Legal Regulation Of Patent Abuse By Non-practicing Entities

With the advance of technology,the number of patent applications in China continues to grow,and the abuse of patent rights of Non-Practicing Entity occurs from time to time.The theory of legal regulation needs to be improved.Effective regulation of patent abuse by NonPracticing Entity is conducive to promoting the orderly development of the patent field and accelerating China’s pace of becoming a power in science and technology.Non-Practicing Entity refers to a company or individual that does not manufacture or sell products,obtains patents or patent combinations through independent research and development,patent transfer,patent license or authorization from other patentees,collects patent transfer or license fees from the transferee,requests infringement compensation from the infringer or defends infringement allegations.The Non-Practicing Entity is a neutral subject,which can promote industrial development and stimulate innovation.Among them,the profit-making Non-Practicing Entity obtains illegitimate benefits by abusing patent rights,such as abusing litigation,abusing infringement warning letters and restricting competition in patent licensing negotiations,which is threaten the development of enterprises.Therefore,it is of far-reaching significance to regulate Non-Practicing Entity patent abuse.When analyzing the abuse of patent right,we should determine the constituent elements and other reference factors of relevant abuse in combination with the characteristics of the subject.Malicious litigation can be used as a cause of action to bring a civil action,which applies the constitutive elements of infringement.It should also refer to the guiding factors such as the litigation frequency of Non-Practicing Entity,the purpose of litigation and whether they have legitimate interests.The determination of abusive infringement warning letter follows the principle of subjective and objective consistency,including that the warning letter is false objectively and there is intentional or gross negligence subjectively.The factors that should also be referred to include the frequency and quantity of sending warning letters and whether to sue or not.The identification of abuse in patent licensing negotiations involving the field of anti-monopoly law is mainly carried out by administrative organs,including two elements: market dominance and specific abuse.At present,China has no targeted legal provisions on the regulation of patent abuse by NonPracticing Entity.Principle of Forbidding the Abuse of Rights and Good Faith in Civil Laws can be applied as a guiding provision,make full use of patent invalidation procedures and compulsory licensing system.At the same time,the abuse is regulated by means of tort litigation,confirmation not tort litigation,reputation litigation and antitrust administrative litigation.Two judicial cases related to Non-Practicing Entity precedent,the court did not evaluate the nature of the subject and the abuse of patent right behavior.At the present stage,the application scope of the right to stop infringement is too large,the legal liability of the excessive issuance of infringement warning letters is not clear,and the identification of patent licensing fees is not clear.Based on our country’s legislative and judicial regulation,the paper analyses the United States and the European Union lawsuit system reform measures and direction,to perfect our law system are proposed for reference.