Intellectual Property Protection

Introduction

In early 2023, two final judgments in three related intellectual property matters were made public by the Supreme People’s Court of China (the “SPC”).[1] These judgments represent a significant development in the protection and enforcement of intellectual property rights (“IPRs”) in China, with particular implications for foreign-invested enterprises. This article provides a brief review of these high-profile cases and offers recommendations for foreign companies navigating the commercial landscape in China.

The Cases: A Brief Overview

Golden-Elephant Sincerity (“GES”), a foreign-invested chemical company, holds proprietary rights to trade secrets and two patents concerning the production of melamine.[2] In April 2014, it was revealed that Shandong Hualu-Hengsheng Chemical Co., Ltd. (“SHH”) was involved in developing a melamine production line that was strikingly similar to GES’s own design. Mingda Yin, GES’s former chief engineer, was implicated in the unauthorized transfer of confidential information to SHH, raising serious legal and ethical concerns.

Subsequent investigations revealed that Mingda Yin may have provided GES’s confidential information to two additional companies responsible for the design and/or engineering of SHH’s production line, Ningbo Fareast Chemical Group Co., Ltd. and Ningbo AT&M Environmental & Chemical Engineering Design Co., Ltd.

GES, along with other plaintiffs, filed a series of civil lawsuits against the alleged infringers for patent infringement and misappropriation of trade secrets.[3] While the lower courts’ judgments were not entirely favorable to GES, the cases were then appealed to the SPC, and the SPC overruled the judgments of the lower courts and granted enhanced remedies in support of all of the plaintiffs’ requests.…

Continue Reading Landmark Judgments in Chinese Intellectual Property Law: Implications and Strategic Considerations for Foreign-Invested Enterprises

Practice and Procedure

The ITC’s Recent Sua Sponte Use of 100-Day Expedited Adjudication Procedure

Over the last few years, the International Trade Commission (“ITC” or “Commission”) has developed procedural mechanisms geared toward identifying potentially dispositive issues for early disposition in its investigations. These procedures are meant to give respondents an opportunity to litigate a dispositive issue before committing the resources necessary to litigate an entire Section 337 investigation.

In 2018, the ITC adopted 19 C.F.R. § 210.10(b)(3), which provides that “[t]he Commission may order the administrative law judge to issue an initial determination within 100 days of institution . . . ruling on a potentially dispositive issue as set forth in the notice of investigation.” Although the ITC denies the majority of requests by respondents to use this procedural mechanism, the ITC has ordered its ALJs to use this program in a handful of investigations to decide, among other things, whether the asserted patents claim patent-eligible subject matter, whether a complainant has standing to sue, whether a complainant can prove economic domestic industry, and whether claim or issue preclusion applies.

In a recent complaint filed in Certain Selective Thyroid Hormone Receptor-Beta Agonists, Processes for Manufacturing or Relating to Same, and Products Containing Same, Inv. No. 337-TA-1352, Complainant Viking Therapeutics, Inc. (“Viking”) alleged that respondents had misappropriated trade secrets to create their own drug candidates to compete with Viking’s VK2809 (phase 2) clinical drug candidate. As required by Section 337(a)(1)(A) governing trade secret cases, Viking alleged that the respondents’ unfair acts caused injury and threatened to cause injury going forward to Viking’s domestic industry. Viking’s theory of injury was based on the assumption that Viking’s VK2809 drug candidate and respondents’ ASC41 and ASC43F drug candidates would both receive FDA approval, would both launch into the same market, and would compete with one another. Viking’s complaint stated that its domestic industry product drug candidate, VK2809, will be brought to market in 2028.

Unlike past instances where the ITC employed 100-day proceedings, the Commission took the remarkable step of placing this investigation into a 100-day proceeding sua sponte on the issue of injury, even though no respondent raised the issue of injury as a basis to deny institution or order expedited adjudication. See Notice of Institution (Jan. 20, 2023). Respondents had not even argued that Viking’s injury allegations were deficient in their pre-institution filing. Commissioner Schmidtlein wrote separately to express her disagreement with the majority’s decision to order and expedited proceeding, noting that “these issues [are not] suitable for resolution within 100 days.”…

Continue Reading Section 337 Developments at the U.S. International Trade Commission

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