SIPO has issued Guidelines for the Determination of Patent Infringements (for Trial Implementation), which took effect in May, in a bid to clarify certain issues, including infringement liability during administrative proceedings, which local IP offices can institute. Local IP offices have the power to order infringers to stop infringing and issue fines.
But different local IP offices have issued conflicting guidance on certain issues, including the potential liability of OEMs and those that commission them to manufacture products, according to April Chu, associate in Shanghai at CMS China.
According to Chu, the guidelines confirmed that the OEM “infringes the patent right of the patent owner regardless of whether these infringing products are exported abroad or sold in China”.
She added: “The guidelines make it clear that although the commissioning party does not directly produce infringing products, its act of entrusting the OEM to produce such products also constitutes a ‘production activity’ under [China’s] Patent Law. Therefore, the commissioning party and the OEM shall be jointly liable for patent infringement.”
“The above stipulation aims at strengthening the protection of patent rights in [China] since it can prevent Chinese infringers from making use of the OEM model to avoid their liabilities for patent infringement.”