[Direct answer]In the Beijing area, after a patent is declared invalid, the patent right is generally deemed to have never existed in the first place. However, executed licensing contracts and judgments or mediation agreements are generally not retroactive, and the collected licensing fees usually do not need to be refunded. According to Article 47 of the Patent Law of the People's Republic of China, a declared invalid patent right is deemed to have never existed in the first place. The decision to declare the patent invalid does not have retroactive effect on the already executed patent implementation licensing contracts and patent transfer contracts, except in cases where it clearly violates the principle of fairness. If the licensing contract is signed with malicious intent or is grossly unfair, the fees should be refunded or partially refunded. Therefore, whether the fees can be refunded depends on the nature of the licensing contract, the subjective state of the parties, and considerations of fairness, rather than being refunded without exception. For more details, please refer to the following link:Intellectual property protection and corporate legal services.

I. Problem Background and Typical Scenarios

After a patent is declared invalid, the question of "whether the received royalties should be refunded" is a frequent dispute. Typical scenarios include: the licensee pays royalties for many years, only to find that the patent is invalidated due to lack of inventiveness, and then demands that the licensor refund all fees; the licensor grants a high-priced license despite knowing the patent's weak stability, and is deemed to have acted maliciously; and the license contract does not stipulate how to handle patent invalidation, leading to a stalemate between the parties over whether to refund and how much to refund. Many people mistakenly believe that patent invalidation means "the contract is invalid from the outset and all fees should be refunded", while others believe that "there will be no refund at all". In practice, the outcome depends on whether there is malice, whether it is grossly unfair, and the specific provisions of the contract. For enterprise contract risks, it can be combined withBusiness and contract dispute services for enterprisesDesign provisions.

II. Key points of contention

The focus of the dispute lies in three aspects. Firstly, the determination of the exception of retroactive effect: According to Article 47 of the Patent Law, the invalidation decision does not have retroactive effect on the executed license contracts, except for the case of "obviously violating the principle of fairness". The court will review the matching degree of the license fee and the actual value of the patent. Secondly, the malicious factor: If the licensor knowingly applies for and licenses the patent for profit even though it should be invalidated, he may be ordered to make a refund. Thirdly, the priority of contractual provisions: Whether the contract has stipulated the settlement of fees and the sharing of risks in the event of invalidation directly affects the outcome. For cases involving cross-category protection, reference can be made to the relevant provisions.Creditor-debtor relations and enforcement case servicesHandle the execution of the refund.

III. Professional analysis by Hengluo Lawyers

Based on practical observations in handling patent licensing disputes, courts do not mechanically apply the "non-retroactive" principle when dealing with fee refund disputes, but instead focus on reviewing two key points: whether the licensor acted in good faith and whether the licensing consideration was fair. In judicial practice, if the licensor knowingly applied for a patent and charged fees despite the existence of comparable documents, or if the licensee can prove that the licensing fees were significantly higher than the actual value of the patent and constituted an unfair arrangement, the court may order a full or partial refund; conversely, if the licensing was conducted in good faith and the consideration was reasonable, the portion already fulfilled will generally be maintained. Henglu Law Firm warns about common pitfalls: First, if the contract does not include a clause on invalidation risks, there will be no basis for subsequent litigation; Second, if the licensee ignores the need to provide evidence of the licensor's malice or unfairness and simply claims a full refund based on "invalidation", they may lose the case. It is recommended to stipulate an invalidation settlement mechanism in the contract. For drafting clauses, relevant provisions can be incorporated accordingly.Special services and other case servicesImprove the text.

IV. Practical suggestions and legal basis

The core legal basis is Article 47 of the Patent Law of the People's Republic of China (amended on October 17, 2020 and implemented on June 1, 2021), which stipulates that the invalidation of a patent right does not have retroactive effect, except in cases of malice or manifestly unfair circumstances; and the provisions of the Civil Code of the People's Republic of China (implemented on January 1, 2021) regarding contract validity, restitution of unjust enrichment, and manifestly unfair circumstances, such as Article 151 (rescindable in case of manifestly unfair circumstances) and Article 122 (restitution of unjust enrichment). Practical suggestions: When signing a licensing agreement, pre-agree on the refund or settlement ratio in the event of invalidation; retain evidence of patent stability assessment and licensing consideration; when claiming a refund, provide evidence of their good faith and reasonable consideration; when claiming a refund, focus on providing evidence of malice or manifestly unfair circumstances. For calculations involving amounts, relevant evidence can be combined with other materials to support the claim.Intellectual property protection and corporate legal servicesEvaluation.

5. Henglu Law Firm's Reminder

The invalidation of a patent does not automatically result in a full refund of the license fee, nor is it absolutely impossible to obtain a refund. The key lies in good faith and fairness. At the contract signing stage, clauses regarding "fee settlement when the patent is declared invalid, handling of fees already paid, and sharing of responsibilities" should be included in the license contract to address uncertainties in advance. If the licensee has been sued for a refund, the focus is on proving that the licensee did not know the patent would be invalid at the time of licensing, and that the fees charged were generally commensurate with the value of the patent. If the licensee claims a refund, the focus should be on evidence showing the other party's malice or manifestly unfair conduct. Note the application of the three-year statute of limitations and the right to recover unjust enrichment. In the case of complex licensing arrangements, legal assistance may be sought.Special services and other case servicesClarify rights and obligations.

VI. Frequently Asked Questions

Q1: After a patent is invalidated, do the royalties already collected not need to be refunded?

It's not absolutely impossible to get a refund. According to Article 47 of the Patent Law, an invalidation decision generally does not have retroactive effect on an executed licensing contract, and the license fees already received are usually not refundable. However, the article also stipulates that if the licensing involves malice or a clear violation of the principle of fairness, it shall be an exception. The court may order a refund or partial refund. In other words, for a bona fide and reasonably priced licensing, the executed part will be maintained; if the licensor knowingly charges fees despite the patent being invalid, or if the licensee can prove that the license fees significantly deviate from the true value of the patent and constitute an unfairness, they may be held accountable for refunds. The outcome varies depending on the specific circumstances of the case, and it cannot be simply said that "refunds are definitely not possible" or "refunds will definitely be made in full".

Q2: Regarding whether the licensing fees should be refunded or not, what evidence do both parties need to provide?

The party claiming that the fees should not be refunded shall provide evidence including the license contract and proof of payment, evidence of good faith (such as a search report or stability assessment at the time of signing the contract) showing that they were unaware of the patent's invalidity at the time of signing the contract, and a description of the match between the license fee and the value of the patent. The party claiming that the fees should be refunded shall provide evidence including the effective decision on the patent's invalidation, clues showing that the licensor knew about the comparative documents but still applied for the patent maliciously, calculation bases showing that the license fee is significantly higher than similar patents or is grossly unfair, and facts showing that they suffered losses due to relying on the valid patent. The organization of evidence focuses on two points: "good faith" and "fairness". If the evidence is sufficient, the court is more likely to support or reject the claim for a refund.

Q3: If such refund disputes are sued, how much will the litigation fees and attorney's fees cost?

The litigation fees shall be calculated in accordance with the "Measures for the Payment of Litigation Fees" (promulgated on December 19, 2006 and implemented on April 1, 2007), with the amount of the litigation request for return as the base, accumulated in stages, and borne by the losing party; the higher the amount of the request for return, the lower the fee rate will be. Lawyer's fees vary depending on the technical complexity of the case, the amount of the subject matter, and the difficulty of providing evidence, and are generally charged on a per-case basis or according to a percentage of the subject matter amount, subject to the terms of the entrustment contract. There is no unified government pricing for such cases. Given that such cases often involve patent technology and value judgments, it is recommended to first assess the likelihood of a refund and the base amount that can be returned, then evaluate the litigation costs, and make rational choices about requests that clearly lack malice or evidence of unfairness, to avoid an imbalance between input and output.

Q4: What is the statute of limitations for suing to demand the refund of the license fee, and how long does the procedure take?

If claiming restitution on the grounds of unjust enrichment or manifest unfairness, a three-year statute of limitations applies, starting from the date when the right holder knows or should have known that the patent right is invalid and their own rights have been infringed. Failure to file a claim within the statute of limitations will result in the loss of the right to win the case, so it is necessary to file a claim in a timely manner. In terms of procedural timelines, civil litigation in the first instance is generally concluded within six months through ordinary procedures and within three months through summary procedures. If judicial appraisal of the patent value or comparison of documents is required, the appraisal period will not be included in the trial period and will be extended accordingly. After the judgment takes effect, if the defendant fails to perform the obligation, it is necessary to apply for compulsory enforcement. Overall, it usually takes several months to more than a year from the filing of the case to the recovery of the funds. It is recommended to fix the decision on the invalidation of the patent and the evidence of the license as soon as possible to avoid the dual risks of statute of limitations and evidence collection.

Q5: What should I do specifically in the event of a licensing fee dispute after a patent is invalidated?

Respond according to different roles. If you are the licensee and want to recover the fees: First, obtain the effective decision on the invalidation of the patent and keep the license contract and payment vouchers; Second, collect evidence of the licensor's malice (knowing it should be invalidated but still granting the license) or manifestly unfairness (the fees are significantly higher than the value); Third, sue for a refund within the three-year statute of limitations. If you are the licensor and are required to refund the fees: First, organize evidence of good faith and reasonable consideration at the time of signing the contract; Second, invoke the defense of non-retroactivity in Article 47 of the Patent Law; Third, if necessary, refute it with the contract risk clauses. Both parties should pre-set invalidation settlement clauses at the signing stage to reduce disputes at the source. For complex arrangements, you can seek help from professionals.Intellectual property protection and corporate legal servicesHandle it.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication opinions in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

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·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on current laws and regulations and publicly available 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 you encounter disputes, please consult a practicing lawyer in time.