China’s Patent and Trade Secret Landscape in Transition: How Rising Damages, Post-Filing Data Doctrine, and AI-Assisted Inventorship Are Reshaping IP Strategy

Tuesday, May 26, 2026 

Executive Summary

In a May 2026 Berkeley Center for Law and Technology (BCLT) webinar, leading Chinese IP practitioner Binxin Li and Berkeley Law lecturer Yuan Hao examined China’s rapidly evolving patent and trade secret environment, concluding that escalating damages awards, a more patent-friendly post-filing data standard, and unresolved questions around AI-assisted inventorship signal a decisive shift from follower to innovator in Chinese IP practice.

Instructor(s)
Dr. Yuan Hao, BCLT’s Asia IP
Binxin Li, LeanWill

Keywords

China patent law 2025–2026 • Chinese trade secret protection • post-filing data China Supreme People’s Court • AI-assisted inventorship China CNIPA • China indirect patent infringement contributory inducement • Volume-Based Procurement (VBP) offer for sale infringement • China punitive patent damages • Standard Essential Patent (SEP) China arbitration royalty • doctrine of equivalents prosecution history estoppel China • how does China handle post-filing experimental data for patent validity? • can AI be named as inventor in Chinese patent applications? • China pharmaceutical patent linkage Bolar exemption 2025

Legal Analysis

From Patent Follower to Innovator: China’s Structural Shift and the Policy Architecture Driving Stronger IP Protection

China’s transformation from a technology-adopting economy to a genuine innovation powerhouse has become the organizing premise of the country’s current IP policy agenda. Li situated this transition in macroeconomic terms from the outset, observing that China has “start to transit from the follower tech follower to the innovators, as you can see, in many of the industries, including pharmaceuticals, including robot and AI.” The structural drivers he identified—a growing talent pool, a sophisticated and rapid supply chain, and a massive domestic testing ground for new technologies—have converged to fuel original innovation across multiple sectors. China’s IP administration has responded in kind, embedding intellectual property protection as a priority within the national five-year plan and directing CNIPA to issue more detailed guidance on AI-associated inventions, data protection, and technology export controls. The legislative cadence has accelerated accordingly, with more frequent amendments to patent and trade secret statutes and a rising volume of Supreme People’s Court judicial interpretations. Li also flagged the ongoing discussion around establishing a National IP Appeal Court, which he characterized as a structural reform capable of simultaneously expanding judicial manpower and improving decision quality. As Li noted, several predictions made at an earlier BCLT program on China IP have “become true, and has become more and more like a common practice in the society.”

Statistical indicators reinforce the qualitative picture. China has become the largest patent-filing jurisdiction globally, taking close to half of global filing volume, while holding the second-largest cumulative share of Standard Essential Patent (SEP) filings in telecommunications, trailing only the United States. In pharmaceuticals, China now ranks second in branded drug innovations, with cross-border business development deal volume reflecting substantial international investor appetite for Chinese biotech assets. Damages awards have tracked this trajectory: Li observed that “the court willing to award higher damages, and the percentage for all the cases get above the meeting damages awarded is increasing as well,” and punitive damages—formally introduced in recent years—jumped nearly thirty percent in awarded value from 2024 to 2025. Li predicted the trend would persist: “the court will try more on punitive damages to further determine the value for infringement.” Together, these figures reflect a legal environment that is both more sophisticated and more demanding than it was even five years ago.

Post-Filing Data, Offer-for-Sale Doctrine, and the Patent-Claim Consistency Problem: Doctrinal Developments Reshaping Chinese Patent Enforcement

The webinar’s most technically dense discussion concerned the evolving standard for post-filing experimental data. The analytical baseline is the Supreme People’s Court’s (SPC) earlier two-factor framework—articulated in the University of California case—requiring both a positive condition (the technical effect is implicitly disclosed in the specification) and a negative condition (the data does not extend beyond the specification’s support). In Novo Nordisk v. CNIPA, released by the SPC at the end of 2025, the court advanced the standard materially in favor of patentees. The case involved a GLP-1 diabetes drug for which the patent specification described a general experimental protocol—testing on rats and then minipigs to assess drug persistence—but provided no compound-specific numerical data. Li explained that CNIPA had rejected the post-filing data, concluding that “since you only gave a general description regarding what kind of experiment that you’re going to try on all this candidate, however, there’s no concrete data written in the specification, therefore this technical impact… will now be considered as discredited or disclosed in the specification.”

The Beijing IP Court partially reversed CNIPA, accepting rat data generated before the priority date as consistent with the specification’s general description but refusing minipig data for want of an adequate protocol description. The SPC reversed on the minipig data as well. Li summarized the court’s reasoning: reading the specification contextually, it was clear that “the patentee run the candidate drug through the rats and then through the pig and then they actually also mentioned, you know, what’s the criteria for the move on to next stage of testing and screening,” such that the long-lasting pharmacological effect should be deemed disclosed. Li characterized the SPC’s overall message as establishing “a very broad recognition on the disclosure from the specification,” and assessed the resulting standard as “less objective on the examination” of what has been disclosed—giving patentees considerably more room to argue. He also noted that while the ruling addressed inventiveness, “I wouldn’t be surprised, this will be cited as a defense for the patentee.”

In the pharmaceutical patent linkage domain, Li’s firm represented Sandoz in litigation that resolved whether a Volume-Based Procurement (VBP) application constitutes an offer for sale. Li summarized the SPC’s holding in Sandoz v. Hansoh in a single sentence: “filing application for VBP will be an infringement.” The court’s rationale was that in the VBP context “you are promoting your own product before your customers, and therefore this is clear, satisfy all the factors regarding offer for sale.” By contrast, in MSD v. HEC, the SPC reached the opposite conclusion for National Reimbursement Drug List (NRDL) applications, because the generic’s filing uses only the API’s generic chemical name—“a general name, and in that way they consider, okay, anyone can file it,”—removing the specific product-promotion element that was decisive in the VBP context. On the separate issue of claim-construction consistency, Li described the SPC’s joint-panel mechanism in Shenghe v. Huana and Huamei v. CNIPA: constituting a single panel to hear argument simultaneously in both the invalidation and infringement appeals so that “the panel going to hear the debates from regarding both proceedings from the patentee at the same time, so that would restrain the patentee, give contradictory claims and constructions.”

AI-Assisted Inventorship, Damages Methodological Maturation, and the Systemic Challenges Still Facing Chinese IP Courts

An audience question on AI-assisted inventorship prompted the webinar’s most forward-looking exchange. Li confirmed that CNIPA has issued guidance on AI-associated inventions and that the current Chinese legal position is clear: “in terms of inventorship, AI cannot now be recognized as an inventor of the patent, so that is a clear signal, and I wouldn’t say that going to change for the near future.” The harder challenge, Li acknowledged, is calibrating the threshold of qualifying human contribution where AI performs molecular screening and protein structure prediction. His practical recommendation for practitioners was that “the lab record, particularly what the scientist has been discussed and tried, explored positive results and negative results need to be more carefully recorded to reflect the human contribution on the drug generation.” Looking further out, Li predicted that “the human contribution [is] going to be less and less, and in that way the authority standard [is] probably going to be involved accordingly as well”—and speculated that at the extreme, the patent system itself might require fundamental rethinking.

Hao offered a complementary theoretical framing from his own scholarship, arguing that human beings retain a strong hold at the stages of “problem finding and framing” and at the final stage of making “the value judgment as a last step,”—contributions he characterized as significant enough to sustain inventorship. He argued that the large language model methodology dominant in current AI systems “is not going to change too much in a foreseeable future” in this respect. Both speakers agreed that significant AI-inventorship case law has yet to emerge from Chinese courts, though the policy debate is intensely active. Hao announced that the issue will be further addressed at the Second Global AI and IP Conference in November 2026 and the Seventh Berkeley-Tsinghua Transnational IP Conference in October 2026, both hosted by Berkeley Asia IP.

On damages methodology, Li reported a meaningful shift in judicial practice. Previously, courts would routinely “consider all the factors, therefore they fall into the statute damage,” but he observed that they are now willing to “go with details, examination on starting point is parties evidence, so they go closer, spend more time, and take a closer look on parties’ evidence, and then come to a calculation.” Evidence admission has improved in parallel: judicial appraisal reports and expert witness testimony on damages, previously unlikely to be admitted, are now treated as relevant, which Li called “a very clear signal the court are willing and also willing to take a relatively more, more tolerant approach for the admission of various evidence.” For trade secret damages, the court in Jingdiao recognized that where a product is manufactured substantially in reliance on a claimed trade secret, the trade secret’s contribution to profits may be assessed at one hundred percent. Despite these advances, Li catalogued structural challenges that will constrain the pace of improvement: low transparency in judgment publication, heavy caseloads, insufficient judicial manpower, underutilization of interim remedies, a legal talent shortage exacerbated by AI uncertainty, and the risk of geopolitical pressure on judicial decision-making. On the last point, Li stated directly that “nationalism also affects authorities’ judgment to some extent, when the geopolitical intents become intensive, and then the court may take a different position for their rulings”—a frank acknowledgment of a challenge that lies beyond the reach of doctrinal reform.

Generated by AI based on the Interview/Transcript below.

Key Takeaways

• Post-filing data standard broadened. The SPC’s Novo Nordisk v. CNIPA decision accepts a contextual, probabilistic reading of specification disclosure, moving away from the requirement for compound-specific numerical data and significantly expanding the scope of post-filing experimental evidence that patentees may submit to establish inventiveness.
• VBP filing is offer for sale. The SPC’s ruling in Sandoz v. Hansoh definitively established that a generic manufacturer’s application for Volume-Based Procurement participation constitutes an offer for sale and infringes the brand-name patent, while an NRDL listing application using only the generic chemical name does not.
• AI cannot be named as inventor—yet. CNIPA’s current guidelines exclude AI from inventorship, a position Li assessed as stable in the near term, though he cautioned that practitioners must document human scientific contribution rigorously given AI’s growing role in drug screening and molecular design.
• Damages are rising and methodologically maturing. Courts are moving beyond statutory damages to conduct granular price-erosion and market-share-loss analyses, and are now admitting expert witness and judicial appraisal reports on damages—a shift Li described as reflecting the courts’ determination to reflect true patent value.
• Indirect infringement threshold has evolved. After an initial restrictive period following the SPC’s judicial interpretation, courts have adopted a ‘substantial use’ standard for contributory infringement, stepping back from the exclusive-use requirement but still presenting enforcement challenges for multi-use intermediates.
• Claim construction consistency is improving procedurally. The SPC’s joint-panel mechanism for simultaneously hearing related invalidation and infringement appeals is a meaningful structural response to forum inconsistency, though Li characterized it as exceptional rather than routine at present.
• Trade secret protection is strengthening. Geely v. VM Motor established that reverse engineering of a commercially available product does not per se defeat a trade secret claim where the reverse-engineered data cannot accurately reproduce the full body of information the owner claims as secret.
• Arbitration for IP disputes remains nascent. Despite institutional efforts to promote arbitration as a pre-litigation settlement channel, most parties prefer full court proceedings; SEP disputes show somewhat greater openness to arbitration due to confidentiality advantages and the complexity of global royalty determination.
• Geopolitical risk remains a systemic variable. Li acknowledged that nationalist sentiment can influence judicial outcomes when geopolitical tensions escalate, a structural uncertainty that foreign IP holders must factor into their China litigation strategy.
• National IP Appeal Court would be transformative. Li argued that establishing a dedicated national appellate court would expand judicial capacity, improve decision quality, and provide a more coherent and accessible body of precedent—characterizing it as the single institutional reform with the highest potential upside.

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Interview/Transcript

This interview/transcript was based on a seminar on May 26, 2026 about Patent and Trade Secret Protection in China: Recent Developments and Emerging Trends. This conversation was held between moderator Dr. Yuan Hao, director of BCLT’s Asia IP and Competition Law Center, and Binxin Li, co-founder of LeanWill. Together, they examined recent developments in legislation, judicial practice and CNIPA, and industry trends, with particular attention to how evolving policies and landmark cases are reshaping the IP protection environment in China.

Yuan Hao  00:24

Thank you, Justin. Good evening, and good morning, everyone. Depending on where you are and when you are watching this webinar, we’re going to record this video and put it on Berkeley Center for Law and Technology (BCLT’s) CLE platform and our YouTube channel for review at a time convenient for you, so my name is Yuan Hao. I’m a lecturer at Berkeley Law, co-director of Berkeley Asia IP and Competition Law Center. Today, I’m very pleased to have Mr.Binxin Li, the co-founder of LeanWill Law Firm, with me to talk about the IP protection landscape of China today, especially in the fields of patent and trade secrets. I’ve known Binxin for years. He’s a proud Berkeley graduate, Master of Laws (LLM) graduate in 2014 right?

 

Yuan Hao  01:27

Yes. So, in my opinion, Binxin is really one of the top IP attorneys in China, and always striking me with his great professional skills, his integrity, and his distinctive personal style if I may say so. I find that Binxin is always able to provide both practical and creative solutions to challenges while mitigating risk in his practice. I’m not going to read what his bio word by word, given the limited time, but I do want to highlight that Binxin has nearly 20 years of extensive experience in Chinese IP, and his clients include both multinational and domestic companies across a wide range of industries, including healthcare, telecommunication, consumer goods, energy, entertainment over the years. His expertise also encompasses various IP issues covering filing, portfolio management, litigation, and technology transfers. Many cases I know Binxin represented were selected by the Chinese Supreme People’s Court and the lower courts, as well as the China National Intellectual Property Administration (CNIPA), the Chinese IP office, as top 10 cases or representative cases during the past two decades, and some of the cases Binxin has been involved with are literally shipping doctrines, IP doctrines in real time. So, before joining, before co-founding LeanWill Law Firm, Binxin was the IP co-head at Baker McKenzie Feng Shuon joint operation office. Later he became an equity partner and NGO law firm, and recently he brought his vast experience expertise in the past two decades and co- founded this promising boutique IP firm called LeanWill in Shanghai, and I’m very pleased to see that despite this young age LeanWill has begun to attract significant attention in China and internationally too, so without further ado, Binxin, why don’t you walk us through the IP, especially patent and trade secret protection landscape of China today first.

 

Binxin Li  01:40

Correct

 

Binxin Li  01:42

thanks. First, thank you for the invitation. And it’s always been my pleasure to be back and share, share a couple of the stories and experience with our colleagues and committee members. I do remember a couple years ago when we have a topic and sharing this discussion regarding regarding China IP protection. I think I do believe at that at that time China just became the second largest economic entity and we have been explored, you know, what does that mean to the industry and to the IP protection environment. So I think, as a guru, a couple of our guessing become true, and has become more and more like a common practice in the society. So I think now it’s also a good time to for us to review again on what’s going on in China, and let’s make a guess on the future as well. So this is, so this is actually my topic for today’s presentation, and I will talk about the present and the future for China protection. Let me go a bit before we dive into the details of the topic. I want to take a couple of minutes to introduce our firm, and as Dr. Hao mentioned, about IP particular firm and cover various services. I do want to spend a couple of seconds on the representative cases, which I actually also a reflection on the program in the involvement of IP system in China. So, we got a premium junction for process pad in China a couple years ago, and we also returned the client to get a very first infringement judgment, actually overruling CNIPA’s invalidation decision regarding the claim construction, and we got the very first patent linkage cases in China, which is another very interesting story to share, and we, we got a benchmark case regarding government center procurement for pharmaceutical companies just a couple years ago, and just recently we also got the first judgment, actually recognized combo use for pharmaceutical pattern, so things like that actually think is demonstrate the involvement again, demonstrate the involvement of our IP environment, so I would skip this one just verify, you know, the picture my profile picture is pretty much the same, not for the shop.

 

Binxin Li  07:09

So, thanks. So, before we, before we talk about IP issues, I do want to join the audience to a relatively bigger picture on what’s going on about China, about the market. The reason I want to talk about it, because I think overall the markets is the powerhouse for innovation and also for competition. So that’s actually the starting point for everything, and probably going to explain everything, what’s going on, you know, everything about what’s going on in China regarding IP. A couple things I don’t think it’s going to be news, and any news to the audience. We have think China start to be start to transit from the follower tech follower to the innovators, as you can see, in many of the industries, including pharmaceuticals, including robot and AI, as well, we start to see many more and more startups and the innovative stories generated from the China land. So a couple of the driving factors I think, as we mentioned a couple years ago, which actually the fuel for this transition, we have a growing talent pool who actually leading and become the founder all these startups in various industries, and we have a very sophisticated comprehensive supply chain, and which lead to the high productivity in, in many of the industries, and that means once we have an idea, you can, you can make realize it in very quick speed, and another thing that we have a huge population and huge market that’s actually reflect a testing field for various ideas, including AI, including pharmaceuticals, and all of this actually become the driving force for the for the innovation, I think the Economist magazine, there is a one chapter, actually particular address the innovation regarding China. I think they gave a quite fair analysis about, about, you know, what’s going on with the China market and all the driving forces and AI and the data as as any other countries each actually become another powerful tool for for the driving force as a driving force for the innovations and a bit downside of the China market that I think we also encountered the economy slump, and in recent years, particularly after the pandemic, and also we have some historical issues, along with our development in the past decades, so the government also start to reforming our social structure, and in terms of, you know, the populations, allocations, and also the developing industries, so all of this is, I think, as a very high level, what about the Chinese market, and I also put some of the statistical data at the bottom, as you can see, China already become the biggest patent filing countries, and almost take half of the volume, and of course, I think in the past we do have, we do have concern about, you know, all this malicious filings, and also we call so-called low- value patent filings through the patent office, China Patent Office. However, in recent years the government also realized the issues and start to take measures to deter such kind of malicious filings, and therefore I think overall the numbers still reflect to some extent on the true generation innovations in in China, and in another two particular industries, one is telecommunications, I put the accumulative Standard Essential Patent (SEP) filings in the past decades, and as you can see, although US still take the major portion of SEP filings, however, China is the second in line and also growing on the filings as well, and for pharmaceuticals, similar things happen as well. China already become the second largest for the brand drug innovations, and this is continuing happening, I think, by the by the statics last year the pharmaceutical business development (BD) deals by by number and the by volume China has taken the dominant position that actually means a lot of biotech assets actually attract the global investors and to reach a deal to strike a deal and bring the product to the overseas markets, so with that in mind I think when we talk about the IP, there are a couple of things happening, as I mentioned that the government start to realize IP become one of the crucial factors for the for the society, so from the policy level, the Congress and the governments put the IP as one of the key factors in the next five year plan, and we start to, I think, they give a lot of details, couple of highlights that the government start to promote more on the innovations and emphasize in the innovation is the driving force for the industry, and of course that also lead to the, you know, the profitability and for the companies and the government also emphasized the IP protection and also data protection as well, so we start to recognize data as intangible assets and to try some of the mechanism for the protection regarding data as well, and another side, since the technology goes so fast, and we start to take closer look on the regulatory control, which reflect on the tech export control, and also, for example, human generics in resources control as well, and down the stream, for the legislations, we see more frequent amendment on the law and the regulations related to IP issues, and the courts also start to issue more judicial interpretations to further enrich the law and the regulations regarding certain issues. Another part is that the judicial branch continue to do the reforming, and we start to see new setup on the IP IP tribunals at a lower level. And the net, the establishment of National Appel Court for IP has been discussed for recent years. I think this is also something as a next step, probably going to be going to happen, or to further reform the judicial branch and the for the practice, let me see the different authorities under the under the government. CNIPA still focuses on the prosecution, and some are more focused on antitrust. I won’t go through one by one, but I think overall all this administration bodies take take their steps to to issue more detailed guidance or regulations  regarding certain issues, and one thing I do, I also want to emphasize is about arbitration centers, I think including the international opposition centers and also the domestic ones, we, we all start to take, take more initiative into the IP disputes, and for the, for China, they also start to, to try to utilize the Opportunity Center as a mediation hub to kind of like split, split part of the IP disputes before court, and to for lower the court’s burden on the workload on the field. So this is a couple of the disputes I think in recent years the IP disputes volume going to remain high, and as you can see, over the past couple years, the cases numbers constantly growing higher and higher in terms of civil litigation and also administrative enforcement, and overseas battlefield also become heated. I took the US as an example. As you can see, there are cases involved both Chinese entities through each other, and also Chinese become the plaintiff to file the litigation against others. So, how also the number goes higher in like 30% in 24 in 2024 compared with last year. Sorry, the previous year, and in terms of damages, as you can see in the cup, in the cup sub in the past years, the damage award goes higher and higher, and we particularly pick up the damage award above 1 million RMB. As a example, as you can see, the trend is clear. The court willing to award higher damages, and the percentage for all the cases get above the meeting damages awarded is increasing as well. So this is actually also reflect the course position they want to recognize, you know, the damages in patent cases had been quite low and probably not truly reflected the value of patents, so they start to take measures to increase the number and to reflect the value of patents, and the punitive damages has been introduced in China a couple years ago, so as you can see, the case, although the case volume still very quite low compared with this, the huge disputes volume as I approach on the on the left up, but the trend is clear, the case volume is goes higher, and also in terms of the in terms of damage, a word is actually jumping 20 almost 30% from 2024 to 2025 I think from the justice message, I think that trend will not stop. The court will try more on punitive damages to further determine the value for infringement. Okay, when we talk about the pictures, I do want to make a couple of the pairing to as a, as a case study to reflect what’s going on and about China. So, couple of cases over for sale. This is the more on the pharmaceutical field, so in Eisai v. Qilu case, there is a this is the issue for the case is about whether filing application for volume-based procurement is constitutes as a trade as a patent infringement. Unfortunately, the core fund, no, there’s this, the Bolar exemption should be applied, and there’s no infringement for this application, and in the, in parallel, at the same time, we actually represent Sandoz v. Hansoh case, and for that case, eventually we, we won, we all, we are all way along to the Supreme Court, and eventually Supreme Court say no, although Eisai case already becoming effective, but Supreme Court has finally conclude that no filing application for Volume-Based Procurement (VBP) does constitute offer for sale infringement, and this become a benchmark case, and cited by by the follower market players when when VBP get involved in the IPD series. Another case is MSD v. HEC. This is related to the listing on the national reimbursement drug list, which is one of the pre step for VPP. However, for that case, which is also in parallel concluded by Supreme Court, to the contrary, the Supreme Court found out no, this is actually not constituted as an infringement, so I won’t go to the details on the rationale and the reasonings of from the court, but if you are interested, you can take a detailed look at the comparison for combo use, as I mentioned in China, Swiss-type claim is still apply for pharmaceutical for pharmaceutical use patterns, and I give, like, example, what is Swiss type means for the audience who then you know familiar with the pharmaceutical patterns, so basically this means you know a use of a combination of drug X and plus drug Y in the manufacture of Medicaid, Medicaid meant for treatment of a disease, so this is the, this is a drafting approach to avoid non-patent, non- patentable subject matter, namely the treatment of disease, which is not patentable in China, so in, in historically, you know, when we talk about the combo use, this, this type of claim, claims usually will not, not, will not even pass through the prosecution, so usually the city are going to recognize this is a treatment of disease, therefore the patent will not get granted, or you know, they consider this, they say, is no inventiveness for the patents whatsoever. So, in Chugai v. Livzon case, the Supreme People’s Court eventually recognized the patentability of combo use. They said, you know, although treatment of disease shall not be, shall be applied for US patent. If you know the, if, if they talk about features not really relate to the use of the drug itself, it’s more like the administration of the drug when during the patient treatment, that would not be that will not be patentable. However, they do recognize combo use as a special, as an exemption from from this type of treatment, treatment of disease territory. They recognize, you know, the combo use have certain inventiveness. to the industry, therefore it should be patentable, and when, however, when we talk about talk about the enforceability, Beijing IP court actually recognized at the first time they said that combo use is something should be recognized and can be enforced against the generics, however, when we come to the Supreme Court, Supreme Court overruled the decision and saying this should be restrictively interpreted the claims, therefore, because you have to, you have to have two drugs in the combination or formed in the in the package or or formed in the single drug to be recognized as a combo use, so therefore this this this combo use issue, because still become a critical one and unresolved before the court, the doctrine of equivalents. This another topic has been debased and tried before the courts form for years, and for that one, in recent cases, the court found out the value, or even out of size, the claimed number range deal could be considered as an equivalent. however, in another  two cases, the eggling was his great and the Chugai v Haihe. Anglin case, they mentioned that, you know, if this, this is a technical solution had been had been known to the market when the patent was filed, however, they didn’t claim in the, in the patent, that in that case, there’s no equivalent should be considered, and for Chugai v. Haihe, the Supreme Court actually overdo the previous, the President case law, saying to claim amendment without express favor will be lead to the dominant donation principle, and therefore since the feature has been donated through the amendment, therefore no, the doctrine of equivalents have no space to apply, and indirect infringement is also quite often happened in various industries, particularly in the auto industries. There are a lot of parts going to supply to, from the from upstream to the to the final product. So, couple of the cases in Novartis vs a Domestic Company, the court finally recognized, you know, one of the intermediates which used to produce the final Active Pharmaceutical Ingredient (API) of the drug. The court found out, you know, the API would be considered as a, as an infringement if the, if the API, sorry, the intermediate will be considered as an infringement if they lead to the manufacturing of the of the patented drug, however they also come out saying it’s also because the intermediate have other use, so it could be cut out for other applications, which consider as a non infringement, and there is an implied authorization use, so in the Burton v. Pinbo case, the court found out things that the patentee then then action then specified, you know, the product should be the bonding will be expressly only suitable for the particular booths, and they actually selling the product separately to the market without seeing any restrictions. In such case, the court saying, okay, there is an implement authorization to to the market players and also to the consumers. Therefore, for the for the bonding manufacturers, they are allowed to sell their product with as a as a implement authorization from the patentee. I see features. I think this has been talked about, talked a lot recently, and for this one, the ZTE v. Samsung case, China, Germany, and UK, they all actually issue their judgment regarding the global royalty rate, and there are differences, they are significant differences on the numbers, so for the audience who are interested to see the detail, the rationale analysis, and happy to dig on the cases and judgments. This is a huge topic we can spend a lot of time on, so I just want to touch base, and while we’ll not go to details, and for the trade secret, another topic has been has been tried in many cases in recent years. I want to particularly address one, one issue, you know, one, the trade secret actually embodied in the product, which is commercially available to the market. How that, how that trade secret will be recognized as information going to be recognized as a trade secret before the court in Systester v. Labthink in that case the court saying that you know if you have a confidential confidentiality label and you have a warranty restriction saying you cannot open the product to see the detail in structures inside of the product all of this are not efficient to to as a protection measures to keep your trade secret embodied in the product. However, in Geely v. VM Motor case, the core thing that although you know the car can be reverse engineering to see you know all the detail structure and and arrangement and the measures of the components, however, they cannot actually accurately reflect the complete set of the information claimed by the by the street hold trade secret owner, so therefore reverse engineering wasn’t a sufficient defense in this case. And one Systester v. Labthink  case was issued, the judgment was issued by Supreme Court. We also have a parallel case in the similar situation tried before the court. I think the court eventually also recognized all the informations carried by the product could be considered as a trade secret. The key probably, probably going to be laid on what’s the carrier for the trade secret, and that will be something become a crucial, crucial factor for the court to consider another thing about damage calculation, for damage calculation, which have been a pain in China IP cases for a really long time. So, as I mentioned earlier, the court start to pay attention to that to that issue, and in a couple of the cases, in Huiping v. Henglihong, in that one, the court actually takes the initiative to consider the price erosion on patent on the right holders product and the market share loss as for as a calculation for the damages, and in Jingdiao, Jingdiao case, the court also recognized, you know, if the product is manufactured basically relying on all the claim to trade secret, then the contribution of the trade secret could be considered as 100% when we, when we calculate the damages benefits enforcement, which also another particular debate issues in China. One thing is that I would like to read two issues. One is that inconsistency in claim construction, because in China immunization and enforcement proceeding are usually are separate, one is tried before CNIPA, one probably tried by lower patent offices or by the court, which you know these two proceedings are not really often they interact closely with each other, because the authority are separate, that gave the space for the patentee to make in some cases completed opposite claim construction before the before the different authorities, and as you can imagine, for the for the invalidation they try to make a narrow interpretation, and for the enforcement they also try to use a broader interpretation for their claims, so in Shenghe v. Huana, and also Huamei v. CNIPA case. The court tried to try to use a procedure to use a procedure approach to address this issue, so once the invalidation and also the enforcement come to the end to the appeal to the appeal stage, and they all come to the Supreme Court to try the case, and in that, in that, when that happens, the Supreme case Okay, I gotta try the case together with the same panel, and in that case, in that way, the panel going to hear the debates from regarding both proceedings from the patentee at the same time, so that would restrain the patentee, give contradictory claims and constructions, and  another approach I didn’t put cases here is that they also try to use a joint panel, meaning the court probably going to, who going to sit, try the case, going to going to host a joint hearings with the CNIPA, who going to try the invalidation, so in that case they gotta, they’re going to, they’re going to try the invalidation first, and the court panel going to audit the hearing, and the later on the log going to switch, the court going to host the hearing for the for the infringement, and the CNIPA panel going to audit the hearing as well, so in that case both channel going to hear the information if the debates from the from the parties and try the case, give the rulings afterwards. Another issue about Initial Public Offering (IPO), so IPO is the is approach for many of the staff to go to the capital market, and that become because the pre-IPO ambush, probably our US audience can also were quite familiar with this this tactic, so in the Luweimei v. Unitree case of the patentee actually filed the enforcement before the unitary go to the IPO, and they did some, a couple of the funny things, and including amend their damage claims during the during the during the trial, and to avoid the lower case filing fees, and later on increase their damages to brag, you know, to put pressures on the defendant, so the Supreme Court later eventually find out the plaintiff had a bad face for the enforcement, just just try to ambush the Unitree for their IPO and try to get some benefits from this from this patent enforcement and the later on unitary also file the counter counter claim against the patentee for the for the for the for the malicious lawsuit and then eventually the court also awarded damages to Unitree for against the patentee, excuse me, post-filing data, a very big topic in the pharmaceutical industry, and I do believe this also extend to other industry as well. So I won’t go to the details, so at the two, at the two bottom case, top case CNIPA actually rejected post-filing data for various reasons, saying, you know, the one of the key is that they claim the technical feature technical effects are not really disclosed in the specification, therefore the post-filing data post-filing data shall not be accepted, however, later on in the recent couple, in recent years, Supreme Court say no, this is too restrict, so University of California was this neighbor case, the Supreme People’s Court (SPC) say the post-filing data should be accepted based on the two factors, the positive factors and negative factors, and I do want to spend more time on the on the Novo Nordisk v. the market CNIPA case, which just released this year, in about at the end of last year, so SPC says that actually accepted the post-filing data, which Novo Nordisk, try to improve the inventiveness of of their of the of their drug, and I think the message is clear. The Supreme Court actually accept much broader recognition on the disclosure, what has been disclosed by the sophistication, and based on the probability, probability testing factors, and I think, as you can imagine, this actually also linked to the efficiency issue as well, and again, because sufficiency is not a unique issue in pharmaceutical industry, so I would say this probably going to expand to to the to other to other industries as well, particularly for example chemistries, that’s pretty much about all the cases I’m to share, I hope the contrast can bring some can can demonstrate the involvement of China practice. I think for the future the innovation and the competition start going to continue to grow in in this soil and court and the government going to continue to recognize the IP value, particularly for patent and trade secrets, so which lead to I wouldn’t surprise they’re going to have a new record high damages award for the cases and the complex issues going to continue to emerging, I think for patent similar things, and particularly, although I won’t touch base on copyright on AI much, but I think that will be a more interesting field to bring more complicated issues before the court for debates, and the course will cross-border disputes going to continue to increase, particularly even for domestic domestic companies, they probably going to file the lawsuit in US, in Europe, because this is also the major market for the business. China tried to be a preferable forum for the disputes, however, I think that’s going to be a long way to go for various issues, reasons I will talk about a couple of couple of them in the challenge section. I do believe China need to explore the establishment of a national IP appeal court because that will be further expand the manpower for the judges, and that could be address a lot of issues, so challenges, I think couple of issues have been criticized, and I would, I would say that will be take time to resolve. low transparency means a lot of judgment will not be public published before the platform, so therefore for the place practitioners and the market players, they are, they have very limited resources to know what’s going on regarding the regarding IP cases, and that would be the backfire to us for the for the improvement on our protection system, and because the huge workload, as you can remember, the huge volume of the cases, and the limited manpower before the court, so there are significant delay on the trial, and in terms of the, in terms of the examination period about the trial period, and also in terms of trial quality, so that will be remain as a huge significant issue in China. Low utilization on the interim remedies, including preliminary injunction, evidence preservation, assess preservation, all of this going to remain at the issue for for for various reasons and damages that have been touched based and again another thing that the market in developed quickly and the innovation generated like a on the daily basis particularly imparted by AI and the data however for the authorities, for the law, and the for for for the court, for courts, it’s going to take time for them to realize what the market actually needs, and sometimes they, they still think we are the followers rather than the innovators, and that’s actually going to be reflected on their judgment and the legal talents are in short, so again AI doesn’t help, so a lot of graduates consider having a little face on the future career development, so they are very hesitant to enter the to graduate to become a judge or become a, you know, private practitioner, so in that, in that  sense, we have, we are very short of talent for future cases, and political intention, and also uncertainties are going to remain as an issue for IP dispute disputes, so that’s going to, I think, again, I wouldn’t say I would say nationalism also affects authorities’ judgment to some extent, when, when the, when the geopolitical intents become geopolitical intents become become intensive, and then the court may take a different position for their, for their rulings.

 

Yuan Hao  43:18

Thank you so much, Binxin, that was, that was just amazing. I realized how actually daunting a challenge we have given you, because so much has been happening during the past few years, and it’s just virtually impossible to, you know, talk about Chinese IP current landscape in a comprehensive way, you know, but within such a limited time, you cover, you certainly covered a lot of grounds, which actually, by the reminds me of a conference I just attended a few weeks ago. A China observer told us that he said that whenever I’m trying to draw a conclusion on China, I feel like that blind person feeling a giant elephant, like in a different parts, you know, a touch, they, if you touch different parts, you might be prone to drawing different conclusions, and these conclusions may not be coherent with each other, so uncertain, I think that’s, you know, why your comprehensive introduction of when it comes to Chinese IP protection patent trade secret, cover so much ground, is very valuable to us, but for before I open the floor to audience, I’m sure I mean they have questions, I want to quickly just clarify a few places, because maybe our audience, and both today and future audience, maybe they have different formula familiarity levels with Chinese IP, so let me just maybe you know clarify a few places, if you, I don’t know, if you maybe firstly go back to the, to the offer for sale slide, and you show the difference in different course regarding whether VBP volume based purchase that constituted offer for sale, right? So, and there seem to be differences in different courts, but I wonder, you know, what’s the.. you don’t have to illustrate any of the details, but quickly, maybe you know some get some reasons, like, or what is the current law? Then what? What’s the take away from this? Then I know it might be difficult.

 

Binxin Li  45:42

No, no, it’s actually this is a become straightforward. So, although Eisai case is an effective judgment, however, Sandoz case was concluded by Supreme Court, and in short, filing application for VBP will be an infringement.

 

Yuan Hao  46:03

okay.

 

Binxin Li  46:05

That’s the takeaway. So,

 

Yuan Hao  46:06

Okay, yeah, but at the same time, the it’s also this SPC that finally application for listing in an RDL, the National Reimbursement Drug List. This might be a detail, but that’s that’s not considered offer for sale. Oh, I wonder about the reason.

 

Binxin Li  46:23

So, the reason is this, because when we, when we, when we talk about VBP, is actually the generic, you’re they’re going to be the generic, right? Right, they, they actually file the application to sell their own drug, their own generic drug to to the network, to the hospital network, so in that way they, they, the core consider. Okay, this is this clear. You are promoting your own product before your customers, and therefore this is clear. Satify all the factors regarding offer for sale, and we don’t have any hurdles from the first, first instance, all from and under this under the appeal, so all the court, the two courts actually recognize the same. For the for the National Reimbursement Drug List (NRDL), the, you know, the drug list, the reimbursement drug list, the court take a different conclusion because the course saying that the generic file, the application is only used the API name or the generic name of the drug, not only they’re not, not, not generic generics brand drug name,

 

Yuan Hao  47:35

okay,

 

Binxin Li  47:36

And in that way, so this is this is a this is the name, this a chemical name going to be used for, for, for either the, for either the brand drug or the generic drug. So, it’s a general name, and in that way they consider, okay, anyone can file it, and that’s that’s the last consideration as a promotion for the generics own drug.

 

Yuan Hao  48:00

Good. Okay,

 

Binxin Li  48:01

So whatever I do take a, I do have a different position on this conclusion on just conclusion regarding infringement, but nevertheless this is very

 

Yuan Hao  48:14

Okay. Yeah, good. My second question regards the, you know, much bigger issue, as you mentioned the post-filing data, so if you could quickly, yeah, I think it’s here, so because the, you know, the Novo, the Novo Nordisk case is so important, and my own understanding is actually is built upon this case, in the previous year, you listed here, which you know, the final number 287 the SPC basically articulated this two-step test, you know, including both a positive condition and active condition, in order for the data to be included, then on top of that, this very recent case, I mean, recently released Novo Nordisk just went one step further, saying that you know in here regarding inherent implicit disclosure of step one, the positive condition, right? So, meaning, could you illustrate a little bit, you know, on this, because this is so important. I’m, yeah, so important. So you maybe illustrate a little bit in light of the facts of Novo Nordisk case.

 

Binxin Li  49:35

Certainly, for I mean, for both cases, actually, it’s go with the inventiveness, and I think, let me, let me go with a little bit details on the Novo Nordisk case, so for that one, the pattern mentioned a whole group of candidates, chemical about chemical drug candidates, right? And they mentioned, okay, this is a GLP-1 drug, and for diabetes. And so, when we go down there in the specification dimension, okay, well, we need to do test, right? So we tested on the rats, lab rats, and later on we be also going to pass on the on the minipig, so in that way we can see how, how, how long the drug can can last in the animal body,

 

Yuan Hao  50:31

right?

 

Binxin Li  50:31

So, which is one of the key factor key impacts claimed by the pattern, so in that way, in that specific, in that application, however, there are no clearly clear experiment experimental data directly to any of the specific compound. Okay, then when we come to the invalidation, the CNIPA actually exam, you know, the exam, the specification conclude that, okay, so since you only gave a general description regarding what kind of experiment that you’re going to try on all this candidate, however, there’s no concrete data written in the specification, therefore this technical impact, we are saying, you know, the long-lasting in facts will now be considered as discredited or disclosed in the specification, and therefore they actually significant reject all the post-filing data. However, when the case appeal to the Beijing IP court, the DFL says hold on from the from the rats data, actually Novo Nordisk submitted before before CNIPA. All this data actually generated before the before the filing date, well before the priority date, actually for the patch, which actually echo back to what’s described in the specification. Therefore, all the data should be considered for the minipig. They consider, however, all this is is relative lights. You can imagine this is a first you need to do to the rat, the rat testing, and then you go within the minipig, however, when we go within minipig, there’s no clear, clear description regarding how you run the run the test on all these candidates, so  therefore the Beijing IP court say no, all this post data post-filing data regarding the minipig is not really because all because the lack of a sufficient description or disclosure from the from the specification, therefore all the post-filing data regarding minipig shall not be accepted. However, when the case go to the Supreme Court, the court saying, like, I think basically, in short, long story short, the course thing I based on the context of the specification, as you can see, of clearly the patentee run the candidate drug through the through the rats and then through the pig and and then they actually also mentioned, you know, what’s the criteria for for for the for the move on to next stage of testing and screening, so therefore eventually they think the course conclude that based on the context I think in general based on the context of the specification, the long-lasting in facts should be considered as disclosed from the specification. Therefore, all the data should be accepted from Novo Nordisk. So, as you can imagine, I think from this case, the court, as you said correctly, the court move forward, move forward further from from the University of California case, saying, okay, not only the two two factor, two two layer of testing, actually you, it’s I think, in short, it’s always a little bit more objective, about less objective. Sorry about yes, less objective on the on the on the examination. What has been disclosed in the specification? So that’s give a lot of space for for patentee to argue, and in short, that’s also the reason when we, when we try to draw the conclusion on what’s the learning or take away from Supreme Court, is that probably the there’s a very broad recognition on the disclosure from the specification, and like I said, as. Although this is this is addressed to the inventiveness issues in this case, however, as you can imagine, disclosure is a, is an issue actually linked to the sufficiency, so how the court got the sufficiency standard will be quite relevant, I wouldn’t say the case definitely going to, going to, going to set the bar to sufficiency issue, however, I wouldn’t be surprised, this will be cited as a defense for the patentee.

 

Yuan Hao  55:36

Very interesting to, you know, keep observing in this in this field post-filing data. I do have a few questions for you to clarify, but I see our audience has one question now, so I’m going to, I’m going to read it now. So to address, oh, it’s from Susmita. She’s, she’s like you, she’s a Berkeley graduate too. She was in my AI and IP course, very very good student last year, so so she said that as copyright frameworks globally, including recent developments in China, such as core decisions and policy discussions recognizing AI-assisted works, whether sufficient human creative input seem to be moving toward a meaningful human intervention standard. Do you see patent law involving similarly on AI-assisted inventorship? I think she means in China. So, in particular, how should courts and patent offices approach situations where a human frames the problem, I love this selects or refines AI-generated outputs, but the AI materially contributes to the inventive concept. It’s a very, very good question. Yeah, Binxin, what’s your observation in a Chinese context?

 

Binxin Li  56:58

Yes, yes, thanks for the question. I think this is a very important, but very tricky question. Let me try to answer from my, my observation. I think the government also CNIPA, and the court already recognize, recognize, you know, AI actually start to apply the in many industries and to accelerate the innovations, so therefore CNIPA also recently issued their guideline regarding AI associated inventions, how they should be recognized and patented under the under the law, legal framework, however, in terms of inventorship, AI cannot now be recognized as an inventor of the pattern, so that is that’s is a clear signal, and I wouldn’t say that going to change for, for the, for the near future, however, I do see a more tricky issue, as Susmita mentioned. I hope I mentioned your name correctly. If not, excuse me. So, whether AI is materially contributes to the invention, and how much human contribution is is involved in the invention is a very tricky and complicated issue. I would, I would say, for example, in let’s take pharmaceutical industry, as an example, so, as you know, particularly for small compounds or for big moleculars, you can use AI to do the screening, you can use AI to do the, to the, to do this to the protein structuring, so therefore there’s there we already have the drug generated by AI using AI tools, so in that way I think, in short, in short, to keep the patent patentable before the authority, the lab record, particularly what the scientist has been discussed and tried, explored positive results and negative results need to be more carefully recorded to reflect the human contribution on the on the on the drug gen on the drug generation, so this is something I would say probably going to become crucial, and of course I think with the development of AI technology, I would say the human contribution going to be going to be less and less, and in that way I would say. The authority standard probably going to be involved accordingly as well, but again there, that potential that could be a gap, so to recognize, you know, the crucial human recognition to the to the to the to the whole invention, but how that goes to the extreme, it’s, it’s a hard question. Maybe by that time we don’t need a patent anymore.

 

Yuan Hao  1:00:28

Well, this is it’s a fascinating answer you give, actually, because this is one of my most passionate fields, research field, myself as well. I apologize, Susmita. I mean, of course, we talk a lot about this. I mean, on my own view, I agree with most of what you said, Binxin, especially, you know, with how the, you know, mostly it’s the CNIPA and other Chinese course. There, we haven’t seen two significant cases regarding AI-assisted invention and pattern in a Chinese core, but seeing IPA, as you mentioned, did you know issue some general guideline currently may be experiencing like intense case studies, but I agree with mostly you know what you have said, except that I don’t, I don’t believe in the near future human beings role will be totally completely diminished. I mean, maybe you didn’t mean that either.

 

Binxin Li  1:01:25

Long term, I mean, long term, probably going to be

 

Yuan Hao  1:01:28

 I wrote, like two articles, one 117 pages, the other 45 pages to talk about why, if we continue the large language model, this methodology actually is not going to change too much in a foreseeable future, because you know, well, I’m not going to bore everybody today with my own research, but the thing is that human being may still have a strong hold in the inner original or truly creative problem finding and framing, and then, while AI could help to predict the solutions, on the other hand, human beings, you know, we are still very instrumental in, you know, in making the value judgment as a last step. So, basically, I frame all these into problem finding and framing. I’m arguing that, you know this kind of contribution is significant enough, but that’s another story. I think to answer Susmita’s question, you know, together with Binxin, is that you know similar to other jurisdictions, China is experimenting intensely, I mean, not not experimenting by discussing this issue, this is a common, very, as Binxin said, it’s a very difficult challenge, like, you know, how what kind of contribution, or what is the level of contribution, is significant enough for the human researcher to be qualified as the inventor. Yeah, but we have to stay tuned on this, and we’re going to continue discuss this in two conferences this coming autumn. A little advertisement hosted by Berkeley Asia IP, one is the second Global AI and IP Conference in November, then the other is the seventh Berkeley-Tsinghua Transnational IP Conference in October. I’m sorry, Binxin, you had, you still have something to say on this. I cut you off.

 

Binxin Li  1:03:28

No, no, you don’t. Thanks for the, for the, for the inputs. I totally agree with you. I think, in the foreseeable future, I would say, I mean, I think we, the scientists, still have a lot of contributions, and I think, well, again, let me, I think pharmaceutical is a very good example to observe the development of AI,

 

Yuan Hao  1:03:52

very good

 

Binxin Li  1:03:52

invention generation, because the AI need data is the is the foundation for everything, and the for for pharmaceuticals, because all the drug need to be tested goes through clinical trial, so there are tons of patient data, and which the quality is good, and there’s no contamination in general, there’s no contamination on that. So that’s actually helped the AI.

 

Yuan Hao  1:04:16

Actually, I do have a question for you. I’m Not sure if this is still your field. I mean, you seem very knowledgeable about this. I’m wondering about your clients, because I record into my research up until the end of last year, 2025 there are already about more than 80 AI  native drug discovery firms in China. Yeah, I’m just wondering if the training data of these companies about the because you just mentioned the quality of the data, like, do you know what kind of, like, data you usually, I mean, the range of data they use, the training models, I mean, just to maintain the quality. Quality of the because not all training data, even in the field of drug discovery and life science, it’s equal. I mean, AlphaFold, obviously you know everybody knows that a big reason for AlphaFold success is extremely high quality data, the protein bank, but when it comes to AI assisted drug discovery. I wonder.. I don’t know if you.. I mean, without touching your client trade secret, a general observation. Do you have any, anything to share there?

 

Binxin Li  1:05:32

I try to… I try to.. I try to share a couple of sense. I think, in short, because historically, for four small chemicals, then every the bank of chemicals actually the key, the crucial assets for pharmaceutical companies, so that’s actually become, you know, the pool for you to screening everything to try everything to pay along with for certain disease, right. And and then you know all the data generated from the past experiment, experiments, and testings will be the will be the fuel for the AI to to understand okay, all these different structures, what that probably lead to when we, for example, we talk about oncology, we talk about cancers, right? So how they react to certain targets, target, and all of that will be, will be, will be something useful for OER training, and of course, later on, you’re probably going to have patient data, and for the for the for the approved drugs, and also for the for the drug field at a different stage of a clinical trial, all this data is also valuable assets for the AI training, because that’s, that’s something may not be published to the may not be even fully published to the to the to the to the public. Therefore, that’s also something the company can use to train for the AI tools.

 

Yuan Hao  1:07:14

right?

 

Binxin Li  1:07:14

That’s also the reason, as you can see, a lot of even the even the big funds start to engage with AI companies, right?

 

Yuan Hao  1:07:23

Yeah.

 

Binxin Li  1:07:24

to for their discovery,

 

Yuan Hao  1:07:26

Right? Yes, we’ve seen plenty of that. I, since we are already here, this is not actually what I original plan, but Susmita asked this amazing question. So, since we are here, let me ask one last question regarding AI and patent. Do you see them in some of the AI native drug discovery firms using patented data to train their model patents structures a molecule drug, you know, patented structures.

 

Binxin Li  1:07:55

This part I’m not really aware of.

 

Yuan Hao  1:07:59

Okay,

 

Binxin Li  1:08:00

But I think I mean, because for the AI company, you can buy data from from different resources. However, if you know, for various reasons, they can, of course, they can use the data from the from the patents, or from the, you know, the academic papers, which actually probably contain more data than patents to train their, to the, to train their machine. However, this is something I would say, the quality and the volume of data is relatively limited.

 

Yuan Hao  1:08:38

Right? Yeah, I asked that because you know, I haven’t, haven’t heard many people, actually very few people talk about this yet, but I happen to know that some, you know, companies say they use patented, you know, structures to train, of course, it’s natural, right, and currently, according to my understanding, you might correct me, but either I mean both US patent law and Chinese patent law wouldn’t see this kind of training as infringement, patent infringement, but that’s another issue we can talk about, you know, AI and IP session. Yeah, that’s just

 

Binxin Li  1:09:20

not yet, no, not yet, right? Yeah,

 

Yuan Hao  1:09:23

Okay. So we’ll come back to the, to the.. I haven’t seen any new questions, so just let me finish the list of clarifications in your, in your PPT. My third question, I think, is regarding the indirect infringement, I don’t know if you can go there.

 

Binxin Li  1:09:49

Okay?

 

Yuan Hao  1:09:50

Right? You, you did list this condition, the elements of indirect infringement in China here. could you maybe just compare a little bit with the indirect infringement in US panel, I assume you, you know, you are familiar with, right? So they, yeah, that might help now audience to get a very clear picture of where we are in China here now.

 

Binxin Li  1:10:20

Certainly, so we, we actually, for the indirect infringement framework, there’s a, is there’s a long history of involvement in China, as I mentioned, so actually a little bit, historical background, as I mentioned in the, in the Carve-out case, so in that one the intermediate has a multiple use, but one of use is patented, right down to the stream is it’s a patented drug, lead to a patented drug, so in that one the court say, okay, so the intermediate manufacturer, what you, since you, since your product have a have a potential to be used to produce a patented drug. Therefore, this channel will be considered as an indirect infringement, and, and for you, they see something actually also you probably should know. Therefore, they concluded it’s positive on the indirect infringement, however, later on from the from the court, Supreme Court issued the judicial interpretation regarding indirect infringement. This is the element I list as the right diagram. So, for that one, they say that the defendant must aware of the pattern or should aware of the pattern and another thing that is the it’s actually need to be resolved into the direct infringement therefore directly infringement is the precondition for the recognition of indirect infringement which is basically similar to the US practice.

 

Yuan Hao  1:11:07

right.

 

Binxin Li  1:11:58

And the next level. The third factor would be either the accused product is exclusively used for the patent exploration, meaning they do not have any other use. Okay, and another alternative we call it contribution infringement, and another alternative scenario is that if the defendant actually proactively inducing someone to implement the pattern, basically saying, okay, please use my stuff to produce the patented product. Therefore, this is going to be considered an indirect infringement as well, so we call it the inducement infringement. However, I think the tricky one is on the green C, the exclusive use, so because as you can imagine many of the many of the product probably have multiple use rather than solely for one patented product in that in that scenario that means it’s going to be very harsh to enforce the patent right and so after the release of the judicial interpretation, I think the court take a harsh approach, restrict approach for a couple years, and then later on the court realized this could be this is this could be too not really effective for the protection, and therefore they start to step back a little bit, saying okay, substantial use. So, if the, if the product accused the infringing product is substantially used for the patented product, then therefore there’s a contributory infringement. So, in other words, so if, if the normal is the Carve-out case at current stage, they probably will not be recognized as a contributory infringement unless we have something else to to further prove the intention of the infringer, because the intermediate has multiple use, generally a multiple use, and probably making the patented drug is not the substantial use of it, so that’s that’s this is where we are, and I do see the concern of abandon the practice on Carve-out, and however, I think that probably the next informant in this, in this topic.

 

Yuan Hao  1:14:46

Okay, very clear. Thank you. Binxin, my, my last.. sorry, yeah, I just see another question, so I’ll wait a little. This is another question, all this from Yovan. Also, a very seasoned Chinese IP console, actually, have a question for Binxin. You touched on arbitration in intellectual property. Based on what you’ve seen, is it actually working, particularly for SEP-related issues? It’s a good question, not a good question. Yeah,

 

Binxin Li  1:15:20

Yes, so very good question. Thanks for that. I think, in short, we are still observing, so that’s indicating, although you know the court try to promote the arbitration as a, as an alternative channel for to settle the case at the early stage, before we go to the full trial. However, many of the cases they are not really willing to settle at the early stage, because everyone thinks, you know, the penalties think they are infringing, and the defendants think, okay, whatever, let the court decide, and otherwise you know the damage probably low, and your patent probably can be invalidated, and for various, for various reasons, the party may not be entered a mediation stage. So, in short, I see I don’t think they are. In short, I think for general for all the patent cases or fortress cases, I don’t think it’s work as the authority planted, so most of the kids still flush into the into the court and and willing to take the long, you know, trial, the trial period, and another thing is that for SEP issues, I think that will be a different story. At this stage I think both part, both the both the patent holder and also the implementers are considering this channel, and but again, because court litigation is a pro, is a, is a powerful tool for the negotiation, and, and for I think I current state they are still waiting to go to the court to try, try to pressure the opponent, so in that way I don’t think arbitration will be, will be a preferable approach to make a negotiation. However, I think both parties, both sides are considering this is arbitration approach because the confidentiality and because the potential risk on the royalty, for example, on the royalty rating assignment at the conclusion, so overall this is, I think, in general ICP field probably are more keen to explore arbitration than compared with other tech industries.

 

Yuan Hao  1:18:04

I agree, Yovan, actually, I’m curious about your thoughts, so I apologize. This is a webinar, so you can speak, but maybe you know we will talk later, and you can speak in our next conference, so you know. Back to the to another issue, I just need a little bit, not clarification, you talked about clearly, but I’m just want to ask a bit more questions regarding damages, that’s another very important issue Binxin, because I’ve been, you know, always wanting to do, like, a strict rigorous empirical research of how the damages in IP litigation in China has been evolving, but as  you know, the, you talk about this in a challenges part, lacking actually enough judgments online. Let me put this way, I can’t do a rigorous empirical study, so I’m just wondering, you know, I’ve been observing at BCLT and Shanghai Jiao Tong Law School. We hosted a joint workshop on patent damages last summer, as you know, you were there, but your anecdotal observation in the past few years. Do you, did you see a meaningful increase of other methodologies in damages calculation? I mean, for the audience that’s not familiar with this, so there you want to talk about, like, there are several different methodologies. Lost profits now equals the same priority with infringing profit, then the third would be the, you know, the times of the royalty, the fourth will be statutory damages, but previous, as you mentioned previously, it was maybe 99% statutory. Damages, but now I did see, you know, you show the substantial increase of the percentage of cases higher than 1 million renminbi, and I’m wondering, like, maybe a lot of those are not statutory damages, and did you see a meaningful increase in all the methodologies in courts?

 

Binxin Li  1:20:20

Yes, yes, I think the answer is positive. I do see, I do see significant, significant improvement from the judicial practice. Yeah, the court usually, the court got to say, you know, consider all the factors, therefore they fall into the statute damage, and , but but now I think the court are willing to explore to go with details, examination on starting point is parties evidence, so they go closer, spend more time, and take a closer look on parties’ evidence, and then come to come to a calculation, so as I mentioned in the slides, there is exactly the court take the take the position to do the calculation regarding the price erosion and also the market share loss come with the number, so this is something I see we see more cases and the more judges are willing to, willing to try, particularly when the party have have a good material or good evidence to to build out the build up the foundation. However, I do, I will say a couple things. I think the improvement is quite significant. However, we still have a long way to go in couple of the couple of the issues. One about, sorry, step back before we talk about that. One another thing I think, as a demonstration on the improvement is the evidence admission. So, in the past, like for example, expert witness, or you know, judicial appraisal report regarding damages, probably will not be considered

 

Yuan Hao  1:22:07

right.

 

Binxin Li  1:22:08

So, but now the court are building, actually, as in the audience, and you, and you, you may already know the court actually sent a message saying, okay, we start to consider, you know, the expert witness report, and also judicial report, regarding a preliminary report regarding the damages calculation, so all of this is actually a very clear signal the court are willing and also willing to take a relatively more, more tolerant approach for the admission of various evidence.

 

Yuan Hao  1:22:47

Yes, I see many cases. The economic witness expert witnesses now are involved, especially in the standard essential pattern cases.

 

Binxin Li  1:22:58

Yes,

 

Yuan Hao  1:22:59

yes,

 

Binxin Li  1:22:59

that’s

 

Yuan Hao  1:23:00

actually one without right, yeah, and

 

Binxin Li  1:23:04

I think it is expanded to other cases as well,

 

Yuan Hao  1:23:06

Yeah, to right, and you did mention the price erosion, and that is a very sophisticated, actually, analysis as part of the lost profit, you know, yeah, so it’s difficult really to to assess that, so I see a determinant of poise, the willingness by at least some Chinese courts. Yes, you know, Beijing, Shanghai, you know, Shenzhen, there, and others, actually, they are much more willing to to consider this very sophisticated methodology.

 

Binxin Li  1:23:45

Correct. So, so, so, basically, I think that’s the, I think this similar to a couple years our, our copy on in a couple of years ago regarding a case law, so I think for this part, this, the, this, the, this the starting point we see the, we see the hope, and this goal is a lot of good, positive trend, and hopefully it’s become, it’s grow and become a more common practice before the court.

 

Yuan Hao  1:24:13

It, yeah, I totally agree, but Binxin for myself, I feel this is a really exciting period, as you said in the beginning, this is a great transition. Like China is transitioning from more like an IP recipient or implementers, you know, users of new technologies into like innovators and IP solvers. If I can use that word, and for various reasons I don’t know if they’re international, they are as many people as 10 years ago interest in Chinese IP, but I think personally I think will be a mistake to lose interest in Chinese IP, and this is really very exciting period I. And I, my own observations, you know, also from your PPT today, is there it seemed to be like two trends rising during a continue to rise during the past few years, one is that Chinese courts are continuing to strengthen IP protection, you know, increase of damages, like pulling back from the over harsh standard for indirect infringement, an expansion of doctrine of equivalents, and also the, you know, the rising royalty of SCP, and also the punitive damages. To be honest, I don’t completely agree with all this. I mean, I don’t, I don’t think necessarily if it’s strengthening or you know more damages or punitive damages necessarily mean is good, but I do also see the second trend is that you know at least in many circumstances Chinese courts are trying to calibrate better the IP protection with the technologies inventive contribution, and I’m particularly impressed with you mentioning the, you know, the SPC Supreme People’s Court, and the CN IP, and they’re they’re composing the same panel to make sure that current claim construction are consistent on both ends on the patent invalidation and patent infringement, and so let me ask you one last question. I mean, for our time is running out. Sorry, do you see this as a trend, or is this the joint panel by SPC and CNIP? And to make sure it’s consistent, do you see it as a trend or as exceptional case?

 

Binxin Li  1:26:46

I will see it more like an exceptional case. So, although the court tried to take an approach to address the issue, however, I think procedure procedurally procedure wise, excuse me, it’s hard for the for the case when they appeal, it’s going to be eventually at the same time meet, meets before the meet each other before the Supreme Court, and when we see, when we see the joint hearings again for the court, they are usually sitting in one place and CNIPA sitting in Beijing, and so it’s, it’s, it’s take time to arrange the schedule. I do, I do hope you know, because you know right now we have the virtual meeting, we have the virtual hearings, so it’s much easier to conduct remote hearings from the authorities. Therefore, it’s better. It’s I do hope they can, they can use the virtual meetings to, to have a joint hearings between the court and the CNIPA. However, I didn’t see that happen before the, before the, before the  authorities, and, and I do, I do see, you know, although this is probably one approach to go, I do hope there are cases the court going to condemn the penalty for such kind of misbehaviors, and that probably could be another, you know, we have the malicious lawsuits, and we have, we have the bad good faith principles, so I think the court may be able to use it as a tool to deter such kind of behaviors.

 

Yuan Hao  1:28:29

Okay. Well, stay tuned. Thank you so much, Binxin, for your wonderful presentation, and you know, taking your precious time to chat with us. And

 

Binxin Li  1:28:40

thank you.

 

Yuan Hao  1:28:40

Yeah, thank you. Our audience would stayed up until last minute, and also very importantly, thank you. Thank you, Justin. You’ve been great. I’ve been the best, actually. Thank you, everybody.

 

Binxin Li  1:28:55

Thank you for the time.

 

Yuan Hao  1:28:56

Have a have a great day.

 

Binxin Li  1:28:58

Bye.