Usage Environment Feature & Patent Infringement in China

The concept of “usage environment feature” was first introduced by the Supreme People’s Court in a patent infringement dispute between Shimano INC. and Ningbo Sunrun Industry & Trade Co., Ltd. on 2012.

In the judgment of the Court, “Usage environment feature” was defined as “a technical feature for the purpose of describing the backgrounds or conditions under which an Inventions-Creation is applied in a claim.”

In addition, the concept was later incorporated into the Article 9 of the Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Disputes over infringement of Patent Rights (II), which became effective on April 1 2016.

Article 9 reads: “Where an alleged infringing technical solution cannot be applied in the usage environment as defined by the usage environment features in a claim, the People’s Court shall determine that the alleged infringing technical solution does not fall within the protection scope of the patent right.”

In this article, we will explain the “usage environment feature” in the infringement dispute between Shimano INC. and Ningbo Sunrun Industry & Trade Co., Ltd.

1. Case Background

Shimano Inc. (“Plaintiff” hereinafter), the patentee of the invention patent No. ZL94102612.4 (hereinafter “the ‘612 Patent”), sued, Ningbo Sunrun Industry & Trade Co., Ltd. (“Defendant” hereinafter), over the dispute that the bicycle rear derailleurs of types No. RD-HG-30A and RD-HG-40A manufactured and sold by the Defendant infringed the ‘612 Patent.

The First/ Second Instance and the First Retrial (2004-2010)

The court of the first and the court of the second instance and the first retrial did not support the argument of the Plaintiff on the infringement of ‘612 Patent. Our summary is as follows.

Plaintiff’s claim

The allegedly infringing products can only be mounted for use in the manner as defined by the claims of the ‘612 Patent. To be specific, the manner of mounting the allegedly infringing products to the bicycles comprises the essential technical feature in Claim 1 of the ‘612 Patent that “the bicycle frame is provided with a connection structure formed on a derailleur mounting extension of a rear fork end of the bicycle frame”.

Defendant’s claim

The ‘612 Patent is to protect the improved rear fork end of the bicycle frame, rear derailleur, and mounting method thereof. However, the allegedly infringing products can be mounted on the bicycle frames of other structures and in other ways than that defined by the ‘621 Patent. Also, the Defendant did not engage in mounting actions. Thus, the Defendant did not infringe the Plaintiff’s patent right.

Court’s Opinion

The court of the first retrial held that the main technical features of the ‘621 Patent are comprised of structural features and mounting features. Although the alleged infringing products possesses the structural features of the ‘621 Patent, the Defendant did not infringe the ‘621 Patent as the allegedly infringing products have not been mounted on bicycles yet and the allegedly infringing products can be mounted on the bicycle frames of other structures and in other ways than that defined by the ‘621 Patent.

In addition, the Plaintiff failed to provide evidence that the allegedly infringing products must be mounted with the mounting feature defined by the ‘621 Patent. As a result, the court of the first retrial ruled that the Defendant did not infringe the Plaintiff’s patent right.

The Second Retrial (2012) where Usage Environment Feature was introduced

The Plaintiff was dissatisfied with the judgment of the first retrial and applied for a second retrial before the Supreme People’s Court (SPC). The SPC conducted the second retrial and reversed the judgments of the first/second instance and the first retrial. Our summary is as follows.

Plaintiff’s claim

1) Previous judgements are incorrect in the protection scope of the ‘621 Patent and the applicable law for infringement judgement.

The subject matter of the ‘691 Patent is a bicycle rear derailleur bracket. Furthermore, the technical feature of a bicycle rear derailleur bracket is a necessary technical feature of the ‘691 Patent, while the “mounting feature”, whose function is defining the specific application area and scope, is not a necessary technical feature and unrelated to the subject matter of the ‘691 Patent.

Even if the allegedly infringing products have not yet been mounted on the bicycles, the allegedly infringing products still fall in the protection scope of the ‘691 Patent as long as the allegedly infringing products have all the necessary technical features and can be used to connect the rear derailleur with the bicycle frames.

2) Previous judgements lack supporting evidence for the fact that the allegedly infringing products can be mounted on the bicycle frames of other structures than that defined by the ‘621 Patent.

During the first-instance trial, the Defendant demonstrated that the alleged infringing products can be mounted directly on a bicycle frame without a derailleur mounting extension of a rear fork end by adding a gasket.

However, this mounting method is not customary in the industry. Moreover, the alleged infringing product were sold without any gasket but with a bolt (M10) and a positioning structure (8c) of the ‘621 Patent.

It can be seen that adding a gasket by the Defendant is exactly for filling the space left by a positioning structure (8c) of the alleged infringing products. this mounting method cannot pinpoint the location of the rear derailleur on a bicycle frame and does not meet the requirements of industrial production.

Defendant’s claim

1) The functional features or features of use conditions in Claim 1 of the ‘621 Patent are necessary technical features, because they are clearly included into the independent Claim. So, they should be taken into account in comparison.

In addition, the protected subject matter of the ‘621 Patent is not a bicycle rear derailleur bracket itself or a rear derailleur with a bracket, but a mounting method of mounting a rear derailleur on the extension of a bicycle frame through a bracket.

2) The alleged infringing products do not fall within the protection scope of the ‘621 Patent, because they lack multiple necessary technical features of the ‘621 Patent. Specifically, the alleged infringing products do not have a bicycle frame, thus failing to connect a bracket and a bicycle frame.

Also, when the rear derailleur is mounted on a bicycle frame, it is not necessary to have the predetermined posture that “the connection point of the first connection structure is under and behind the connection point of the second connection structure”.

Therefore, the Defendant did not infringe the Plaintiff’s patent right.

Court’s Opinion

The features of the rear derailleur and the bicycle frame that are to be connected to the rear derailleur bracket define the working environment and conditions of the rear derailleur bracket and thus corresponds with the usage environment features providing limitations on the rear derailleur bracket claimed in claim 1.

The disputed main technical feature that “the bicycle frame is provided with a connection structure formed on a derailleur mounting extension of a rear fork end of the bicycle frame” is a usage environment feature.

If the alleged infringing products have the feature, it means that the alleged infringing products have all technical features claimed by the ‘621 Patent. Therefore, the SPC ruled that the alleged infringing products did infringe the Plaintiff’s patent right according to the “All Elements Rule”.

The SPC held that, the specific structure of the alleged infringing products forms a specific matching relationship with the bicycle frame described in the claim. Because being mounted on a bicycle frame with the extension of a rear fork end is only reasonable commercial use of the alleged infringing products, the alleged infringing products are certainly to be used commercially for the bicycle frames as defined by the ‘621 Patent. Therefore, the SPC found the above-mentioned usage environment features in the allegedly infringing products. In other words, the allegedly infringing products fall within the protection scope of the claim 1 of the ‘621 Patent.

2. Focus of Dispute

In the judgement, the SPC pointed out that usage environment features included in claims are necessary technical features that can help define the protection scope of claims.

However, to what degree usage environment features can define the protection scope of claims needs to be determined on a case-by-case basis.

Generally, once the alleged infringing products can be used in such a usage environment, it will lead to the result of supporting the argument of infringement. In other words, even if the alleged infringing products can be used in other usage environments, the result of infringement will not be affected.

Also, there are exceptions. The alleged infringing products will be determined as infringing when they must be-rather than can be- used in such a usage environment.

What is noticeable is that the SPC did not clarify the specific basis for applying the standards of “can be used” and “must be used”. However, in the patent infringement dispute between Shimano INC. and Ningbo Sunrun Industry & Trade Co., Ltd., the standard of “must be used” was applied by the SPC, i.e., the rear derailleur to be protected by the ‘621 Patent must be used in such usage environments.

3. Comments on Usage Environment Feature

The usage environment feature will definitely limit the protection scope of a patent. However, the standards of “can be used” and “must be used” have not been defined clearly by far. Therefore, when confronted with patent infringement, the applicant should take a very cautious approach to argue according to the usage environment feature, because it may fail to meet the standard of “must be used” and get the support of the court.