Achievements | Supreme People’s Court Overturns Verdict in Final Appeal: Lawyers Yaoxiong Lou and Zheng Xu Secure Victory in Patent Case Retrial

Recently, the Supreme People’s Court issued a final judgment in the second instance, overturning the original verdict in a dispute over remuneration and award system for employee’s invention. The case, represented by lawyers Yaoxiong Lou and Zheng Xu of Zhonglun W&D Law Firm on behalf of the defendant, concluded after more than two years of litigation. The Supreme Court revoked the first-instance judgment and dismissed all of the plaintiff’s claims. 

Case Background

The case originated in 2006 when Zhang [Redacted] and Rechsand Science & Technology Group Co., Ltd. jointly completed the patent in question. The patent was filed on September 30, 2006, under the Company’s name, with the inventors listed as Qin [Redacted] and Zhang [Redacted]. However, on August 6, 2019, Zhang [Redacted] claimed that the patent was a service invention completed during his employment and demanded that the Company pay corresponding inventor remuneration.

Case Process

During the first instance, the Company’s defense attorney argued that Zhang [Redacted] was not the actual inventor but held a managerial position as a deputy dean with no technical R&D capabilities. The initial court, however, did not support this view, ruling that Zhang [Redacted] had preliminarily proven his status as the inventor. As a result, the Company was required to provide further evidence but failed to do so. The first-instance court concluded that Zhang [Redacted] was entitled to inventor remuneration, and the Company lost the case.

In the second instance, Rechsand Science & Technology Group Co., Ltd. appointed Attorneys Yaoxiong Lou and Zheng Xu of Zhonglun W&D Law Firm to represent them. The two lawyers thoroughly examined the case details and actively communicated with Qin [Redacted], the other listed inventor, to uncover new factual clues. They successfully reinterpreted a key piece of evidence: a third-party company, Y, had filed an invalidation request for the patent with the China National Intellectual Property Administration on September 6, 2016, which underwent both first and second-instance proceedings. During the second instance, Zhang [Redacted] testified as a witness for Company Y, asserting that the patent was fraudulent. Zhang [Redacted] submitted a Witness Statement admitting that the experimental data in the patent embodiment were fabricated and that no actual experiments had been conducted. Although this fact existed during the first instance, it had been overlooked by the previous lawyers.

In the second instance, Attorneys Lou and Xu argued that Zhang [Redacted], as a listed inventor, had effectively admitted to not contributing creatively to the technical solution by fabricating the data and embodiment when drafting the patent application. Based on the principles of good faith and promissory estoppel, they contended that Zhang [Redacted] could not claim inventor remuneration.

Case Outcome

The Supreme People’s Court adopted the arguments presented by Attorneys Lou and Xu, overturning the original judgment and dismissing all of Zhang [Redacted]’s claims. The ruling emphasized the protection of substantive inventors and prevented false inventors from obtaining undue remuneration. This final judgment sets a clear legal standard for similar cases, stating that inventors must have made creative and substantive contributions to the invention. The decision holds significant guiding importance for handling disputes over remuneration and award system for employee’s invention and provides a reference for future similar cases.

Yaoxiong Lou

Email: louyaoxiong@zlwd.com 

Lawyer Yaoxiong Lou is a partner of Zhonglun W&D Law Firm and the director of the Professional Committee of Technology, Media, and Telecommunications. He served as director and professor at the Research Center for Communications Law of Beijing University of Posts and Telecommunications. He is an expert member of the drafting group for the “Telecommunications Act” appointed by the Ministry of Industry and Information Technology, an arbitrator at the China International Economic and Trade Arbitration Commission, an expert of the observer panel at the United Nations Commission on International Trade Law, a member of the New York State Bar Association, and the president of the Beijing Communications Law Research Association. He has provided long-term legal services to the Legal Affairs Bureau of the Ministry of Public Security, the Treasury Department of the Ministry of Finance, China Unicom, and China Telecom Corp Ltd., and published over ten professional works, including “Telecommunications Act” and “Jurisprudence”.

Zheng Xu

Email: xuzheng@zlwd.com

Lawyer Zheng Xu is a senior lawyer and a member of the Professional Committee of Technology, Media, and Telecommunications of Zhonglun W&D Law Firm. His main practice areas include corporate governance and compliance, cybersecurity and data protection, as well as dispute resolution. His current and former clients encompass China Unicom, China Telecom, China Mobile, service and media subsidiaries under China State Railway Group, the China International Center for Economic and Technical Exchanges under the Ministry of Commerce, the China Electronic Port and China Customs Press under the General Administration of Customs, as well as the China University of Labor Relations.