Preliminary Injunction in IP Lawsuits

A preliminary injunction (“PI”) in IP lawsuits is an injunction entered by a court prior to a final determination of the merits of a legal case, in order to restrain a party from going ahead with a course of conduct or compelling a party to continue with a course of conduct until the case has been decided. [1] When China joined WTO, in order to link up the relevant laws and regulations with TRIPS, it has added the relevant provisions on PI in the revised Patent Law, Trademark Law and Copyright Law, with reference to PI system of Britain, USA and other countries. Meanwhile, the relevant judicial interpretations (including ”Questions Concerning the Application of Law to Pre-litigation Injunctions to Cease Patent Infringement Activities Several Provisions” ,” Interpretation of the Issues Relating to Application of Law to Pre-litigation Suspension of Infringement Activities of Exclusive Right to Use Trademarks and to Evidence Preservation”, and “Interpretation Concerning the Application of Laws in the Trial of Cases of Civil Disputes Arising from Trademarks” and etc. ) which have been promulgated by the supreme court, have further regulated the criteria and procedures of PI.

If an applicant wants to obtain PI, the key point is whether the applicant can grasp the criteria of judicial review.

According to the relevant laws, judicial interpretations, there are 2 fundamental premises for applying PI: (a) the applicant shall provide evidence to prove that the other party is committing or about to commit infringement on IPR; (b) the applicant’s legitimate interests maybe irreparably damaged if no action was taken in time. Because there are no definite criteria for these 2 fundamental premises, the common rules or tendencies on reviewing such premises of local judges may be used for reference.

Firstly, for the first fundamental premise, currently, the local judges will review substantively, which means the judges will require the applicant to provide evidence to prove the existence of the infringement. After checked the documents submitted by the applicant, the judge will issue PI based on the possibility whether the applicant will win the lawsuit. Because there are no quantifiable criteria for deciding whether the applicant will win the lawsuit, in practice, the judge will make the decision based on his/her experience and free evaluation of evidence. That’s why the applicant shall try its best to provide relevantly comprehensive evidence. Take the patent infringement cases for example, “Firstly, the applicant shall provide the valid patent certificate; then it shall provide the alleged infringing product, the evidence of legitimate sources, the technical characteristics of the alleged infringing product, and the comparison statement to prove that the technical characteristics of the alleged infringing product are the same or similar to its own product. In the decision, the judge shall explain the applicant’s claims, as well as the allegedly infringing product belongs to the protection scope of independent claims of patent. Based on the analysis of the infringement with the evidence provided by the applicant, the judge can additionally use many methods, such as doctrine of equivalents, doctrine of estoppels and etc..” [2].

Secondly, for the second fundamental premise, according to the numerous cases, the applicant can analyze the following aspects: (1) The infringement to goodwill and personality rights. Under such circumstance, the action will bring bad effect to the IP owner’s image and economic status, which cannot be measured by money. However, on the individual cases, the judges may also check whether the applicant fails to claim timely. (2) The corrosion of competitive advantage, e.g. the reduction of market share. This kind of damage cannot be calculated quantifiably, and the final damage is hard to estimate if the infringement has not been forbidden timely. (3) When the defendant does not have sufficient solvency, in order to avoid the loss of the applicant, some local judges (such as Shanghai, Jiangsu) may issue PI. The judges hold a more comprehensive attitude on PI to avoid big companies using this to strike competitors.

Overall, the local judges hold a strict and serious attitude on PI. If an enterprise is infringed on IP, who has to apply for PI, it shall provide the proper and relevant evidence in accordance with the practical rules and tendencies of the local court.
Note: [1], [2]: Quoted from Han Tianlan “On Preliminary Injunction in Intellectual Property Litigation”