[Direct answer]In the Beijing area, the right of prior use is a statutory defense in patent infringement litigation. If a person has already manufactured the same product or used the same method before the patent application date, or has made the necessary preparations for manufacturing or use, and continues to manufacture or use the product within the original scope, it shall not be deemed as infringing the patent right, according to Article 75 of the Patent Law of the People's Republic of China (amended for the fourth time on October 17, 2020 and implemented on June 1, 2021). When determining whether this right exists, three key points should be reviewed: first, the time node, which is based on the patent application date, or the priority date if there is a priority right; second, the necessary preparations, including completing the main technical drawings, process documents, and other technical preparations, as well as purchasing specialized equipment and raw materials; third, the original scope, which refers to the production scale existing before the application date and the scale that can be achieved by using existing production equipment or preparations. The burden of proof for claiming the right of prior use lies with the defendant in the infringement case. If the evidence is insufficient, the defense cannot be established. For more details, please refer to the relevant provisions of the Patent Law of the People's Republic of China.Intellectual property protection and corporate legal services.

I. Problem Background and Typical Scenarios

The time lag between R&D and patent application is the root cause of prior use rights disputes. Typical scenarios include: after the enterprise completes product trial production and mass production, it finds that the same technology has already been patented by others; it starts production to meet customer orders without assessing the risk of prior patents; it continues to produce the alleged infringing products by acquiring production lines or entrusting processing; it has implemented the technology as a trade secret for many years, only to find that it is covered by others' patents. Many enterprises mistakenly believe that prior use rights can automatically exempt them from liability, or confuse them with the defense of existing technologies. They only take action when they receive a lawsuit. It should be noted that prior use rights only cover the manufacturing and use completed before the application date. Any production beyond the original scope still constitutes infringement. For more information, please refer to the relevant rules.Intellectual property protection and corporate legal services.

II. Key points of contention

In judicial practice, the disputes over the determination of preemptive rights are concentrated in five aspects. Firstly, the completion time of necessary preparations: the evidence must show that the relevant preparations have been completed before the application date. Mere investment intentions, plans, or partial investments are usually insufficient. Secondly, the judgment criteria for necessary preparations: generally requiring both technical and material preparations, that is, having completed the main technical drawings or process documents required for implementation, and having purchased specialized equipment, main raw materials, or completed sample trials. Thirdly, the accounting of the original scope: limited to the production scale existing before the application date and the production scale that can be achieved using existing production equipment or production preparations. Unauthorized expansion of production capacity, changes to product structures or performance functions will not be protected. Fourthly, the legality of the technology source: claims to preemptive rights based on illegally obtained technologies will not be supported. Fifthly, the exercise method: in judicial practice, preemptive rights are generally considered to be transferred together with the original enterprise, and cannot be transferred separately or licensed to others for use. In the judicial practice of the Beijing area, the court reviews the above-mentioned elements based on objective evidence, and unilateral statements are difficult to support the defense.

III. Professional analysis by Henglue Lawyers

Whether the preemptive right defense can be established ultimately depends on the evidence confrontation in the courtroom, and the boundaries between procedural rules and substantive defenses are also key to intellectual property litigation. A copyright infringement dispute case handled by Attorney Dang Pei exemplifies this boundary. The client, who is the copyright owner of a certain art work, alleged that Company A used a graphic logo similar to his without authorization on its products and promotional materials. The client therefore sued the manufacturer, Company A, and its distributor, Company B, in the People's Court of Shijingshan District, Beijing, where the distributor's headquarters are located. The first-instance court ruled that Company B was merely a distributor, and the seller, as the only jurisdictional connection to the infringement, lacked a substantial connection to the infringement, so it dismissed the case. Attorney Dang Pei appealed to the Beijing Intellectual Property Court, arguing that the act of selling infringing products itself constitutes an integral part of copyright infringement, and the selling location is the place where the infringement occurred. Moreover, filing a case for review only requires that the defendant have a formal connection to the facts involved and reach a disputable level. Whether an infringement has occurred should be determined in the substantive trial. The Beijing Intellectual Property Court adopted this view, overturned the first-instance dismissal ruling, and ordered the first-instance court to accept the case. This case highlights that the preemptive right is a substantive defense and must be established through evidence of R&D, trial production, and production completed before the application date in the substantive trial. Fixing the evidence chain in advance is a prerequisite for the defense to succeed. This case was handled by Beijing Henglu Law Firm.The Party Building Work ConferenceAttorney (Practice Certificate No.: 11101201911130220, subject to the certificate issued by the judicial administrative organ) acting as the agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 75 of the Patent Law of the People's Republic of China (amended for the fourth time on October 17, 2020 and implemented on June 1, 2021), which stipulates the circumstances that are not considered infringement of patent rights; and Article 15 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Cases of Infringement of Patent Rights (promulgated on December 28, 2009 and implemented on January 1, 2010), which provides detailed provisions on prior rights and the original scope. Action list: First, sort out the R&D projects, drawings, process documents, trial production records, and sample photos before the application date or priority date by reverse chronological order; Second, prepare evidence of fixed materials, including purchase contracts and invoices for specialized equipment, purchase vouchers for raw materials, and production ledgers; Third, calculate the actual production scale before the application date based on sales invoices and outgoing inventory slips, and use this as the benchmark for the original scope; Fourth, verify the source of the technology to exclude circumstances such as illegal acquisition and breach of confidentiality agreements; Fifth, during the defense period, clearly raise the defense of prior rights, promptly apply for investigation and evidence collection, and consider expert appraisal for disputed facts. For more details, please refer to the full text.Intellectual property protection and corporate legal services.

5. Henglu Law Firm's Reminder

The right of prior use is an important defense for the defendant in an infringement lawsuit, but the burden of proof is high and the risk of exceeding the scope is great. The daily management of R&D files directly determines the success or failure of the defense. Drawing versions, equipment and raw material certificates, and trial production and sales records should be kept up to date. After receiving the complaint or lawyer's letter, the defendant should raise a defense and provide evidence within the response period to avoid losing the right to defend; it is strictly prohibited to fabricate production quantities before the application date to expand the defense, as false statements may face judicial penalties. The right of prior use does not preclude the simultaneous assertion of the defense of existing technology and the defense of lawful source. Multiple defenses should be organized together. When handling similar cases in the Beijing area, it is recommended to entrust a lawyer as soon as possible.Beijing Henglu Law FirmProfessional lawyers coordinate the organization of evidence with the preparation of trial strategies simultaneously.

VI. Frequently Asked Questions

Q1: If a party claims the right of prior use as a defense, can they be exempted from liability for infringement?

It's possible. If the defendant can prove that he/she had already manufactured the same product or used the same method before the application date, or had made the necessary preparations for manufacturing or use, and continued to manufacture or use the product only within the original scope, he/she shall not be deemed to infringe the patent rights according to law and shall not bear such responsibilities as stopping the infringement and compensating for losses; if the preparations are insufficient, exceed the original scope, or the technical source is illegal, the defense cannot be established, and the defendant shall still bear responsibilities according to law. Whether the defense can be established depends on the evidence and the court's determination, and no lawyer can unilaterally guarantee the outcome.

Q2: What evidence should be prepared before exercising the right of first refusal?

Organize evidence around two core facts: time and scope. First, time-related evidence, such as R&D project documents, drawings, process documents, sample trial production records, inspection reports, and correspondence emails before the application date; Second, scope-related evidence, such as equipment purchase contracts and invoices, raw material purchase receipts, production ledgers, outgoing invoices, and sales invoices, used to prove the actual production scale before the application date; Third, source-related evidence, such as independent R&D records, commissioned development contracts, and confidentiality agreements, used to exclude the possibility of illegally obtaining technology. All types of evidence should be able to corroborate each other and form a complete time chain.

Q3: How much does a patent infringement lawsuit cost?

The litigation fees shall be paid in stages according to the amount of the litigation request, with the losing party bearing the fees, and the partially successful party sharing the fees proportionally; for disputes involving technical facts, appraisal fees, notarization fees, and preservation fees may be incurred, which shall be prepaid or claimed according to the actual circumstances. Lawyer's fees shall be determined through consultation between the law firm and the client. Commonly, fees are charged based on the proportion of the subject matter or on a per-case basis, without a unified government pricing. It is recommended to calculate the expected compensation, litigation costs, and defense space before filing a lawsuit, and to rationally choose settlement, mediation, or litigation response.

Q4: How long does it usually take to resolve a patent infringement case?

The first-instance ordinary procedure shall be concluded within six months, and the simplified procedure within three months. Complex cases may be extended according to law. For cases involving technical appraisal and inspection, the relevant periods shall not be included in the time limit for trial, and the trial period will usually be extended by several months. For those who appeal against the first-instance judgment, the second-instance procedure generally takes three months. If the case proceeds smoothly, the result will be available within six months to a year. If the involved patent enters the invalidation declaration procedure, the infringement lawsuit may be suspended pending the review conclusion, and the cycle will be correspondingly prolonged.

Q5: If you want to assert the right of prior use after being sued for infringement, what's the first step to take?

Four steps to proceed: First, immediately confirm the defense period after receiving the lawsuit materials, and submit the prior use defense in writing within the defense period; Second, seal and organize the R&D, production, and sales records before the application date to form a time evidence chain; Third, calculate the production scale before the application date, assess whether the current production exceeds the original scope, and actively adjust the production capacity to avoid risks if necessary; Fourth, entrust professional lawyers to formulate a litigation response plan, and simultaneously evaluate other defense strategies such as prior art defense and lawful source defense; In case of time urgency, you may apply for an extension of the defense period in accordance with the law.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm for specific cases.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Intellectual property protection legal services·Attorney Party Pei·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in a timely manner.