Can the defendant file a counterclaim on the grounds of bad faith in an intellectual property infringement lawsuit?
Author | Intellectual Property Center, Lawyer Wan Cheng
Intellectual property rights holders or interested parties have the right to exercise and dispose of their civil rights and litigation rights within the scope stipulated by law, but if they violate the principle of good faith and maliciously exercise their rights, harming the rights and interests of others, it may constitute a malicious lawsuit.
In 2004, the Supreme People's Court issued the "Research Report of the Third Civil Division of the Supreme People's Court on the Problem of Malicious Litigation", which pointed out that malicious litigation generally refers to the act of deliberately bringing a civil lawsuit for the purpose of harming others or obtaining illegal benefits without factual basis and justifiable reasons, resulting in losses to the relative in the lawsuit.
In 2011, the revised "Provisions on the Causes of Civil Cases" also added the cause of action for "maliciously filing a dispute over the liability for damages in an intellectual property lawsuit" under the second-level cause of action "intellectual property ownership and infringement disputes" as an independent cause of action.
When the defendant believes that the plaintiff maliciously filed an intellectual property infringement lawsuit, causing damage to it, can he directly file a counterclaim on the grounds of malicious litigation in the infringement lawsuit without filing a separate lawsuit? This article mainly starts from the case and briefly analyzes this issue.
First, the main reasons why the court does not accept counterclaims in intellectual property infringement lawsuits.
Article 233 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China stipulates that if the counterclaim and the claims in this lawsuit are based on the same legal relationship, there is a causal relationship between the claims, or the counterclaim and the claims in this lawsuit are based on the same facts, the people's court shall hear them together.
Therefore, the court held that the counterclaim must meet the conditions stipulated in the above judicial interpretation. Combined with the cases searched by the author, the court that did not accept the counterclaim considered that the counterclaim did not meet the above judicial interpretation and rejected it. For example:
In the (2015) Zhejiang Zhizhizhizhizi No. 185 case, the court held that this case was brought by Qiao Weijun based on the alleged infringement of the appearance patent rights of Huaqin Pen Factory and Pengduo Company. The facts of the case involved in this claim are whether Huaqin Pen Factory and Pengduo Company have infringed the rights involved in the case, and the legal relationship of their litigation involves disputes over infringement of the appearance patent rights.
The counterclaim in this case was brought by Huaqin Pen Factory and Pengduo Company, which believed that Qiao Yujun had maliciously filed a lawsuit and caused its losses. The counterclaim request involved the fact of the case that Qiao Yujun's lawsuit was a malicious lawsuit and caused losses to Huaqin Pen Factory and Pengduo Company. The legal relationship of the lawsuit involved a dispute over the liability for damages due to maliciously filed intellectual property litigation.
Therefore, this case and the counterclaim are not claims based on the same fact or legal relationship, and the two are not implicated. The counterclaims filed by Huaqin Pen Factory and Pengduo Company do not belong to the category of counterclaims in the cases accepted by the original court, and the original court does not accept them.
In the (2018) Zhejiang Minzhuan No. 146 case, the court held that in this case, this lawsuit was a dispute over the infringement of utility model patent rights by Ningbo Jitong Information Technology Co., Ltd. (hereinafter referred to as Jitong Company) as the plaintiff and Gree Company as one of the defendants. Jitong Company's lawsuit against Gree Company was to order Gree Company to stop patent infringement and compensate for the economic losses caused to Jitong Company by the infringement.
The counterclaim is a dispute over the liability for damages in an intellectual property lawsuit brought in bad faith by Gree Company as the counterclaimant and Jitong Company as the respondent. Gree Company's lawsuit request is to order Jitong Company to pay damages for the intellectual property lawsuit brought in bad faith, and to apologize and eliminate the impact. The counterclaim claim is based on the fact that Jitong Company maliciously applied for a patent right for the involved patented technology that has been disclosed for Gree Company's products, and brought a patent infringement lawsuit against Gree Company with the involved patent right obtained in bad faith.
Obviously, the patent technology involved in Gree's counterclaim is disclosed in advance, and Gree can use it as a defense in this lawsuit. In fact, Gree has also filed a request for invalidation with the Patent Reexamination Board of the State Intellectual Property Office on this grounds, and Gree cannot establish it as a counterclaim.
As for whether Jitong Company has brought an intellectual property lawsuit in bad faith, it should be reviewed according to the constituent elements of a general infringement case, that is, whether there are elements such as injurious acts, damage results, causality, and subjective fault. Therefore, the factual basis on which the counterclaim involves the claim for liability for damages in a malicious intellectual property lawsuit and the patent infringement lawsuit involved in this lawsuit are not the same, the legal relationship involved is not the same or related as stipulated by law, and there is no causal relationship between the claims. Therefore, the counterclaim filed by Gree Company does not meet the relevant laws on the acceptance of counterclaims.
In the (2018) Zhejiang Minzhuan No. 270 case, the court held that, according to the provisions of Article 233 (1) of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, if the claims of the counterclaim and the principal claim are based on the same legal relationship, there is a causal relationship between the claims, or the claims of the counterclaim and the principal claim are based on the same facts, the people's court shall hear them together.
This clause stipulates the involvement requirements that should be satisfied between this lawsuit and counterclaims. Oaks' claim for this lawsuit is based on the patent rights it enjoys in the case, whether the alleged infringing products fall within the protection scope of the patent in question and whether Midea and Yongning have infringed facts such as production, sales, and promised sales; while Midea's claim for counterclaim is based on the validity of the patent rights involved in the case and whether there is subjective malice in the intellectual property litigation.
Although both this lawsuit and the counterclaim involve the patent rights involved in the case, there is a certain implication, but the dispute between claiming rights based on a valid patent right and the validity of the patent right itself and whether the right holder files a lawsuit in bad faith is obviously not a dispute over the same fact; and whether the novelty and creativity of the patent in question proposed by Midea Company should be granted a patent right, and whether the patent right is invalid, it should first be submitted to the relevant administrative organ in accordance with the law.
The counterclaim in this case is different from the claim in this lawsuit, and the legal relationship based on it is different, and there is no causal relationship between the claims. The reasons for Midea's counterclaim are insufficient. The court of first instance did not accept it, and it was not improper.
II. The reasonableness and feasibility of the court accepting and combining counterclaims.
1. From the perspective of relevant judicial interpretations, there is a legal basis for accepting counterclaims for combined trial.
The second paragraph of Article 6 of the "Guiding Opinions of the Supreme People's Court on the Trial of Civil Cases Involving Intellectual Property Rights of E-commerce Platforms" stipulates that if an e-commerce platform operator or an operator within the platform files a lawsuit with the people's court on the grounds that an erroneous notice or a malicious erroneous notice has caused damage, it may be tried together with the case involving intellectual property rights disputes of e-commerce platforms.
"Reply of the Supreme People's Court on the issue of the defendant's request for compensation for reasonable expenses on the grounds of the plaintiff's abuse of rights in an intellectual property infringement lawsuit", in an intellectual property infringement lawsuit, the defendant submits evidence to prove that the plaintiff's lawsuit constitutes an abuse of rights as stipulated by law that damages its legitimate rights and interests, and requests the plaintiff to compensate the plaintiff for the reasonable attorney's fees, transportation expenses, room and board expenses paid for the lawsuit according to law, the people's court shall support it according to law.
The defendant may also sue the plaintiff separately for compensation for the above-mentioned reasonable expenses.
2. In practice, there are cases where counterclaims are accepted, which is feasible.
In the (2021) Beijing 0101 Minchu No. 9648 case, the court held that on June 3, 2021, the Supreme People's Court issued the "Reply of the Supreme People's Court on the Respondent's Request for Compensation for Reasonable Expenses in Intellectual Property Infringement Litigation on the Grounds of Abuse of Rights by the Plaintiff", and it is clear that it will come into force on June 3, 2021.
The content of the approval is stated as follows: In an intellectual property infringement lawsuit, if the defendant submits evidence to prove that the plaintiff's lawsuit constitutes an abuse of rights and damages its legitimate rights and interests as stipulated by law, and requests the plaintiff to compensate the plaintiff for the reasonable attorney's fees, transportation expenses, room and board expenses paid for the lawsuit, the people's court shall support it according to law.
The defendant may also file a separate lawsuit to request the plaintiff to compensate for the above-mentioned reasonable expenses. Since maliciously filing an intellectual property litigation liability dispute is essentially an infringement dispute and belongs to the category of intellectual property litigation, this case belongs to the cases covered by the above approval. In this case, the defendant, Zhongqingwen Company, filed a counterclaim against the plaintiff Ma Xiaojia's lawsuit and asked the plaintiff to compensate for the litigation expenses, which meets the circumstances stipulated in the above approval, so it should be accepted according to law.
In the (2022) Min 0526 Minchu No. 2706 case, the court held that, first, from the time of filing the counterclaim, according to Article 232 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China: "After the case is accepted, before the conclusion of the court debate, the plaintiff adds claims, the defendant files a counterclaim, and a third party files claims related to this case, which can be tried together, the people's court shall hear them together.
"Update Company filed a counterclaim after the case was accepted and before the end of the court debate, and the time for filing the counterclaim complied with the law and should be accepted. Second, from the analysis of the content of the counterclaim request, Update Company required Shanghe Company to compensate it for the economic losses suffered by the litigation in this case and the expenses incurred for responding to the lawsuit. There is a causal relationship between the counterclaim and the litigation claim of this lawsuit, which is based on the mutual legal relationship.
From the perspective of saving litigation resources and reducing the litigation burden of the parties, the counterclaims of Renewal Company should also be heard together. Therefore, this court does not accept the defense opinion that Shanghe Company believes that the legal facts or legal relationship between the counterclaims filed by Renewal Company and this lawsuit are not identical and do not meet the conditions for counterclaims.
In the case of (2023) Su 02 Civil War No. 381The Wuxi Intermediate People's Court found that the right holder, that is, the plaintiff, constituted a malicious lawsuit, and ruled that the plaintiff (counterclaim defendant) compensated the defendant (counterclaim plaintiff) for reasonable expenses of 400,000 yuan. The plaintiff in this case has appealed. The court of first instance of this case accepted the counterclaim in the intellectual property infringement lawsuit and conducted a combined trial.
3. The court accepts counterclaims and joins them to save judicial resources.
In practice, if the plaintiff knows that he does not actually enjoy the relevant intellectual property rights, but still files a lawsuit for the purpose of infringing on the legitimate interests of others, the court can easily determine whether it is a malicious lawsuit. Therefore, such a situation should be accepted as a counterclaim, rather than requiring the defendant to file a separate lawsuit after the lawsuit takes effect.
If the court does not accept the counterclaim, the defendant will sue separately after the action takes effect, but it cannot guarantee the timeliness of the defendant's rights and remedies, and it also wastes judicial resources.
In summary, in an intellectual property infringement lawsuit, the defendant directly files a counterclaim on the grounds of malicious litigation, and the court may not accept it. However, the author prefers that the defendant directly files a counterclaim when he believes that the plaintiff may have improperly obtained rights or has no basis for rights. In particular, if the defendant encounters a malicious lawsuit during the company's listing stage, filing a counterclaim can provide a timely and effective countermeasure to the plaintiff's malicious litigation, and it is also conducive to building a good competition order.
The court should also accurately identify malicious intellectual property lawsuits, clarify the acceptance criteria for counterclaims, and maintain a balance between rights protection and prohibition of abuse.
[1] On May 29, 2023, Lingge Technology: Announcement on the Progress of Major Litigationhttp://www.cninfo.com.cn/new/disclosure/stock?stockCode=833284&orgId=gfbj0833284)
About the Author
Lawyer Wan Cheng
Senior Equity Partner of
Director of Copyright Law Professional Committee of Intellectual Property Center
Member of Copyright Law Professional Committee of Shenzhen Lawyers Association
area of expertise
Intellectual property litigation
Civil and commercial litigation business
Corporate legal advice
Center Profile
Intellectual Property Center
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