Guanyang Yao

What recent decisions or legislative developments are having the biggest impact on patent strategy in China right now?

The incorporation of punitive damages is having a big impact on patent strategy. Some scenarios have been set as the basis upon which to award punitive damages, such as sending effective warning letters, repeated infringement after an administrative decision or judgment, forgery, destruction or concealment of infringing evidence and refusal to follow a ruling or preliminary injunction.

Therefore, patent enforcement strategies can now include more pre-litigation actions, including sending warning letters. If the other side does not respond appropriately, it would be possible to claim punitive damages. If the other side does respond, there would be a settlement before litigation is initiated, which would definitely improve the efficiency – and reduce the cost – of patent enforcement. Large-scale patent enforcement actions established over multiple rounds may also be a good choice of strategy; if there are prior administrative decisions or judgments that are favourable to the patentee, the subsequent enforcement actions could claim punitive damages, which may be much higher than in the first round.

Some recent administrative invalidity decisions on parameter features are also affecting patentees. Generally, it would be difficult to invalidate such parameter claims as they set out detailed numbers. However, this year, some such claims were invalidated due to lack of specification support and non-sufficient disclosure issues. In view of this, patentees’ strategies may shift so as to not to rely too much on these claims, and patent review on such parameter claims should be much stricter.

Other than China, which jurisdictions in Asia would you recommend for multinationals looking to commence litigation, and why?

I would recommend commencing IP litigation in the Philippines because the total trial cycle can be within six months and summary judgment can be requested. From a strategic perspective, the speed of litigation is crucial, especially if there are multinational parallel litigations pending. One fast-winning judgment may strike the balance to be favourable for patentees.

What aspects of your work do you enjoy most, and why?

Communicating with clients is one of the most critical and enjoyable aspects of work for me. I can obtain updated information in various fields and share my valued IP protection experience with clients to improve the protection of their companies in the market. Sometimes interesting ideas come out when we discuss various topics together, which is a kind of luck in life.

Attending court hearings is another part of my work that I enjoy. During court hearings, I can show my understanding and handling capabilities for legal issues and technical solutions, and explain these to the judges in plain language. I am very happy when judges are finally convinced by our opinions and solid chains of evidence.

You are renowned for your ability to devise litigation strategies covering a wide range of industries. What, for you, are the crucial elements of such an approach before the courts?

From a strategic standpoint, various elements are crucial, including forum shopping, damages to be claimed, defendants to be sued, models of infringing products to be involved, how to efficiently collect evidence determine good timing to file the lawsuit, administrative or legal enforcement routes, and assess theimpact on the defendants, and so on. These factors should be decided case by case. Sometimes, technical fields also have their own characteristics, which can make the lawsuit easier or more challenging. For example, if the infringing product is a mobile phone, evidence collection is straightforward and the product can be purchased directly from a store. However, if the infringing product is some special device in a manufacturing line, it would be difficult for attorneys to collect evidence themselves and third-party investigators would likely get involved, which would increase the risks and cost of enforcement.

What changes would you make to the current SEP/FRAND landscape in China, and do you think they are likely to happen?

SEP cases in the automotive sector have become a hotspot from the industry and judicial system. Some NPEs from the audio field have also come to China to assert their patent rights. While in 2022 no high-profile judgments were issued, several SEP cases are still in the process, such as Datang v Samsung, OPPO v Interdigital, CCC v Oppo, VoiceAge EVS v Nokia, Oppo v Nokia and Vivo v Nokia. Court hearings for some cases have been held and it judgments or settlements are expected in the future. Many patent pools, such as Avanci and AA, have attracted Chinese companies as members, which shows that the strength of Chinese businesses’ SEP portfolios have been accepted by patent pools and also highlights a change in attitude from Chinese companies when it comes to patent pools. A recent Supreme People’s Court decision from September 2023 with regard to the royalty rate dispute between Oppo and Nokia has again confirmed that Chinese courts have the authority to decide global royalty rates.

How do you stay on top of all the latest developments in the patent world?

I keep a close eye on the latest developments in the patent world. Court public information, patent office reports, patent attorney articles, IP media accounts, IP field conferences – all of these are my sources. I also collect high-profile case judgments and decisions to summarise the trend of the latest developments.

What are the biggest challenges facing your clients right now, and how are you helping them to overcome these?

The biggest challenge is the impact of the pandemic and economy on normal business. Downsizing occurs frequently these days. I try to help clients be cost-effective on litigation cases and I provide legal proposals on how to maintain a good standing in the current difficult situation. It is vital for us to cooperate with our clients to survive through these challenges together.

How can patent holders mitigate risk in China?

For patent holders, one of the main risks is patent invalidation. It generally takes six to nine months to go through the invalidation procedure, from filing to decision. So when a patent is asserted, it should be selected to be robust in validity. Although the tendency of patent invalidation is keeping the patent valid, there is no limit on the number of challenges against it. To mitigate such risk in China, it is necessary for patent holders to select experienced patent attorneys to handle patent invalidation challenges and great importance should be placed on defending a patent’s validity.

You are a member of several associations including the All-China Lawyers Association, the All-China Patent Agents Association and AIPPI. How has your time with these groups contributed to your professional development?

These groups provide me with opportunities to share my opinions and experiences in public conferences so that more and more foreign patent attorneys can get to know me. This is positive for my professional development. When I attend IP conferences, I also learn a lot from IP attorneys all over the world, which always inspires new ideas in my brain.

What would be your three top pieces of advice for students and young lawyers considering a career in intellectual property?

First, building a strong basis of IP knowledge and staying updated in various technical fields is immensely helpful for a future career in the IP field. Second, becoming familiar with legal practice and judgment updates is a good habit to nurture since excellent attorneys should be able to adapt to the times and provide the freshest ideas and proposals to clients. Third, staying healthy in daily life is critical, as IP attorneys can become extremely busy when the tide is high.