{"id":1162,"date":"2024-12-13T07:33:03","date_gmt":"2024-12-13T07:33:03","guid":{"rendered":"https:\/\/ipfray.com\/?p=1162"},"modified":"2024-12-13T07:33:03","modified_gmt":"2024-12-13T07:33:03","slug":"chinas-supreme-peoples-court-settles-mrna-patent-trade-secrets-litigation-under-president-xis-new-fengqiao-dispute-model","status":"publish","type":"post","link":"https:\/\/ipfray.com\/staging1\/chinas-supreme-peoples-court-settles-mrna-patent-trade-secrets-litigation-under-president-xis-new-fengqiao-dispute-model\/","title":{"rendered":"China\u2019s Supreme People\u2019s Court settles mRNA patent, trade secrets litigation under President Xi\u2019s new \u2018Fengqiao\u2019 dispute model"},"content":{"rendered":"\n
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Context: <\/strong>In November 2023, under orders from President Xi Jinping, China\u2019s Supreme People\u2019s Court directed courts across the country to start following the \u201cFengqiao model\u201d. Under this, by 2035, courts will be expected to get parties to settle disputes through mediation in the most \u201camicable\u201d and \u201cresource-efficient\u201d way possible. The IP division of the Supreme People\u2019s Court later confirmed this order in August.<\/p>\n\n\n\n

What\u2019s new:<\/strong> Earlier this month, the Supreme People\u2019s Court announced the settlement of a dispute over the infringement of a patent related to an mRNA-based osteoarthritis drug. The case was first initiated by Zhen Medical, which also sued generics company Rui Biotech for the misappropriation of trade secrets and for a breach of contract. In line with the Fenqiao model, the court decided to \u201cpackage\u201d the three disputes into one case and facilitate a settlement that resolved all the issues at once. The settlement also involved a licensing agreement granting Rui Biotech access to Zhen Medical\u2019s mRNA technology patent.<\/p>\n\n\n\n

Direct impact and wider ramifications:<\/strong> The case is just one of an increasing number of mRNA-related cases that came after the COVID-19 pandemic. But it is also not the first time we have seen mediation being encouraged in patent cases in China. In July 2021, the China National Intellectual Property Administration (CNIPA) was empowered to hear patent infringement disputes that have a \u201csignificant impact\u201d nationwide in a special administrative procedure. In July 2023, it presided over a case in which Huawei had accused Xiaomi of infringing four patents (two of which were 4G LTE SEPs) and the plaintiff had asked the CNIPA to intervene. The two companies ultimately struck a communications tech cross-licensing deal last September \u2013 but this method of concluding disputes has faced some criticism, according to GEN Law partner Dong Ning. While he too has been involved in another recent patent case that was resolved under Fengqiao, he notes that judges may occasionally exert undue pressure with this approach.<\/p>\n<\/div>\n\n\n\n

Zhen Medical was first founded by Dr. Hu and two other entrepreneurs in 2018. A year later, Dr. Hu left to start his own company, Rui Biotech. Zhen Medical then sued its rival for patent infringement in the Shenzhen Intermediate People\u2019s Court in April 2022. In its cases, it claimed that the infringed patent and the misappropriated secrets were invented while Mr. Hu was still head of Zhen Medical. After the Shenzhen Intermediate People\u2019s Court sided with Rui Biotech, Zhen Medical then appealed against the ruling in the Supreme People\u2019s Court.<\/p>\n\n\n\n

While this case seems like a standard dispute among three co-founders who diverged over approaches to commercialising their discoveries, the case involves an mRNA-based drug \u2013 cutting-edge technology that China has held in high importance in recent years. And China is not alone. Since the COVID-19 pandemic, the number of lawsuits related to mRNA technology has been growing rapidly. In October, Pfizer and Moderna celebrated wins in disputes against CureVac and Alnylam Pharmaceuticals, respectively, while a landmark judgment handed down by the High Court of England and Wales in July saw Pfizer become the first company to have its COVID-19 vaccine infringe a valid patent. GlaxoSmithKline also joined the mRNA patent wars in April, suing Pfizer and BioNTech for infringing five of its COVID-19 vaccine patents (April 26, 2024 ip fray<\/strong> article<\/a>).<\/p>\n\n\n\n

China\u2019s Fengqiao model<\/strong><\/h4>\n\n\n\n

The case is also significant because it falls under an order made by President Xi Jinping late last year to get Chinese courts to become more efficient and more amicable in their processes \u2013 also known as following the Fengqiao model (21 November, 2023 Supreme People\u2019s Court press release<\/a>). Instead of conducting separate trials for each lawsuit, the court investigated and helped the parties reach a settlement for all three cases in one \u2013 and held that the technology ultimately belonged to both companies (so they struck a cross-licence agreement). <\/p>\n\n\n\n

\u201cThis case serves as a benchmark for how courts can efficiently and amicably resolve complex scientific and technological disputes while fostering trust and collaboration,\u201d says Yannan Li at Sitao IP<\/a>.<\/p>\n\n\n\n

According to GEN Law<\/a> partner Dong Ning, promoting settlements between parties is a method that China has always encouraged \u2013 in ancient China, governments sought to regulate individual behavior through morals, customs, and rituals, and did not encourage litigation, considering it \u201cunseemly\u201d.<\/p>\n\n\n\n

Today, many courts have dedicated mediation centers and as noted earlier, in IP disputes, the CNIPA has recently gained the powers to mediate high-level patent infringement litigation. The patent office helped resolve a dispute between Huawei and Xiaomi over several communication tech patents, as well as between Boehringer Ingelheim and Guangdong HEC over the former\u2019s linagliptin tablet patent.<\/p>\n\n\n\n

Mr. Ning says:<\/p>\n\n\n\n

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\u201cAs a lawyer, I certainly understand the importance of litigation, but I also acknowledge that sometimes litigation is not an effective way to resolve disputes in China\u2019s context. Chinese people place great importance on the relationship between parties when cooperating. Therefore, once a lawsuit is initiated, it signifies a complete breakdown of the relationship. Even if the court can determine who is right and who is wrong, it is unlikely the parties can restore their relationship.\u201d<\/p>\n<\/blockquote>\n\n\n\n

This Fengqiao model is being adopted more and more in Chinese courts. The Zhejiang Provincial Intellectual Property Office recently issued what it calls the “Fengqiao-style” intellectual property dispute governance mechanism last month (November 27, 2024 Zhejiang Metropolitan Express article<\/a>). Additionally, Mr. Ning himself represented a UK-based tech company in a case in which three patent infringement lawsuits against a Chinese manufacturer ultimately led to a settlement. \u201cThanks in part to the court’s efforts \u2013 judges can adjust the expectations of both parties,\u201d he says.<\/p>\n\n\n\n

However, Mr. Ning adds, mediation has faced some criticism. In some courts, there is a compulsory mediation process before a case is officially docketed. \u201cSome plaintiffs feel delays the trial proceedings,\u201d he says. Additionally, judges may sometimes exert undue pressure during mediation, Mr. Ning notes:<\/p>\n\n\n\n

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\u201cIn one case I was involved in, the judge suggested that the plaintiff carefully consider whether their IP strategy was too aggressive, and warning that such a strategy could risk antitrust investigations.\u201d<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Chinese courts are imposing mediation on more and more cases under the new order, including those involving patent infringement.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[136,122,79],"tags":[],"class_list":["post-1162","post","type-post","status-publish","format-standard","hentry","category-alternative-dispute-resolution","category-china","category-pharmaceutical-industry"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/1162","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/comments?post=1162"}],"version-history":[{"count":6,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/1162\/revisions"}],"predecessor-version":[{"id":1170,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/1162\/revisions\/1170"}],"wp:attachment":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/media?parent=1162"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/categories?post=1162"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/tags?post=1162"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}