. At the same time, this behavior will lead to a waste of social resources, and harm the public interest. Thirdly, it violates original intention of “patent law” which is to maintain balance of interests. “Patent Law” is designed to make patentee’s interests and others interests as well as the public interests reach an expected balance, but patent laches breaks this balance, so we must regulate it. The legitimacy of regulating patent laches reflects in two aspects. On the one hand, patent system priority to protect public interest, on the other hand it adjusts the restrictions on the personal interests to the minimum. Visibly, regulation of the patent laches accords legitimacy requirements of interests balance.There is no provision about patent laches in Chinese current law system, In practice it mainly applies the principles of good faith, prohibition of abuse of rights principle and statute of limitation to regulate this behavior. The principles of good faith and prohibition of abuse of rights have some characteristics such as summarized and abstractly, and they can contribute to judge when they combined with other regulations, but they can’t be used as an individual basis for judgment in trial.The article sixty eight of the “Patent Law” and article twenty three of relevant judicial interpretations provide the statute limitations of continuous infringement. According to the regulation, whether patentee sues over the statute of limitations or not, he is also entitled to the claim of stopping infringement and damages claim, and statute of limitations only affects the amount of damages. It is unreasonable. Firstly, patentee’s claim to stop infringement should not be applicable unconditionally, and it need a comprehensive consideration about interests of infringer and the public. Secondly, the damages claim is easily be taken advantage of by patentee, who will select the best time to sue to obtain the greatest amount of compensation. Finally, the statute of limitations focuses on time as standard, rather than patentee’s subjective state and infringer’s actual damage. This is the reason why law protects patentee’s behavior. Accordingly there isn’t an appropriate way to regulate patent laches, and we need to explore new method of regulation under patent law system.In order to regulate patent laches, the United States jurisprudence established the laches defense system by jurisprudence and the system was mature in process of continuous improvement. Through analysis of three American classic cases, we can find that in order to identified laches, laches defense system considers not only mechanically the time, but also with behaviors of both patentee and infringer. Specifically, if patentee delays lawsuit with no justify unreasonable, resulting in goodwill infringer suffered substantial damage both in economy and evidence, the system can be applied to defense patentee. As for identifying time and reason of delaying, judges will take a discretion depending on merits. Once defense established, infringer doesn’t need to assume the tort liability for damages before tort litigation, and he may continue to exploit patent in the case of willing to pay a reasonable fee for use.Unlike the United States, Germany and other civil law countries apply existing verwirkung system to regulate patent laches. Under this system, if patentee doesn’t claim within a certain period, leading to the situation that infringer has a reasonable reliance patentee will no longer claim the right, infringer can defends patentee’s claim of stopping infringement and damages claims. Verwirkung is based on the principle of good faith, and patent laches violates this principle, so it can be regulated by verwirkung.The author proposes the suggestion of constructing Chinese laches defense system from theoretical and legislative aspects, by learning from the US laches defense system and verwirkung system and combined with China’s national conditions. With regard to theoretical aspect, there are three point. Firstly, this system regulates patentee’s malicious laches. In other words, it needs two elements: knowing the existence of infringement and delaying lawsuit without good cause. secondly, the applicable condition of laches defense is existed an unreasonably delay. With respect to the good cause of delaying lawsuit, we can make a specific list in relevant judicial interpretations, and set the fallback provisions. As for infringer’s substantial damage, we can do legal presumption. In other word, as long as patentee delays exercising right over a period of time, it can be presumed directly that this behavior causes damage to infringer. This design embodies the legislative intention of laches defense system which is to prompt malicious patentee to claim rights by punishing them. Thirdly, once laches defense established, patentee will lose claim to damages, and his claim to stopping infringement will be subject to certain restrictions. Specifically, laches eliminates infringer’s liability of tort damages before patentee’s prosecution. Patentee can only require infringer to stop infringement, and if there is evidence that after stopping infringement infringer will suffer far greater losses than patentee’s losses when infringer continuing infringement, court may allow infringer to continue using the patent as long as they pay a reasonable fee.With regard to legislative aspect, we can modify article sixty eight of the “Patent Law”, and add new provisions about laches defense while retaining original ones. the first existing provision of article sixty eight is about general limitation of actions, and it can regulate patentee’s inadvertent laches, while Added new provisions can regulate patentee’s malicious laches. Therefore, Article sixty eight of the “Patent Law” constitutes a complete one for regulating patentee’s laches due to different causes. This design is feasible, and also be consistent with patent law’s purpose of maintaining balance of interests.