Similar to the laws in the United States and Europe, Chinese law allows those accused of patent infringement to commence actions for declaring non-infringement of patents to clear away the uncertainties. A key precondition for commencing a patent non-infringement declaratory judgment action ("DJ Action") is the patentee having claimed patent infringement. Chinese law leaves the means of such a claim undefined, and so Chinese courts have the discretion to rule whether an action constitutes a claim of patent infringement. Prior Chinese statute and case law did not clearly address the issue of whether a patentee's lodging of patent infringement claims with administrative agencies against a customer of the allegedly infringing device constitutes a claim of infringement against the manufacturer, enabling the manufacturer to commence a DJ Action.

In VMI v. Safe-Run, the Chinese Supreme Court Intellectual Property Tribunal made new law that an administrative complaint against the customer/end user constitutes a claim of patent infringement against the manufacturer, enabling the manufacturer to commence a DJ Action. This case has been selected to be a precedential case by the Chinese Supreme Court.

The new law plugs the loophole by handing the power of defense to the manufacturers, who are best placed to challenge the validity of the patents and defend the infringement actions.

Associates Luke Song, Albert Wang, and Jiahui Sheng assisted in the preparation of this White Paper.