Case Review | Determining Injunctive Relief in Patent Infringement Lawsuits After Patent Ownership Transfer
By Linna Song
What happens if a patent owner sells or transfers the patent while a patent infringement lawsuit is still ongoing? Does the original patentee lose the right to pursue an injunction or damages?
A recent ruling by China’s Supreme People’s Court (SPC) provides an important clarification on this question, one that strikes a balance between procedural fairness and the substantive protection of patent rights.
The Case in Brief
The case involved a dispute over a utility model patent titled “Magnetic Data Cable”. The original patent holder, Mr. Chen, sued a Shenzhen-based company and its sole shareholder, alleging that the company’s magnetic charging cables infringed his patent.
During the first-instance proceedings, Chen transferred the patent ownership to another individual, Mr. Wang. Despite this change, the Shenzhen Intermediate People’s Court continued to hear the case and ultimately ruled that infringement had occurred, ordering the defendant company and its shareholder to compensate Chen RMB 20,000 (around 2,800 USD) for damages and legal expenses.
However, the court did not order an injunction to stop the infringing sales.
When the case reached the Supreme People’s Court, the question was no longer whether infringement had occurred (that was clear), but whether Chen, as the former patent owner, was still entitled to injunctive relief after transferring the patent to Wang.
The Supreme Court’s View: Transfer Does Not Terminate the Plaintiff’s Standing
The SPC’s decision reaffirmed a fundamental principle of Chinese civil procedure: “The transfer of the disputed civil right during litigation does not affect the original party’s qualification or procedural standing.”
This rule, found in Article 249 of the 2022 Interpretation of the Civil Procedure Law, establishes that when the subject matter of a lawsuit (such as a patent) is transferred, the original plaintiff retains standing, and any judgment rendered is binding upon the transferee (the new owner).
In other words, Chen remained a legitimate party in the litigation even after transferring the patent. His claims, including the request to stop the infringement, continued to have legal effect and extended to the new patent owner, Wang.
The Court emphasized that unless the defendant can prove it obtained a license from the new patent owner, the infringement continues to exist, and the original patentee’s request to stop the infringing act must be supported.
By failing to issue an injunction solely because the patent was transferred mid-proceeding, the first-instance court had misapplied the law.
Why It Matters: Preventing “Infringement Gaps” After Patent Transfers
The SPC’s reasoning highlights an important policy goal: preventing ongoing infringement simply because ownership changes.
If courts refused to grant injunctions every time a patent changed hands, infringers could exploit procedural timing to continue their activities unpunished. The decision ensures continuity in legal protection: the rights and remedies initiated by the original patent owner automatically extend to the transferee.
This is consistent with the broader legislative intent of China’s Patent Law: to safeguard patentees’ lawful interests and encourage innovation by providing robust, uninterrupted protection of patent rights.
A Practical Takeaway for Rights Holders
For international businesses and IP practitioners operating in China, this case offers several practical insights:
1. Patent transfers do not halt pending infringement actions.
The original owner retains procedural standing, and judgments are binding on the new owner.
2. Courts will continue to support injunctions post-transfer.
Unless the infringer can prove it obtained permission from the new patent owner, the court can still order to stop the infringing behavior.
3. Coordination between assignor and assignee is key.
Both parties should maintain communication to ensure ongoing litigation and enforcement remain aligned with their shared interests.
4. Defendants should beware of assuming a transfer nullifies risk.
Even if the patent changes ownership, liability for past and continuing infringement remains.
The Broader Significance
This ruling strengthens confidence in China’s patent enforcement framework by clarifying that procedural formalities should not undermine substantive rights. It underscores a maturing judicial approach that values both predictability and fairness in the protection of intellectual property.
By ensuring that injunction relief survives patent transfers, the Supreme People’s Court reinforces the message that in China’s courts infringement cannot find shelter in technicalities.