On January 5, 2021, Jieqiong ZHU, lawyer of J's, and Chunhui LI, patent attorney of J's IP Agency representing Edan Instruments Co., Ltd. (hereinafter referred to as Edan), won all the four cases of disputes over patent application right ownership.

The Intellectual Property Court of the Supreme People's Court of the second instance rules that the appeal of Wondfo is rejected and the judgment of the first instance is upheld, i.e., the application right for the four patent for inventions involved shall belong to Edan, and that Wondfo shall go through the relevant change procedures within twenty days from the effective date of the judgment.

The patent application in the case relates to the core technology of Edan i15 Blood Gas and Chemistry Analyzer, a rapid near-patient test equipment. Wondfo has applied for the patents closely related to the core technology by recruiting Edan's ex-employees.

The dispute focus of the case is whether the invention-creation involved is a service invention of Edan's ex-employees, and whether the application right should belong to Edan?

Wondfo and its agents argued as follows: although the inventors in the case are Edan's ex-employees, Wondfo has invested hugely in material and technological conditions, and therefore, the related invention should be at least shared by both Edan and Wondfo. If it is just held that any invention-creation accomplished by an employee in the same or similar field within one year after demission shall be owned by the former organization, this would severely undermine the real inventor's initiative on science and technology research and development (R&D) and is also obviously unfair to the new organization investing hugely in material and technological conditions. Therefore, the possibility of independent R&D by the new organization and the R&D contribution of the new organization cannot be negated directly.

Edan and its agents argued as follows: according to the meaning and legislative spirit of Article 6 of the Chinese Patent Law (CPL) and Rule 12 of the Implementing Regulations of the Chinese Patent Law (IRCPL), the invention involved shall be exclusive to Edan. Determination of ownership of a service invention is unrelated to whether the new organization has invested in material and technological conditions, but rather mainly depends on two factors, i.e., the time standard (within 1 year after the employee left the former organization), and the relevance standard, that is, whether the content of the invention-creation is related to the employee's job or assigned tasks in the former organization. In the case that the relevance can be determined, it is not necessary to consider whether the inventor conducted new R&D activities in the new organization after demission.

"The relevance standard" is based on the principle that if the ex-employee, together with the new organization, intentionally possesses his/her R&D achievement in the former organization, he/she can completely hide the creativity arising in the former organization in head, and then organize a totally different team in the new organization to reproduce a perfect R&D process, thereby proving a different inventor for the invention. As such, the provisions of the CPL and IRCPL are neutered as an empty shell, which is not conducive to the protection of legitimate rights and interests of the former organization, thereby causing its hesitation in investing in R&D costs and training talents, and hindering technological progress.

Edan's claims are upheld by the Intellectual Property Court of the Supreme People's Court in the end.

The Supreme Court held: the two employees who left Edan and were hired by Wondfo make creative contributions to the substantive features of the invention-creation involved, and are the inventors of the invention-creation involved. According to the provisions of Rule 12.1 IRCPL, the invention-creation involved, which was accomplished within one year after the two employees involved left Edan and was related to their jobs in Edan, matches the circumstance of being determined as a service invention-creation. Therefore, the invention-creation involved is a service invention of the employees involved in Edan, and the application right for the patent should belong to Edan; and Wondfo's claim of appeal that the application right for the invention-creation involved should be owned by Wondfo, or co-owned by Wondfo and Edan, lacks legal basis and is not upheld.

In the course of lawsuit, the Intellectual Property Court of the Supreme People's Court demonstrated professional spirits and trial skills. In addition to adducing evidence by both parties, the court also stressed on investigation concerning whether Wondfo had conducted relevant research before the employment of Edan's ex-employees, which reached a negative outcome, thereby further confirming the source of the patent technology applied for by Wondfo. The court also provided both parties the opportunity to fully express their opinions, including the opportunity to submit legal expert's opinions, and impartially considered the cross-examination opinions and expert's legal opinions of both parties.

The position of the Supreme People's Court in this case will strengthen the confidence of innovative enterprises that emphasize R&D and operate honestly in carrying out R&D and protecting their core technology assets!