People’s Supreme Court of PRC, Administrative Judgment ( No. 3 (2010))

November 26, 2010

Summary:

Due to infringement dispute with Honda Motor Co. Ltd. (hereinafter referred to as “Honda”) over a design patent (No. ZL01319523.9) titled as “Vehicle” (“the present patent”), Shijiazhuang Shuanghuan Vehicle Co. Ltd. (“Shuanghuan”) and Hebei Xinkai Vehicle Co. Ltd. ( “Xinkai”) filed, respectively in Dec. 2003 and Dec. 2004, requests for invalidation of the present patent at Patent Reexamination Board (“PRB”) of Chinese State Intellectual Property Office. PRB merged the proceedings for the aforementioned two requests into one, held an oral trial on Mar. 28, 2005, and made a Decision No. 8105 on Mar. 07, 2006, which declared the present patent invalid

Honda, not satisfied with the decision by PRB, started the legal proceeding at People’s No. 1 Intermediate Court of Beijing (“No. 1 Intermediate Court”). After hearing, the No. 1 Intermediate Court made an administrative judgment No. 779 (2006) on Dec. 25, 2006, which affirmed the invalidation decision No. 8105 by PRB.

Honda did not accept the judgment made in the trial and appealed to People’s High Court of Beijing (“High Court”). After hearing, the High Court made an administrative judgment No. 274 (2007) on Sept. 28, 2007, which dismissed the appealing and affirmed the judgment made in the trial.

Honda did not accept the judgment made in the appellate proceeding and filed a petition for retrial at People’s Supreme Court in 2008. The Supreme Court made an administrative judgment No. 43-1 (2008) on February 04, 2010, in which the Supreme Court decided that the Court himself shall hear the case. The Supreme Court established a collegiate panel in accordance with the law, held a court trial on July 15, 2010, and made an administrative judgment on Nov. 26, 2010, which vacated the administrative judgment No. 274 (220&) made by the High Court, the administrative judgment No. 779 (2006) made by the No. 1 Intermediate Court, and the invalidation decision made by PRB.

In the judgment, the Supreme Court explicated the methodology of determining identical or similar designs under Art. 23 of the Patent Law as amended in 2000.

Facts and Analysis:

The Japanese design gazette JP1004783 ( “evidence 1”) was presented as a major evidence to PRB. PRB held the evidence as the basis for invalidating the present patent.

PRB held:

As can be seen through comparison, the shapes of as well as the proportional relationship among various parts of the vehicles in the present patent and evidence 1 are substantially the same; and the general visual shapes and design styles thereof are substantially the same. Although the present patent and evidence 1 have minor differences in appearance, the differences are all local ones. According to the principles of whole observation and comprehensive judgment, the differences are slight changes in overall visual effect and style and thus are insufficient to produce significantly different visual effect to an ordinary consumer that leads to the conclusion that the automobiles of the present patent and evidence 1 are different models;  meanwhile the similarities in the major parts thereof cause the ordinary consumer to mix up the two designs. Accordingly, it was concluded that the present patent is a design similar to that of evidence 1 and thus does not comply with the provisions of Art. 23 of the Chinese Patent Law.

The No. 1 Intermediate Court held:

The present patent and the prior design are both designs for a vehicle. Because in everyday life an ordinary consumer makes whole observation on a vehicle when purchasing and using a vehicle, the comparison between the present patent and the prior design shall be made through the approach of whole observation. Although there exist differences between the present patent and the prior design, the differences are insufficient to produce significantly visual dissimilarity to an ordinary consumer in terms of overall design, because for general appearance of an vehicle, an ordinary consumer is more likely to pay attention to factors such as the whole design style, the profile, and the proportional relationship among various parts of an vehicle. Accordingly, the present patent is a design similar to the evidence 1.

The High Court held:

In the present case, the subject that makes the judgment should be a person having common knowledge on a vehicle. Such a person has some cognitive capability over the differences between products of different designs in terms of shape and pattern; he, however, will not notice slight changes in  shape and pattern. If an ordinary consumer makes whole observation over the present patent and evidence 1, the differences thereof have no significant effect on overall visual effect of the product designs; the present patent and the evidence 1 are, therefore, designs similar to each other. Viewed through whole observation, the two designs are substantially the same with regards to shapes and proportional relationship of the lengths/widths/ heights of various parts and general profile and design style of the vehicle body. The general profile of a vehicle body has the most prominent effect on the visual perception of an ordinary consumer. The differences between the present patent and evidence 1 are all local ones, which can only be distinguished by an ordinary consumer by paying special attention and making repeated comparison; such differences have no significant influence on overall visual effect. Consequently, in the case where the two are similar to each other in terms of general design style, profile, and proportional relationship among various parts, the combination of slight changes in some parts of a vehicle produces no significant visual difference. Thus, the present patent is a design similar to that of evidence 1; the present patent shall be declared as invalid.

In the retrial petition, Honda alleges:

1) In the present case, the subject that makes the judgment on whether the designs are the same or similar should be a consumer having common knowledge over the “sport utility vehicles (SUVs)” in dispute, i.e. a purchaser intending to purchase a SUV or a SUV user; nevertheless, in the judgment of the appellate proceeding, the subject is identified as a person having common knowledge on the category of all vehicles. Thus, there is an error in identifying the proper subject.

2) In the appellate proceeding, the shapes of various parts of a vehicle, the proportional relationship of various parts in length, width, and height, and the whole profile and design style of the vehicle body are taken as the objects for whole observation. But the proportional relationship and the whole profile of a vehicle body are regular design commonly known for the category of SUV; they have no significant effect on overall visual effect of a design. The present patent and evidence 1 differ in the headlight, foglights, front apron plate, tail light combination, grids, rear bumper and etc.; and the differences, except for those with regular designs, have relatively strong decorative effect and have significant influence on overall visual effect. The designs disclosed in the present patent and evidence 1 are neither identical nor similar to each other.

Honda therefore made the petition demanding reversal of the rulings made in the trial and appellate proceedings as well as the invalidation decision No. 8105 by PRB.

In the retrial, the Supreme People’s Court held:

According to the fundamental method stipulated in the Guidelines for Patent Examination, whether or not two designs are identical or similar shall be determined on the basis of the knowledge level and cognitive ability of an ordinary consumer, through whole observation on the compared design and prior design, and through comprehensive judgment over whether or not the differences thereof have significant effect on visual effect of the design of the product. According to the Guidelines for Patent Examination, an ordinary consumer is characterized in: he has common-sense knowledge on the status quo of design of the products in the same category or similar categories with the compared products, and has some cognitive capability on the differences in shape, pattern, and color between the compared products; he, however, will not notice slight changes of the products in shape, pattern, or color. One has so-called “common-sense knowledge” if and only if he knows the status quo of design of the related products but does not have any design capability; the “common-sense knowledge”, however, is not limited to elementary and simple knowledge. The so-called “whole observation” covers all the design features of the visible parts of a product, rather than some specific parts thereof. The so-called “comprehensive judgment” indicates a judgment based on all the factors that may affect the overall visual effect of a product design.

In the present case, the “whole” of the design of the vehicle in the disputed category of vehicles not only includes the general profile and proportional relationship among various parts of a vehicle, but also includes other factors such as the front, side, rear parts of the vehicle; all of them shall be observed and considered. When making a comprehensive judgment, one should weigh the influence of each of the parts on overall visual effect of the vehicle design according to the characteristics of the disputed category of vehicles. Regarding the disputed category of vehicles in the present case, the vehicles share similar profiles, which features have limited effect on the visual effect to an ordinary consumer; while the changes in the design features is portions such as the front, the side and the rear parts of an vehicle will draw more attention from an ordinary consumer.

Herein, compared with the vehicle design of evidence 1, the vehicle design of the present patent has differences in strongly decorative portions such as the headlights, foglights, apron plate, grids, side windows, tail light set, rear bumper, and ceiling profile. Particularly, the vehicle of the present patent has the following prominent, eye-catching, and visual-impacting design features: the headlight is in the shape of an irregular quadrangle ( similar to a triangle), with an apron plate in an inverted U shape and a grid having protective horizontal bars in the middle; the rear side windows is designed to be irregular quadrangle, and the rear window glass is separated from the tail light set by the window frame, with a smooth transition from the upper portion to the lower portion of the vehicle body; in the rear part of the vehicle, the tail light set has a design of column-shaped light that extends from the vicinity of the vehicle top to the projecting portion of the rear bumper and is narrow in the top and wide in the bottom, with the rear bumper in U shape having protective teeth.

It is evident that the above differences are obvious to an ordinary consumer of the disputed category of vehicles; the differences are sufficient to distinguish the design of the present patent from that in evidence 1 in terms of overall visual effect. As the result, the differences have significant influence on overall visual effect of the vehicle design of the present patent and that of evidence 1, the designs in the present patent and evidence 1 are not similar.

Issues:

When determining whether or not two designs (the compared design and prior design) are identical or similar under Art. 23 of the Patent Law as amended in 2000, how should one determine whether or not the differences between the two have significant effect on the visual effect of the compared design through comprehensive judgment, based on the knowledge level and cognitive ability of an ordinary consumer and through whole observation to the compared design and prior design, so that the criteria for the law application can be unified.

Holding:

1.    The administrative judgment No. 274 (2007) by the High Court and the administrative judgment No. 779 (2006) by the No. 1 Intermediate Court shall be vacated;

2.    The Invalidation Decision No. 8105 by PRB shall be vacated.

Reasoning:

The Supreme Court held:

The decision of PRB and the judgments in the trial and appellate proceedings all recognize that there are differences between the two designs (the design in the present patent and that in evidence 1). However, all the decisions/judgments hold that the differences are slight changes and thereupon have them excluded from the “whole” of the design of the vehicle. The decisions/judgments, de facto, only focus on comparing the general profile of the two designs, holding that general appearance of a vehicle has the most prominent effect on the visual perception of an ordinary consumer and thereupon erroneously concluding that the designs of the present patent and evidence 1 are similar and thus the present patent is invalid.

In view of the above, the judgments of the trial and appellate proceedings (which held that the present patent was invalid because the designs of the present patent and evidence 1 are similar and thereupon affirmed the Invalidation Decision No. 8105 by PRB) erred in applying the law and hence shall be corrected.