By Royal Hu
In patent disputes, many companies assume that infringement only exists when someone manufactures or sells a complete infringing product.
Chinese courts are increasingly taking a broader view.
This principle is known as indirect patent infringement, and it is becoming increasingly important in industries such as electronics, machinery, automotive products, consumer devices, and technology manufacturing.
Direct vs. Indirect Infringement
Under normal patent rules, a product infringes only if it contains all the technical features protected by the patent. This is often called the “all-elements” principle.
Chinese courts have recognized that limiting liability only to the final manufacturer could allow businesses to avoid responsibility too easily.
As a result, courts now increasingly examine whether a supplier knowingly provided products specifically intended to implement patented technology.
What Chinese Courts Look At
Chinese judicial rules allow liability where a company knowingly provides materials, components, equipment, or products specially used to implement a patented invention without authorization from the patent owner.
In practice, courts usually focus on three main questions:
- Was the component specifically designed for the patented technology?
- Does the product have substantial non-infringing uses?
Did the supplier know how the product would be used?
If a component has many ordinary commercial uses, infringement is less likely.
The Electronic Cigarette Example
One important Supreme People’s Court case involved electronic cigarettes.
The patent covered a complete system involving both a vaping device and a cartridge. The defendant sold only the device, while consumers separately purchased the cartridges needed to complete the patented system.
Technically, the defendant’s product alone did not contain all the required patent features.
Even so, the Court still found infringement.
Why?
The Court concluded that businesses cannot avoid patent liability simply by leaving the final assembly step to consumers.
Why This Matters
This approach significantly expands patent risks for manufacturers and suppliers in China.
A company may face infringement claims even if it produces only:
- components;
- replacement parts;
- specialized accessories;
- software systems;
- technical modules; or
other products designed mainly for patented systems.
For patent owners, these decisions provide stronger tools to stop infringement throughout the supply chain.
For manufacturers, they are a reminder that patent compliance should not focus only on final products. Components and technical accessories may also create legal risks.
Conclusion
Chinese courts are adopting a more practical approach to patent infringement in complex supply chains.
Today, liability may extend not only to the company selling the final product, but also to businesses supplying key components specifically intended for patented technology.
For both Chinese and international companies, this means that understanding indirect infringement has become increasingly important when manufacturing, sourcing, or selling products in China.