Case Closed: Commission Sanctions Ruling Isn’t an Import Decision
The US Court of Appeals for the Federal Circuit dismissed an appeal for lack of jurisdiction, finding that a denial of sanctions at the International Trade Commission was not a “final determination” under trade law because it did not affect the exclusion of imported goods. Realtek Semiconductor Corp. v. ITC and Future Link Systems, LLC, Case No. 23-1187 (Fed. Cir. June 18, 2025) (Reyna, Bryson, Stoll, JJ.)
In 2019, Future Link entered into a license agreement with MediaTek, Inc. (not a party to the present litigation), which included a provision for a lump-sum payment if Future Link filed a lawsuit against Realtek. Future Link subsequently initiated a patent infringement complaint against Realtek before the Commission. During the proceedings, Future Link settled with a third party and determined that the settlement resolved the underlying dispute, prompting it to notify Realtek and ultimately withdraw its complaint. Realtek moved for sanctions, citing the MediaTek agreement as improper, but the administrative law judge (ALJ), while expressing concern about the agreement’s lawfulness, found no evidence it influenced the complaint and denied sanctions. The Commission terminated the investigation after no petition for review of the ALJ’s termination order was filed. Realtek then petitioned the Commission to review the denial of sanctions, but the Commission declined, closing the sanctions proceeding. Realtek appealed to the Federal Circuit, not challenging the investigation’s termination but seeking an order requiring Future Link to pay a fine based on the alleged impropriety of its agreement with MediaTek.
Realtek argued that the Commission and the ALJ violated the Administrative Procedure Act (APA). In response, the Commission and Future Link not only defended the denial on the merits but also challenged the Federal Circuit’s jurisdiction and Realtek’s standing to appeal. The Court agreed that it lacked jurisdiction under 28 U.S.C. § 1295(a)(6), which only authorizes review of final determinations under specific subsections of Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337). Because the Commission’s denial of sanctions under subsection (h) does not constitute a “final determination” under § 1337(c), the Court declined to address standing or the merits of the sanctions issue.
The Federal Circuit emphasized that a “final determination” within the meaning of § 1295(a)(6) refers to decisions affecting the exclusion of imported articles, such as those made under subsections (d), (e), (f), or (g) of § 1337. Realtek argued that the Commission’s denial of its sanctions request qualified as a final merits decision, but the Court disagreed, citing long-standing precedent, including its 1986 decision in Viscofan, S.A. v. ITC, that limits appellate jurisdiction to exclusion-related rulings. Because the sanctions decision had no bearing on whether products were excluded from importation, the Court held that it lacked the authority to review and dismissed the appeal.
Confidentiality Agreements Applied to Nonparty Recipients
In Dale v. T-Mobile US, Inc. – a putative antitrust class action litigation – Magistrate Judge Jeffrey Cole resolved whether and to what extent confidentiality agreements between parties apply to productions nonparty recipients of subpoenas made.
Background
In this litigation, the parties entered a confidentiality order governing discovery in the case. After the parties issued subpoenas to numerous non-parties, a dispute with the non-parties arose regarding certain portions of the confidentiality order. Although the parties and the non-party subpoena recipients “nearly reached agreement [during meet and confers] for amending the Confidentiality Order,” they could not agree on certain topics, including whether defendant’s in-house counsel would be permitted to review highly confidential information from the non-parties. A motion to amend the confidentiality order was brought to the court.
Although Judge Cole ultimately denied the motion, he provided the parties and non-parties with guideposts and encouraged all to work cooperatively toward a mutually acceptable resolution. Magistrate Judge Cole initially noted that non-parties have “vastly different expectations regarding the confidentiality of their information” and explained that “parties to a lawsuit must accept the invasive nature of discovery, non-parties are just that, not parties …, and they generally do not have anywhere near the same skin in the game.” Therefore, “a non-party is entitled to greater protection in the discovery process than parties….”
Judge Cole then turned to the merits of the parties’ arguments. In rejecting defendant’s argument that the non-parties should be bound by the confidentiality order because the court was “well-aware of the nonparty discovery that Plaintiffs’ claims would entail,” the judge cited to the plain language of the confidentiality order, noting that by its terms the order applies only to “any named Party to this action … and to Non-Parties who agree to be bound by this Order.” Magistrate Judge Cole then analyzed the three factors a court must consider when the modification of a confidentiality agreement is sought (citing Heraeus Kulzer, GmbH v. Biomet, Inc.). He found the first factor, the nature of the order, favored modification “because the non-parties did not agree” to the confidentiality order. He concluded that the second factor, the foreseeability that modification would become necessary, also favored the non-parties because the parties’ agreement “left open the very real possibility that non-parties — competitors with one of the parties — would disagree with it.” Finally, he found the third factor, the parties’ reliance on the order, “is really neither here nor there” because they knew “non-parties they planned on subpoenaing would understandably balk.”
Regarding the substance of the non-parties’ objections to the confidentiality order, Magistrate Judge Cole noted that “[t]he non-parties have some very real concerns about in-house counsel for a competitor poring over their documents” and that “it is no small matter for in-house counsel to compartmentalize information learned in discovery.”
Magistrate Judge Cole urged the parties and non-parties to “take a critical look at their current positions and make another attempt to come up with something workable” and to “think creatively with an eye toward what is truly and not merely academically meaningful.” He also suggested that the parties and non-parties “put together some sort of mutually acceptable agreement rather than have something perhaps imposed on them down the road.” Ultimately, Magistrate Judge Cole denied the motion to amend the confidentiality order and ordered the parties to meet and confer “with the forgoing considerations and weaknesses in positions in mind.”
Conclusion
This decision provides a few useful reminders. First, disputes that can be resolved without imposing upon the court should seek to be resolved amicably. It also serves as a reminder that parties will be bound by the plain terms of an agreement – especially one the court orders. Finally, protections afforded to non-parties in a litigation may be greater given the different expectations of non-parties who have “no skin” in the litigation. Thought should be given to this when drafting agreements that might impact a non-party.
An Oft-Overlooked Requirement in the N.Y. Commercial Division Rules: The Rule 11-e(d) Statement of Completion
Effective April 1, 2015, the Commercial Division of the New York State Supreme Court promulgated a series of reforms to the Rules of Practice for the Commercial Division, including the addition of new Rule 11-e, which provides specific requirements for responding and objecting to document requests.
In particular, Rule 11-e(a)-(b) requires parties to provide particularized responses and specify in detail whether documents are being withheld in response to all or part of the requests, and Rule 11-e(c) requires a date for the completion of document production prior to depositions. These are markedly different than those required by the Uniform Civil Rules that govern non-Commercial New York State Supreme Courts and County Courts, and have been the subject of much discussion by courts and practitioners in the ensuing years. However, one significant requirement of Rule 11-e that is often overlooked concerns Rule 11-e(d).
In particular, Rule 11-e(d) provides as follows:
(d) [b]y agreement of the parties to a date no later than one (1) month prior to the close of fact discovery, or at such time set by the Court, the responding party shall state, for each individual request: (i) whether the production of documents in its possession, custody or control and that are responsive to the individual request, as propounded or modified, is complete; or (ii) that there are no documents in its possession, custody or control that are responsive to the individual request as propounded or modified.
In other words, in addition to responding and objecting to document requests at the outset with specificity as required by Rule 11-e(a)-(b), one month prior to the close of fact discovery or another date set by a court, parties are further required to issue a statement that specifically denotes for each request whether document production is complete as requested or modified, or that they are not in possession of responsive documents. Such a formal obligation at the conclusion of discovery to specify whether production is complete for each individual request is not found in the Uniform Civil Rules or the Federal Rules of Civil Procedure, and appears to be entirely unique.
Despite this, Rule 11-e(d) seems to have largely gone unaddressed in the last decade with most courts and practitioners focusing instead on the other significant requirements of Rule 11-e. Even so, as recently as 2023, in Men of Steel Enterprises, LLC v. Bespoke Harlem W., LLC, 2023 N.Y. Slip Op. 30404[U] (Sup. Ct. N.Y. Co. 2023), the Honorable Joel M. Cohen ordered plaintiffs to submit amended responses to comply with the requirements of Rule 11-e(d) and did so despite the fact that plaintiffs had already represented in their opposition that they had produced all responsive documents and did not have additional documents in their possession, custody, and control—demonstrating that the Rule is alive and well and may be enforced to the full extent, even if merely as a formality. While it remains unclear how focused courts will be on the requirements of Rule 11-e(d) statements going forward, including their form and use, those practicing in the Commercial Division should be prepared to comply with its requirements.
After Oral Argument, Supreme Court Dismisses Labcorp Appeal of Class Certification Based On Article III Standing and Circuit Split Persists
On April 29, 2025, the Supreme Court heard oral argument in Labcorp v. Davis, in which it considered the question of whether Article III standing must be determined for all members of the class, including uninjured members, at the outset of class certification. The issue presented is one that has deeply divided the federal courts of appeals after it was left open by the Court’s prior rulings in TransUnion LLC v. Ramirez and Spokeo, Inc. v. Robins. On June 5, 2025, the Supreme Court dismissed the case as improvidently granted, leaving the question unresolved.
Backdrop: Labcorp Case Before the Ninth Circuit
In 2020, a class actional lawsuit was filed against Labcorp alleging that its express self-check-in kiosks violated federal and California disability laws because they were not accessible to blind individuals. The District Court certified two classes of legally blind Labcorp patients who were unable to access the kiosks: a nationwide class for purposes of injunctive relief under the ADA and a California class for purposes of monetary damages under the California statute.
On appeal, the Ninth Circuit affirmed the class certifications. Labcorp petitioned for review, arguing that only those who actually used the kiosks had Article III standing to sue and all uninjured members included in the class could not sustain their claims because they lacked an Article III injury.
The Supreme Court granted certiorari. The question presented for the Court’s consideration was as follows:
May a federal court certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III injury?
Labcorp’s Argument: Article III Standing Necessary for Class Certification
Petitioner Labcorp’s argument hinged on the predominance requirement of Rule 23(b)(3). Citing to In re Rail Freight Fuel Surcharge Antitrust Litigation and In re Asacol Antitrust Litigation from the D.C. Circuit and First Circuit, respectively, counsel for Labcorp noted that, when a class is defined to include plaintiffs without Article III standing, the Article III issue predominates and swamps any common issues.
Labcorp explained that, if a class is defined on the front end such that both injured and uninjured individuals are encompassed by the definition of the class, thousands of mini-trials would have to be conducted to separate them, which it argued would become more important than any other common issues.
The justices questioned Labcorp as to why uninjured members would require standing given that, ordinarily, only one person must satisfy the standing criteria in order to invoke the jurisdiction of the Court.
Moreover, the justices highlighted that, specifically in the class context, absent class member claims are added to the case when it is certified, but they are not added as new parties. Based on this distinction, the justices further questioned why it would be necessary to prove whether individuals were injured or uninjured at the outset.
The justices’ final line of questioning pertained to when the appropriate time would be to determine Article III standing, with one of the justices suggesting that the determination of Article III standing is only pertinent when apportioning damages.
The rationale for this was that courts do not do anything with respect to uninjured members’ claims until the damages stage. Thus, because uninjured class members’ claims are “just riding along [and] not affecting the litigation in any way,” the justices highlighted that this cast doubt on the necessity of a showing of Article III standing at the outset.
Respondent’s Argument: Article III Standing Not a Requirement for Absent Members
Counsel for Respondent Davis began his argument highlighting that centuries of precedent dictate that only the representative of a class, who is actually before the court as a named party, must prove Article III standing at the outset of class certification and not the absent class members.
Further, Davis’ counsel argued that the understanding has always been that absent class members are not parties over whom the court exercises jurisdiction unless and until the court is doing one of two things: exercising its remedial power with respect to an absentee or deciding a question that it wouldn’t otherwise have to decide, such as an individual question.
The justices’ main line of questioning revolved around how uninjured members would be eventually left out of the damages calculation. Counsel noted that there would have to be an administratively feasible mechanism outlined at the outset to weed out the uninjured members for damages purposes.
Counsel for Davis ended by arguing that Labcorp’s proposed alternative could actually have disastrous consequences for other defendants. As is, defendants can “rest easy knowing that they’ve prevailed in a class action and someone isn’t going to run into state court and bring the exact same claim and say, a-ha, we didn’t have Article III standing in that first case.” This, counsel argued, would disturb the finality of class-wide judgments.
Supreme Court’s Dismissal of the Case and Kavanaugh’s Dissent
On June 5, 2025, the Supreme Court dismissed the case, noting that it had been improvidently granted. Justice Kavanaugh, however, dissented, and the concerns highlighted in his dissent were foreshadowed by his questioning concerning real-world consequences during argument.
Justice Kavanaugh stated that he “would hold that a federal court may not certify a damages class that includes both injured and uninjured members.” His rationale was that, when there is a damages class that includes both injured and uninjured members, the case could not by definition meet the Rule 23 requirement that common questions predominate.
Turning attention to real-world consequences, Justice Kavanaugh noted that classes that are overinflated with uninjured members threaten massive liability for businesses that are targeted with class actions. This, he said, can coerce businesses into unjustifiably costly settlements, which could have severe and widespread consequences. When forced into unjustifiably costly settlements, businesses would then raise the costs of doing business and would be forced to pass on the costs to consumers in the form of higher prices, to retirement account holders in the form of lower returns, and to workers in the form of lower salaries and lesser benefits.
Future of Article III Standing and Class Certification with a Surviving Circuit-Court Split
Currently, there is a three-way split amongst circuits regarding the question of Article III standing and class certification.
The D.C. Circuit and First Circuit permit certification of a class only if the number of uninjured members is de minimis. The Ninth Circuit permits certification even if the class includes more than a de minimis number of uninjured class members. The Eighth and Second Circuits have taken the strictest approach, rejecting certification if any members are uninjured.
Because the Supreme Court still has not ruled on the issue, defendants should continue to scrutinize potential standing deficiencies for both class representatives and absent class members as well. However, there may yet be a resolution, as the issue has been raised again in State Farm Mut. Auto. Ins. Co. v. Jama.
In its petition for certiorari, State Farm poses the question of whether a Rule 23(b)(3) damages class can be certified when some members of the proposed class lack any Article III injury. Whether the Supreme Court will grant certiorari is unclear, but if it does, there will be a renewed opportunity for the Court to answer the question and resolve the longstanding circuit split on the issue.
Texas Governor Signs HB 40, Expanding Jurisdiction of the Texas Business Court
On the final day of the 89th Legislative Session, the Texas Legislature passed House Bill 40 (HB 40) to expand the jurisdictional and operational framework of the Texas Business Court.1 The Bill has since been signed by Governor Abbott and becomes effective on September 1, 2025. The new law builds on Texas’s 2023 initiative to establish a specialized venue for complex business litigation and makes the forum more accessible to corporate litigants. The most significant changes include amendments to reduce the monetary threshold for invoking the Business Court’s jurisdiction and to expand the category of case types that may be heard.
The Bill’s amendments, coupled with broader national conversations around litigation costs and court specialization, support the Business Court playing an increasingly important role in the national corporate governance and commercial litigation landscape. The new statutory changes also make now the time for Texas businesses and in-house counsel to evaluate whether their governing documents and contracts are up-to-date to take full advantage of Texas’s new laws.
Reduced Monetary Threshold
HB 40 lowers the Business Court’s amount-in-controversy requirement from $10 million to $5 million — and allows that threshold to be met by aggregating “the total amount of all joined parties” claims — for certain case types. These include:
cases arising out of a “qualified transaction” (defined as any single transaction or a “series of related transactions” with consideration valued at or above $5 million);
actions arising out of a “business, commercial, or investment contract or transaction,” other than an insurance contract, in which the parties agree to Business Court jurisdiction;
claims involving alleged violations of the Texas Finance Code or Business & Commerce Code by an organization, its officers or other governing persons; and
certain matters relating to intellectual property rights or trade secrets disputes.
Under the initial version of the Texas Business Court Act that passed in 2023, the lower $5 million threshold applied only to fundamental internal governance and securities matters — such as derivative actions, internal affairs disputes, securities claims against an organization or related persons, fiduciary duty claims against controlling persons and managerial officials and the like. The Bill’s promulgation of a lower threshold for other claim types within the Court’s jurisdiction should ultimately make the Business Court more accessible to a broader array of commercial parties and increase the volume of cases.
Additional Claim Categories Within Business Court Jurisdiction
In a significant addition, HB 40 adds intellectual property and trade secrets claims to the statute’s jurisdictional coverage. While the 2023 Act did not authorize the Business Court to hear intellectual property matters, HB 40 now expressly permits the Court to hear trade secrets cases and other “action[s] arising out of or relating to the ownership, use, licensing, lease, installation, or performance of intellectual property.”
HB 40 separately clarifies the Business Court’s authority to render decisions on arbitration matters. Parties that otherwise have standing to file claims in Business Court will be permitted to use the forum to enforce arbitration agreements, appoint arbitrators, review arbitral awards or seek other judicial relief authorized by an arbitration agreement.
While the above amendments to the Business Court’s jurisdictional scope are significant, HB 40 was almost more expansive. The initial version of the Bill would have extended the Business Court’s jurisdiction to also capture insurance and indemnity contract matters, “fundamental business transactions” involving mergers and similar large corporate asset transactions, certain large banking litigations, malpractice claims filed by corporate clients and multidistrict litigation (MDL) transfer cases. However, HB 40 was repeatedly revised in committee and through the legislative process to land on a much-narrowed change in the law, at least for now.
Other Substantive Changes to Texas State Laws
HB 40 includes other amendments to Texas state laws affecting the rights and obligations of parties seeking to litigate in the Business Court. Some of the more notable such amendments are addressed below.
Venue: The Bill expressly permits parties to amend their governing documents to designate venue for Business Court matters involving derivative proceedings, governance or internal affairs disputes, fiduciary duty claims against certain corporate persons and other actions arising out of the Business Organizations Code.
Exclusion of Consumer Actions: The Bill prohibits parties from filing state and federal consumer claims in Business Court, even if supplemental jurisdiction may otherwise exist. This amendment essentially prevents large consumer class actions from flooding the Court’s gates.
Expansion of Injunctive Relief Procedure: A new provision is added to the Texas Civil Practice & Remedies Code allowing parties to seek writs of injunction from another Business Court judge if the appointed judge is unavailable to timely consider and implement the writ’s purpose.
Montgomery County Moves Division: Montgomery County (covering Conroe, The Woodlands and other areas north of Houston) is being transferred out of the non-operational Second Business Court Division and added to the Eleventh Business Court Division (Houston). Houston — as well as Dallas — has notably received a large share of the new case filings in the opening months of the Court’s existence.
Preserving Rural Business Court Divisions: The legislature modified statutory sunsetting language from the Business Court Act to preserve the six non-operational divisions of the Business Court — namely the Second, Fifth, Sixth, Seventh, Ninth and Tenth Divisions (color-coded in the white regions of the map below).2
Context: New Industry Pressure in Delaware Increases Appeal for Texas Court System
The Texas Legislature’s passaContext: New Industry Pressure in Delaware Increases Appeal for Texas Court Systemge of HB 40 — less than a month after passing another business-friendly amendment to the Texas Business Organizations Code (SB 29) — comes at a time of significant scrutiny as to whether Delaware remains the premier state for incorporation and corporate governance.
While Delaware has long been the preferred forum for resolving internal governance and fiduciary matters, recent backlash from institutional investors and industry group advocates has highlighted perceived shortcomings in the Delaware Chancery Court. The Delaware Legislature has tried to step in to curb the noise, including by amending the Delaware General Corporation Law to add new safe harbor protections for controlling stockholder transactions, exculpating controlling shareholders from liability for alleged breaches of the duty of care, and implementing limits on shareholder books and records requests.
The national discourse continues nonetheless. In fact, the same week that HB 40 made its final rounds through the Texas Legislature, a Stanford Law School study3 also made rounds through corporate boardrooms, again questioning outcomes out of the Delaware Chancery Court. The study specifically found that the Chancery Court system has increasingly allowed large fee multipliers for plaintiffs’ attorneys, often exceeding 10 times the lodestar, at higher rates than observed in cases out of the federal court system. These findings have prompted renewed criticism from corporate governance groups and further calls for reform.
The growing tension in Delaware should ultimately increase the appeal of Texas and its alternative corporate governance system.
Conclusion
The Texas Legislature was busy this session expanding corporate protections and enhancing its Business Court system. The enactment of HB 40 specifically helps Texas build out its Business Court framework by refining jurisdictional standards and procedural mechanisms to expand access to the Court. Importantly, the statutory changes this session may require corporate parties to revise their governance documents and contracts to take full advantage of these laws. Katten attorneys across multiple practice groups continue to closely monitor developments and to counsel clients on invoking new protections provided by the legislature.
[1] The Texas Legislature enacts HB 40 just weeks after passing Senate Bill 29 (SB 29) — which previously expanded the Business Court’s jurisdiction over corporate governance matters and also extended related litigation protections to domestic entities. See Texas Governor Signs New Business-Friendly Governance Law to Promote In-State Corporate Growth: Senate Bill 29 Analysis, Katten (May 14, 2025), available at https://natlawreview.com/article/texas-governor-signs-new-business-friendly-governance-law-promote-state-corporate.
[2] See Texas Business Court Divisions Map, Tex. Judicial Branch, available at https://www.txcourts.gov/media/1458995/texas-business-court-divisions-map.pdf.
[3] Grundfest, Joseph A. and Dor, Gal, Lodestar Multipliers in Delaware and Federal Attorney Fee Awards (April 30, 2025), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5237545.
Jurisdiction Affirmed: Trademark Ripples Reach US Shores
Addressing for the first time the issue of whether a foreign intellectual property holding company is subject to personal jurisdiction in the United States, the US Court of Appeals for the Eleventh Circuit reversed a district court’s dismissal and determined that the holding company, which had sought and obtained more than 60 US trademark registrations, had sufficient contacts with the US to support exercise of personal jurisdiction. Jekyll Island-State Park Auth. v. Polygroup Macau Ltd., Case No. 23-114 (11th Cir. June. 10, 2025) (Rosenbaum, Lagoa, Wilson, JJ.)
Polygroup Macau is an intellectual property holding company registered and headquartered in the British Virgin Islands. Jekyll Island is a Georgia entity that operates the Summer Waves Water Park and owns a federally registered trademark for the words SUMMER WAVES. In 2021, Jekyll Island discovered that Polygroup Macau had registered nearly identical SUMMER WAVES marks. After Polygroup Macau asked to buy Jekyll Island’s domain name, summerwaves.com, Jekyll Island sued Polygroup Macau for trademark infringement and to cancel Polygroup Macau’s marks. The district court dismissed the case for lack of personal jurisdiction, finding that “the ‘causal connection’ between Polygroup Macau’s activities in the United States and Jekyll Island’s trademark claims was too ‘attenuated’ to support personal jurisdiction.” Jekyll Island appealed.
The Eleventh Circuit reviewed whether personal jurisdiction was proper under Federal Rule of Civil Procedure 4(k)(2), also known as the national long-arm statute. Rule 4(k)(2) allows courts to exercise personal jurisdiction over foreign defendants that have enough contacts with the US as a whole, but not with a single state, to support personal jurisdiction. To establish personal jurisdiction under Rule 4(k)(2), a plaintiff must show that:
Its claim arises under federal law.
The defendant is not subject to jurisdiction in any state’s courts of general jurisdiction.
“[E]xercising jurisdiction is consistent with the United States Constitution and laws.”
The parties agreed that the first two elements were satisfied; the only dispute was whether the exercise of jurisdiction was consistent with due process.
The Eleventh Circuit noted that in the patent context, the Federal Circuit determined that a foreign defendant that “sought and obtained a property interest from a U.S. agency has purposefully availed itself of the laws of the United States.” The Eleventh Circuit found that a trademark registration is even stronger than patent rights because a “trademark registrant must show that he is already using the mark in U.S. commerce to identify and distinguish goods or intends to soon.” Polygroup Macau had more than 60 registrations and allowed other companies and customers to use those marks, which was enough to establish that it had sought out the benefits afforded under US law.
Additionally, while Polygroup Macau did not license its trademark rights, it permitted other related companies to use the SUMMER WAVES trademark to identify their products. Products marked with Polygroup Macau’s registered mark were sold in the US through dozens of retailers. Although there were no formal written agreements, the Eleventh Circuit found that Polygroup Macau exercised some degree of control over the marks. And, since the trademark rights themselves flowed from the mark’s use in domestic commerce, the Court found that Polygroup Macau “should have known that [the marks] would be used in United States commerce by related Polygroup companies.” The Court found that Polygroup Macau’s actions, taken together, displayed its attempts to exploit the US market and supported a finding of personal jurisdiction.
Finally, the Eleventh Circuit concluded that allowing related entities to use the marks was sufficiently related to the underlying trademark infringement action and found that requiring Polygroup Macau to appeal in a Georgia court was not unfair.
Artificial Doubt: Predictive Challenges to Image Evidence in the Age of AI and the Legacy of Digital Photographic Authentication
This article examines the emergent legal strategy of challenging the authenticity of visual evidence by claiming it was generated or altered by artificial intelligence (AI). Building on the historical trajectory of digital photography’s acceptance in courtrooms, it predicts a growing trend wherein defendants assert “AI fakery” as a form of reasonable doubt, even when logically implausible. The analysis draws upon precedents that guided the judicial reception of digital imagery, anticipating how similar legal tests may be adapted to confront the uncertainty that generative AI introduces. The rapid advancement of AI, as seen with the June 2025 release of Google’s Veo 3, may create an environment of potentially conflicting judicial decisions as the technology continues to evolve.
Introduction
As generative artificial intelligence matures, it brings with it a crisis of confidence in the authenticity of digital media. Yan (2023) argues that, as part of the evolution of defense challenges, the legitimacy and reliability of evidence can be a catalyst for judicial review. This article argues that such claims, regardless of their merit, will become a strategic lever for sowing doubt in juries, much like early objections to digital photography. By reviewing judicial approaches to photo admissibility in the digital era, a reasonable prediction of convergence will reshape how courts handle visual evidence allegedly tainted by AI manipulation.
The Rise of Digital Photo Skepticism in the Courts
The skepticism surrounding visual evidence is not a new phenomenon. In the 1990s and early 2000s, courts struggled with whether digital photographs could be reliably authenticated, given the ease of digital image manipulation. Early opinions show judicial hesitation. In State v.
Swinton (2004), the Connecticut Supreme Court reviewed the use of computer-generated images in forensic comparison and emphasized the need for a strong foundational showing of accuracy and reliability. The court demanded rigorous expert testimony to validate the process through which the images were produced.
Similarly, in United States v. Habershaw (Cole et al., 2015), the court admitted a digital image but required the proponent to demonstrate the chain of custody and technical reliability. These cases reflect a period when the authenticity of digital images was contested not only by technical challenges but also by a latent judicial unfamiliarity with the medium.
Yet by the 2010s, courts routinely accepted digital photographs, assuming their reliability, absent specific claims of tampering. In United States v. Anderson (United States v. Anderson, 2010), the courts held that “{a} photograph may be authenticated based on the testimony of a witness familiar with the scene depicted and accuracy of the image, even if the photograph is digital.” The focus has shifted from technological origin to contextual trustworthiness, a key pivot point that AI-generated evidence now threatens to undermine in reverse.
Generative AI and the Reemergence of Conscious Doubt
Deepfakes and other generative tools have placed us at another inflection point. Defense strategies are increasingly incorporating the question of whether a photo or video has been manipulated by AI, despite evidence to the contrary. Defense attorneys may begin to involve the specter of AI-generated forgeries to challenge the evidentiary integrity of images. Unlike prior challenges grounded in demonstrable technological limits, these objections are often rhetorical, leveraging juror unfamiliarity with AI to cast probabilistic doubt.
Jurors today may be particularly vulnerable to doubt when defense attorneys suggest that key evidence—especially images, audio, or video—could have been artificially generated using AI. Similar to the “CSI effect,” which skews juror expectations by portraying forensic evidence as infallible on television, the “AI doubt effect” may cause jurors to overestimate the plausibility of fabrication. Even without technical proof, merely introducing the possibility that a piece of evidence could be deepfaked or algorithmically altered may erode trust in its authenticity. This tactic exploits both the novelty and perceived mystery of artificial intelligence, prompting jurors to question evidence that would otherwise seem conclusive. As AI continues to advance, the courtroom may see a shift from questioning the integrity of investigators to questioning the integrity of reality itself. The result could be a chilling effect on prosecutions that rely on digital evidence unless courts develop clearer standards for authenticating media in the era of AI.
The legal system has already signaled its discomfort with AI-manipulated media. In United States v. Thomas (USA V. Thomas, No. 22-60367 (5th Cir. 2023), 2023), prosecutors were compelled to preemptively authenticate surveillance footage amid claims that it might have been generated by artificial means. Though the court ultimately admitted the evidence, the mere presence of such an objection illustrates a strategic pivot: invoking AI is no longer about proving fakery but about invoking its plausibility to unseat credibility.
Predictive Analysis: The AI-Evidence Paradigm Will Follow the Digital Photography Trajectory
Much like early digital photo cases, courts will need to resolve three emerging doctrinal issues: (1) the standard for authenticating AI-susceptible evidence; (2) the threshold for allowing “AI manipulation” objections to proceed; and (3) the weight such arguments should carry in jury deliberation.
Authentication:
Under Federal Rule of Evidence 901 (a) (Rule 901. Authenticating or Identifying Evidence, n.d.), the evidence must be “sufficient to support a finding that the item is what the proponent claims it is.” As a flexible standard, it has historically allowed for witness testimony or metadata. However, in the age of generative AI, this may no longer suffice. Courts may demand technical certification or expert validation-akin to the Swinton approach-especially if the defense invokes AI manipulation as a potential threat.
Objection Threshold:
Objections based solely on speculation that AI might have been involved, without affirmative evidence, risk clogging the judicial process. The court will likely adopt a gatekeeping function similar to that in Daubert v. Merrell Dow Pharmaceuticals, Inc., (Daubert V. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), n.d.), requiring defense assertations to meet a preliminary showing of plausibility before triggering extensive evidentiary hearings.
Jury Perception and Prejudicial Impact:
As with early digital photography cases, there is a risk that jurors, influenced by media portrayals of AI’s capabilities, will overestimate the ease of deepfake production. Courts must weigh the Rule 403 (Rule 403. Excluding Relevant Evidence for Prejudice, Confusion, Waste of Time, or Other Reasons, n.d.) danger of undue prejudice, as speculative claims of AI fakery may distort rational deliberation. Instructions clarifying the burden of proof and cautioning against technological speculation may become standard in trials involving digital imagery.
Preemptive Doctrinal Solutions
To prevent the erosion of evidentiary trust, courts, and legislatures must act proactively. The judicial system could establish a rebuttable presumption of authenticity for images with clear metadata, a chain of custody, and expert validation, placing the burden on the challenging party to offer more than mere conjecture.
Model jury instructions should evolve to include language addressing AI-related objections. For example: “The defense has raised a possibility that the image may have been altered by artificial intelligence. You may consider this claim only if you find credible evidence supporting it, not merely because such alteration is theoretically possible”.
Legal scholars have begun to call for standardized AI forensic tools. Just as photo enhancement tools gained legitimacy through peer review and industry standards, AI authentication mechanisms, such as digital provenance frameworks like Adobe’s Content Authenticity Initiative, may become part of the evidentiary protocol. A stall in this preemptive approach surrounds the inherent speed at which AI is advancing and able to avoid such authenticators.
Conclusion
The use of artificial intelligence to question the authenticity of visual evidence is not just a future concern; it is a present tactic, echoing the transitional anxiety that accompanies digital photography’s courtroom debut. Courts must apply historical wisdom, refusing all speculative doubt to supplant procedural rigor. Just as the judiciary adapted to the digital lens, it must now refine its focus to discern the real from the fabricated in an era where the line between them has never been more ambiguous.
References
Cole, K.A., Gurugubelli, D., & Rogers, M.K. (2015, May 20). A review of recent case law related to digital forensics: Proceedings of the 2015 annual ADFSL Conference on Digital Forensics, Security and Law. Daytona Beach, FL.
https://commons.erau.edu/adfsl/2015/wednesday/2/
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). (n.d.). Justia Law. https://supreme.justia.com/cases/federal/us/509/579/
Rule 403. excluding relevant evidence for prejudice, confusion, waste of time, or other reasons. (n.d.). LII / Legal Information Institute.
https://www.law.cornell.edu/rules/fre/rule_403
Rule 901. Authenticating or identifying evidence. (n.d.). LII / Legal Information Institute. https://www.law.cornell.edu/rules/fre/rule_901
State v. Swinton, 268 Conn. 781,847 A2d. 921 (2004).
https://caselaw.findlaw.com/court/ct-supreme-court/1407681.html
Yan, Q. (2023). Legal Challenges of Artificial Intelligence in the Field of Criminal Defense. Lecture Notes in Education Psychology and Public Media, 30(1), 167–175. https://doi.org/10.54254/2753-7048/30/20231629
USA v. Thomas, No. 22-60367 (5th Cir. 2023). (2023, January 6). Justia Law. https://law.justia.com/cases/federal/appellate-courts/ca5/22-60367/22-60367-2023- 01-06.html
United States v Anderson, No. 09.1733,618 F.3d 873 (8th Cir. 2010) https://caselaw.findlaw.com/court/us-8th-circuit/1536307.html
Justice Kavanaugh Signals One Conservative Vote in Labcorp Toward Imposing a Pre-Certification Standing Requirement Under FRCP 23
On June 5, 2025, the Supreme Court declined to decide the question, certified in Laboratory Corp. of America Holdings v. Davis, as to “[w]hether a federal court may certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III injury.” The Court instead dismissed the case as improvidently granted, due to apparent procedural complexities in how the case was presented on appeal.
Justice Kavanaugh nonetheless weighed in. In a lone dissenting opinion, Kavanaugh made clear where he stands, concluding that “Rule 23 and this Court’s precedents make this a straightforward case” requiring standing questions to be decided at the pre-certification stage of class proceedings. Specifically, “a federal court may not certify a damages class that includes both injured and uninjured members. Rule 23 requires that common questions predominate in damages class actions. And when a damages class includes both injured and uninjured members, common questions do not predominate.”
Kavanaugh’s dissenting opinion separately laments the “serious real-world consequences” and undue pressure that inflated, overbroad classes place on defendants—often “coerc[ing] businesses into costly settlements that they sometimes must reluctantly swallow rather than betting the company on the uncertainties of trial.”
While Kavanaugh’s position presumably conforms with many of the other conservative justices, the Court’s per curiam order dismissing the case leaves a current circuit split intact for now as to the proper resolution of standing questions at the pre-certification stage. The question should soon be presented to the Court again on a cleaner procedural vehicle rising through the appellate courts.
“Overbroad and incorrectly certified classes threaten massive liability—here, with potential damages up to about $500 million per year. That reality in turn can coerce businesses into costly settlements that they sometimes must reluctantly swallow rather than betting the company on the uncertainties of trial. . . . . [T]he coerced settlements substantially raise the costs of doing business. And companies in turn pass on those costs to consumers in the form of higher prices; to retirement account holders in the form of lower returns; and to workers in the form of lower salaries and lesser benefits. So overbroad and incorrectly certified classes can ultimately harm consumers, retirees, and workers, among others. Simply put, the consequences of overbroad and incorrectly certified damages class actions can be widespread and significant.” (Kavanaugh, J., dissenting)
OVER THE HILL: Litigator Adean Hill Jr. Just Can’t Seem to Get Service Accomplished
TCPAWorld has a bunch of little side stories in addition to all the big ones.
Here’s a quick one for you.
In Adean Hill v. Amity One Tax, 2025 WL 1592957 (N.D. Tex. June 5, 2025) the Court gave Hill one last chance to serve the complaint on the defendant.
Backing up, the case has been around for a while and the court had already given Hill until May 29, 2025 to get the complaint served. But that date passed without service.
Instead Hill filed a motion for substituted service–to permit service by mail– but that is a method of service already permitted in Texas apparently, so the motion was unnecessary. Then again his motion lacked a sworn statement of his previous efforts to serve Amity, so it would have been denied regardless.
Still the court gave him until July 7, 2025 to accomplish service. Let’s see if he pulls it off.
I know, weird one. But the idea of a litigator struggling with the basics of serving a complaint tells you what you’re dealing with out there at times.
A New Gateway for Cross-Border Enforcement: Hague Judgments Convention Comes into Effect in the UK on 1 July 2025
The Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (the “Hague Judgments Convention”) will come into effect in the UK on 1 July 2025. The process of enforcing UK judgments[1] in other contracting states (including all EU Member States (except Denmark), Ukraine and Uruguay) will now be far more streamlined in most cases, thereby reducing the delay, cost and uncertainty of enforcement in those jurisdictions.
While the entry into force of the Hague Judgments Convention in the UK is a welcome step in the facilitation of cross-border dispute resolution, particularly post-Brexit, there are some notable limitations to its scope. For instance, it does not provide for the automatic recognition and enforcement of relevant judgments, judgments must meet certain requirements, and it will apply only to UK judgments where the underlying proceedings were commenced on or after 1 July 2025.
Scope and purpose of the Hague Judgments Convention
The Hague Judgments Convention provides a uniform and simplified legal framework for the reciprocal recognition and enforcement of judgments in civil and commercial matters across contracting states, without the need to re-examine the substance of the case in fresh proceedings (provided that certain criteria are met; see below). For example, only a specified group of documents will need to be produced in every case[2].
Importantly, the Hague Judgments Convention applies to judgments where the dispute falls within both exclusive and non-exclusive jurisdiction clauses (in contrast to the 2005 Hague Convention[3], for example, which applies only to exclusive choice of court agreements), making it widely applicable to many cross-border contracts.
A broad range of civil and commercial matters are within its scope, including both contractual and tort claims. Several types of cases are excluded, however, including: status and legal capacity of natural persons; family law; defamation; insolvency; tax; customs; revenue; administrative law matters; anti-trust; privacy; activities of armed forces; carriage of passengers and goods; and intellectual property matters[4]. Arbitration and related proceedings are also expressly excluded[5].
Eligibility criteria for recognition and enforcement and other limitations
There are several limitations as to the scope and applicability of the Hague Judgments Convention, which will apply only to UK judgments where the underlying proceedings were commenced on or after 1 July 2025.
Notably, it does not provide for the automatic recognition and enforcement of judgments, unlike the simplified EU regime[6]. To be eligible for recognition and enforcement, a judgment must fall within one of the specified bases[7]. These include (but are not limited to) the defendant: having expressly submitted to the jurisdiction of the court of origin; having been habitually resident in the state of origin at the time it became a party to the relevant proceedings; or having had their principal place of business in the state of origin at the time it became a party to the proceedings, with the dispute arising out of activities of that business.
Recognition and enforcement may be refused in certain (relatively limited) cases. These include cases where: (1) a judgment has been obtained by fraud; (2) the defendant was not notified of the proceedings in sufficient time to arrange a defence; (3) recognition would be manifestly incompatible with public policy of the state in which enforcement is requested; (4) a judgment is inconsistent with a judgment given by a court of the requested state in a dispute between the same parties; or (5) a judgment is inconsistent with an earlier judgment given by a court of another state between the same parties on the same subject matter[8]. Any refusal by the requested state to enforce a judgment under the Hague Judgments Convention does not prevent a subsequent application for recognition or enforcement of the judgment in that state, however.
Further, the law of the requested state (i.e. the country in which recognition and enforcement is sought) governs the applicable procedure (unless the Hague Judgments Convention provides otherwise). This is likely to introduce some uncertainty around timing and process, albeit the relevant court is still required to act expeditiously[9]. Any pre-existing treaties to which a contracting state is a party will also continue to apply, although the contracting states must as far as possible interpret the Hague Judgments Convention to be compatible with any other treaties that are in force[10].
Geographic reach: other contracting states
The Hague Judgments Convention has broad geographic reach (where matters fall within its scope).
As at the date of publication (June 2025), contracting states include all EU Member States (except Denmark), Ukraine and Uruguay (and the UK from 1 July 2025) [11].
Albania, Andorra and Montenegro each have ratified the Hague Judgments Convention, where it is expected to come into force in 2026[12]. Meanwhile, the United States, Israel, Costa Rica, Kosovo, North Macedonia and Russia have all signed the Hague Judgments Convention, thus signalling an intention to join, although those states will not be bound until they ratify it.
Significance for the UK and its judicial system
Since leaving the EU, the UK has not benefited from certain mechanisms that facilitate cross-border enforcement of civil judgments across EU Member States, such as the Brussels I Recast Regulation 2015 (“Brussels Recast 2015”) and the Lugano Convention 2007. For example, Brussels Recast 2015 provided for automatic recognition of judgments across EU Member States without the need for a declaration of enforceability.
Since the end of the post-Brexit transition period on 31 December 2020, enforcement of UK judgments has followed the domestic rules in – and (where applicable) bilateral agreements with – overseas jurisdictions, all of which vary and can lead to legal uncertainty and increased costs.
The Hague Judgments Convention helps to fill this post-Brexit enforcement gap to some extent – albeit with the caveat that (as noted above) it does not provide for the automatic recognition and enforcement of judgments as does the simplified EU regime.
Accordingly, while the Hague Judgments Convention (re)strengthens the attractiveness of the UK as a forum for resolving international commercial disputes by providing a reliable enforcement mechanism in participating countries, it remains to be seen how the courts of contracting states will apply it in practice in terms of both procedure and any pre-existing treaties in place.
Conclusion
The entry into force of the Hague Judgments Convention in the UK is a welcome step in the facilitation of cross-border dispute resolution, particularly post-Brexit. The clear and streamlined framework for the recognition and enforcement of judgments across other contracting states will be of benefit to businesses and individuals who are engaged in international commerce and who wish to rely upon the UK courts to uphold their legal rights. Despites its limitations, the Hague Judgments Convention is still expected to improve legal efficiency and enhance enforcement predictability, whilst also reinforcing the UK’s position as a global legal hub.
[1] I.e. Judgments issued by the courts of England & Wales, Scotland and Northern Ireland.
[2] Article 12.
[3] Hague Convention of 30 June 2005 on Choice of Court Agreements.
[4] Article 2.
[5] Article 2(3)).
[6] E.g. under the Brussels I Recast Regulation 2015; see further below.
[7] Article 5.
[8] Article 7.
[9] Article 13(1).
[10] Article 23.
[11] Contracting states at the time of publication are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, European Union, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Ukraine and Uruguay. For the latest status, see: https://www.hcch.net/en/instruments/conventions/status-table/?cid=137 (links to a third party website).
[12] On 1 March 2026 in Albania and Montenegro; and on 1 June 2026 in Andorra.
SCOTUS Declines to Decide Fate of Classes with Uninjured Members: 8-1 Decision in LabCorp Leaves Unresolved Whether Rule 23 Allows Certification for a Class Containing Members Who Lack Standing
The United States Supreme Court, in an 8-1 decision on June 5, 2025, dismissed the highly anticipated case of Laboratory Corporation of America Holdings v. Davis as “improvidently granted.” Laboratory Corporation of America Holdings, dba Labcorp, v. Luke Davis, et al., No. 22-55873. The decision, or lack thereof, sidesteps a critical question for class action litigation: whether a damages class can be certified under Federal Rule of Civil Procedure 23 when it includes individuals who have not suffered any actual injury.
LabCorp was challenging a Ninth Circuit decision that allowed the certification of a massive class of visually impaired individuals under California’s Unruh Civil Rights Act. Cal. Civ. Code. § 51. The suit alleged LabCorp’s check-in kiosks were inaccessible, triggering statutory damages of $4,000 per violation. With a class size potentially in the hundreds of thousands, the exposure was astronomical—a classic case of “bet the company” litigation.
Background of the Case
LabCorp is a clinical diagnostic laboratory that tests samples collected from patients at its patient service centers. In a suit filed before the U.S. District Court for the Central District of California, a group of legally blind and visually impaired individuals sued LabCorp under the Americans with Disabilities Act (ADA) and the Unruh Civil Rights Act, alleging that the company’s self-service check-in kiosks were inaccessible. The District Court certified a damages class consisted of “[a]ll legally blind individuals in California who visited a LabCorp patient service center in California during the applicable limitations period and were denied full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations due to LabCorp’s failure to make its e-check-in kiosks accessible to legally blind individuals.”
LabCorp filed a petition under Rule 23(f)’s interlocutory appellate procedure, contending that the class encompassed uninjured individuals.
While LabCorp’s petition was pending, the District Court clarified the class definition, explaining that the class included “[a]ll legally blind individuals who . . . , due to their disability, were unable to use” LabCorp kiosks.
Subsequently, the Ninth Circuit granted LabCorp’s Rule 23(f) petition. LabCorp’s key argument was that the class was fatally overly broad and swept in countless individuals who may have never intended to use a kiosk in the first place, and thus suffered no actual injury. The Ninth Circuit relying on its opinion in Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31 F.4th 651, 665 (9th Cir. 2022), held that a class can be certified even if it includes “more than a de minimis number of uninjured class members.”
Supreme Court Proceedings
The Supreme Court initially granted certiorari to address the question of “[w]hether a federal court may certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III injury.” However, after oral arguments, the Court dismissed the case in a one-line order, without ruling on the merits, stating that the writ of certiorari was “improvidently granted.”
Justice Kavanaugh’s Dissent
Justice Kavanaugh dissented from the dismissal, expressing that the Court should have addressed the merits. He argued (correctly) that certifying a damages class containing uninjured members is inconsistent with Rule 23, which requires that common questions of law or fact predominate in class actions. Notably, Kavanaugh also emphasized the risk from “[c]lasses that are overinflated with uninjured members rais[ing] the stakes for businesses that are the targets of class actions.” He went on to underscore that certifying such classes “can coerce businesses into costly settlements that they sometimes must reluctantly swallow rather than betting the company on the uncertainties of trial.”
“Classes that are overinflated with uninjured members raise the stakes for businesses that are the targets of class actions.”
The Circuit Split
This decision effectively leaves undisturbed the split in authorities that has existed since the Supreme Court’s decision in TransUnion LLC v. Ramirez, 594 U.S. 413, 431 (2021). In TransUnion, while the Supreme Court held that “[e]very class member must have Article III standing in order to recover individual damages,” it did not decide when a class member’s standing must be established and whether a class can be certified if it contains uninjured class members. Subsequently, while some courts have denied class certification if there are uninjured class members, other courts have found it appropriate to address a class member’s standing after certification.
LabCorp, in its petition for certiorari, addressed the “three camps” of opinions:
Circuits holds that a class may not be certified where it includes members who have suffered no Article III injury (the Second Circuit, Eighth Circuit, and some courts in the Fifth and Sixth Circuits);
Circuits that have strictly applied Rule 23(b)(3)’s predominance requirement to reject classes that contain more than a de minimis number of uninjured members (the D.C. Circuit and the First Circuit); and
Circuits that have held that the presence of uninjured class members should not ordinarily prevent certification (the Ninth Circuit, Seventh Circuit, and Eleventh Circuit).
In light of the majority opinion, this question remains unresolved.
Beijing IP Court Releases 2024 Annual Cases
On April 30, 2025, the Beijing IP Court (BIPC) released their list of 2024 annual cases including 7 IP-related cases and 1 antitrust case. The Court explained that the cases “cover the four major intellectual property trial areas of patents, trademarks, copyrights, and competition and monopoly, involving innovative achievements in emerging industries in key areas such as medicine, communications, seed industry, platform economy and data. These cases reflect five major characteristics: increasing efforts to protect industrial innovation in key areas, cracking down on intellectual property infringements, helping to build a high-level socialist market economic system, serving the development of the intellectual property rule of law, and contributing Chinese wisdom to world intellectual property governance.”
Press conference releasing the 2024 annual cases.
The original text is available here via social media as the BIPC seems to be geoblocked as of the time of writing.
As summarized by the BIPC:
Case Ⅰ: Standard-Essential Patent Infringement and Royalty Rate Dispute——Assisting a Renowned Enterprise in the Communications Field to Reach a Global Settlement1. Case InformationPlaintiff: X CompanyDefendant: X Guangdong Mobile Communications Company.2. Basic FactsBoth parties to this case are renowned enterprises in the field of communications. At the time of this trial, the two parties had been engaged in licensing negotiations for many years over the 3G and 4G standard – essential patent portfolios, and there were numerous related parallel litigations in various jurisdictions globally, including infringement claims and tariff claims. The plaintiff is the holder of the invention patent titled ‘Base Station Device, Mobile Station Device and Communication Method’. It claims that the patent involved is a standard – essential patent of the LTE communication standard, and believes that the defendant’s acts of manufacturing, selling and offering for sale the two models of mobile phones involved constitute an infringement of the patent right involved, and requests the court to order the defendant to stop the infringing acts.The plaintiff did not file a claim for damages and stated that the purpose of its lawsuit was to advance the licensing negotiations. The defendant filed a counterclaim in the dispute over the royalties of the standard essential patents in this case, requesting the court to make a judgment on the licensing conditions, including but not limited to the licensing royalties, within the scope of mainland China for the 3G and 4G standard essential patents which the plaintiff owns and has the right to license for the intelligent terminal products manufactured and sold by the defendant. After trial, the Beijing Intellectual Property Court held that the counterclaim filed by the defendant met the acceptance conditions, thereby accepted the defendant’s counterclaim and actively promoted the joint trial of the two lawsuits, and finally facilitated the two parties to successfully reach a global patent cross – licensing agreement. On the same day, the parties applied for the withdrawal of this case and the counterclaim respectively on the grounds of reaching a settlement, and the Beijing Intellectual Property Court ruled to approve the withdrawal of the lawsuit by both parties.3. Judgment GistWhen a standard-essential patent holder files a patent infringement lawsuit, requesting the court to order the implementer to stop infringing the patent involved, and the implementer files a counterclaim, requesting the court to rule on the licensing conditions of the standard – essential patent portfolio including the patent involved, the court may take into account the fact that both the counterclaim and the original claim need to examine the same fact, that is, the licensing negotiation matters between the patent holder and the implementer regarding the patent involved and the related standard – essential patent portfolio.The counterclaim should be accepted and jointly tried, in a situation where there is a high degree of correlation between the counterclaim and the original claim.4.Typical SignificanceUnder civil procedure law theory, the relationship between the counterclaim and the original claim serves as the basis for their joint trial. The closer the substantive legal relationship between the original claim and the counterclaim, the more necessary it is to jointly try them in the same case. Article 233 of the “Interpretation of the Supreme People’s Court Concerning the Application of the Civil Procedure Law of the People’s Republic of China (Amended in 2022)” (referred to as the Judicial Interpretation Concerning the Civil Procedure Law) stipulates the acceptance conditions for counterclaims, stating that if the counterclaim and the original claim are based on the same legal relationship, there is a causal relationship between the claims, or the counterclaim and the original claim are based on the same fact, the people’s court should jointly try them. Generally, the counterclaims and original claims accepted by the people’s court are based on the same legal relationship or the same fact, but there are certain particularities in the field of standard – essential patents.A patent that must be used to implement a certain technical standard is called a standard-essential patent. With the vigorous development of the digital economy, standard-essential patent technologies are widely applied in fields such as mobile communication, intelligent connected vehicles, and the Internet of Things. A smart terminal product often contains thousands of standard – essential patents. Against the backdrop of intensified market competition and accelerated technological iteration, licensing negotiations and disputes surrounding standard-essential patents are increasing day by day. In a standard-essential patent infringement case, the right basis usually only involves one or several patents, and the alleged infringing product is also specific. However, in actual licensing negotiations, the two parties often conduct negotiations concerning the entire standard – essential patent portfolio of the patent holder and all related products of the implementer. This leads to a situation where a standard – essential patent infringement lawsuit and a royalty rate lawsuit are not consistent in the scope of patents and products involved. So, on the surface, it does not meet the general acceptance conditions for counterclaims in the civil procedure law. This is exactly the case in this lawsuit. Based on this, the Company claimed that the counterclaim filed by the Mobile Communications Company should not be accepted, and further claimed that the original claim and the counterclaim did not involve the same fact because it did not request the calculation and payment of infringement damages based on the licensing fees in this case.In response to this claim, the court referred to the previous judicial practice of standard – essential patent trials, comprehensively considered the trial ideas and judgment logic of standard – essential patent infringement lawsuits and royalty rate lawsuits, and held that in an infringement lawsuit involving standard-essential patents, whether to order the defendant to stop the infringement is not only determined by whether the defendant has implemented the patent involved without permission, but also by whether the negotiating parties have violated the FRAND obligation. To determine whether the patent holder has violated the FRAND licensing obligation and whether the implementer has violated the obligation of good faith negotiation, in addition to examining the negotiating behaviors of both parties, it is also necessary to examine whether the licensing conditions proposed by both parties during the negotiation process are obviously unreasonable. These licensing conditions are not only for the patent involved, but for all 3G and 4G standard-essential patents for which the X Company has the right to grant licenses. To determine whether the licensing conditions proposed by both parties are obviously unreasonable, it is necessary to determine the reasonable range of licensing conditions, and the trial content of the royalty rate lawsuit for standard-essential patents is exactly the licensing conditions.Based on this special trial logic, although the counterclaim and the original claim in this case are not based on the same legal relationship, there is a causal connection between them, and both are closely related to the fact of the licensing negotiation between the two parties. On this basis, the Beijing Intellectual Property Court held that the the counterclaim should be accepted and jointly tried.The acceptance of the counterclaim aligns with the interests of the parties, which was mutually acknowledged by both sides. The essence of standard -essential patent disputes is to promote negotiation consensus through litigation confrontation, and seek negotiation benefits through litigation procedures. In this case, on the one hand, the patent holder has already initiated an infringement lawsuit and sought injunctive relief in advance, on the other hand, the patent implementer hopes that the court will rule on the licensing conditions. If the counterclaim of the patent implementer is not accepted, it can only initiate another subsequent lawsuit, and a new lawsuit may still need to go through complex and time-consuming procedures such as service of process in foreign-related cases and objections to jurisdiction. This is not only inefficient, but also the sequence and speed of the two lawsuits may affect the negotiating positions of the two parties. Facts have proved that the joint trial of the two lawsuits promoted the two parties to successfully reach a global cross-licensing agreement and subsequent cooperation plan, which resolved the long-standing patent disputes between the two parties and achieved a win-win cooperation between the two parties.This case not only delves deep into the application of the law and clarifies the conditions for the joint trial of a standard-essential patent infringement lawsuit and a counterclaim for standard-essential patent royalties, but also adheres to the judicial concept of “promoting negotiation through trial and substantially resolving disputes”, promoting the substantial resolution of disputes, maximizing the interests of both parties, and promoting industrial licensing. The fair and efficient trial of this case demonstrates the high level and professionalism of China’s judicial protection of intellectual property rights, and reflects the wisdom and responsibility of Chinese courts in the new era in resolving international disputes, as a useful reference for the trial of similar cases in the future.
Case Ⅱ: Administrative Litigation Case Regarding the Invalidation of the Patent Right for “A Crystalline Form of Rocuronium Bromide”—— Assessing the Inventiveness of a Pharmaceutical crystalline form Patent Based on Technical Effects1. Case InformationPlaintiff: Chengdu Xin X pharmaceutical companyDefendant: National Intellectual Property AdministrationThird Party: Wang XX2. Basic FactsThe plaintiff is the patentee of an invention patent titled “A Crystalline Form of Rocuronium Bromide”. The third party filed a request with the National Intellectual Property Administration to declare the patent invalid. The National Intellectual Property Administration issued a decision under appeal declaring the entire patent invalid. Then the patentee filed an administrative lawsuit with the Beijing Intellectual Property Court, claiming that this patent achieved unexpected technical effects and had been commercialized and marketed with actual industrial value, and that the Claim 1 of this patent is inventive and the decision under appeal is incorrect. After the trial, the Beijing Intellectual Property Court held that crystalline form A of rocuronium bromide in this patent had better technical effects compared to the rocuronium bromide solid disclosed in the prior art, and that this patent is inventive and the decision under appeal was incorrect in this regard. Accordingly the court ruled to revoke the decision under appeal and ordered the National Intellectual Property Administration to make a new examination decision. After the judgment was pronounced, none of the parties appealed, and the first-instance judgment of this case has taken effect.3. Judgment GistWhen assessing the inventiveness of a pharmaceutical crystalline form patent, even if obtaining the crystalline form itself is obvious, it doesn’t necessarily mean it lacks inventiveness. It’s still necessary to consider its technical effects compared to the prior art. If the crystalline form achieves better technical effects than the prior art, and these effects are closely related to the formation of the medicine, it can be determined that the crystalline form patent is inventive.4. Typical SignificanceThe pharmaceutical and healthcare industry is not only a core component of China’s strategic emerging industries but also an important area related to people’s livelihood and well-being. Its sustainable development has a profound impact on the overall economic and social situation. As a typical technology – intensive industry, the pharmaceutical field is characterized by high investment in research and development, long cycles, and high risks. Therefore, intellectual property protection plays a prominent role in stimulating technological innovation, improving drug accessibility, and promoting industrial upgrading.Pharmaceutical patents are the most core intellectual property achievements of pharmaceutical enterprises. Regarding a certain drug, the patents obtained by pharmaceutical enterprises for different technical solutions form a complete patent system, including the effective active compound as well as the corresponding crystalline form and the composition. This system is like a “firewall” or a “moat”, and it effectively ensures that pharmaceutical enterprises can fully realize the commercial interests of the drug during the patent exclusivity period, enhancing their market competitiveness. The crystalline form patent in question in this case is a common type of pharmaceutical patent. The crystalline form usually refers to the solid existence form of the drug’s active compound. Due to different crystallization conditions and processes, the active compound of the same drug may yield crystalline forms with different spatial structures and molecular arrangements. This phenomenon of polymorphism in drugs is very important for drug research and development, because different crystalline forms exhibit different physical and chemical properties. This not only affects the preparation, processing, and storage of the drug, but also affects the dissolution and release characteristics of the drug in the human body, thus affecting the efficacy and safety of the drug. On the one hand, the selection of the crystalline form is of great significance for drugs. On the other hand, enterprises have invested a large amount of manpower and financial resources in the research and development of crystalline forms. Therefore, original research pharmaceutical companies usually include the crystalline form, compound, composition, and other inventions in the scope of patent applications together to form a multi-level and all-round pharmaceutical patent protection system.Generic pharmaceutical companies will also increase their efforts in researching the crystalline forms of known active compounds of drugs, and strive to avoid the crystalline form patents of original research pharmaceutical companies, in order to compete in the market for this drug. It can be seen how important crystalline form patents are for pharmaceutical enterprises and the pharmaceutical industry.As the exclusive jurisdiction court for administrative cases regarding patent authorization and confirmation across the country, the Beijing Intellectual Property Court has always attached great importance to the trial of administrative cases of requests for invalidation of patents related to pharmaceutical crystalline forms. By applying the rules of inventiveness judgement correctly, the judgment of this case clarifies the factors to be considered for the technical effects of pharmaceutical crystalline form patents, providing a reference and guidance for the decision of such cases.In this case, it is fully recognized by the court that the prior art has a strong demand as well as provide inspiration on forming crystalline forms of known active compounds and changing known crystalline forms. Compared with the process of creating a compound from scratch, the development of crystalline forms usually results from multiple attempts to use different crystallization methods for known active compounds. crystalline form inventions usually use the general properties of crystals known to those skilled in the art and conventional crystal preparation methods, which makes it extremely difficult for the technical means of such patents themselves to meet the requirement of non-obviousness in the inventiveness judgment. If the exclusive protection of an invention patent is granted merely because there are technical effects predictable by those skilled in the art, it is obviously inconsistent with the contribution made by the inventor to the prior art. There have always been different understandings in practice on how to consider the role played by the technical effects of crystalline forms in the inventiveness judgment. The judgment of this case proposes the rule that to determine whether a crystalline form has achieved technical effects that make it inventive compared with the prior art, it is possible to consider whether the technical effects recorded in the specification are related to the finished medicine.The technical effects described should be specific rather than general physical and chemical properties, such as purity, melting point, and hygroscopicity. If the recorded technical effects are highly related to the finished medicine and the marketed drug uses this crystalline form, it can be considered that it has beneficial technical effects. Correspondingly, the crystalline form patent is inventive and should be protected by the Patent Law.This case is a typical example of Beijing Intellectual Property Court’s active implementation of the innovation-driven development strategy based on the judicial practice of the pharmaceutical and healthcare industry. For the inventiveness judgment of drug-related patents, within the framework of the current rules system, it is necessary to comprehensively consider the relationship between marketed drugs and technical effects, fully protecting the interests of patent holders. The specific judicial rules of this case are helpful to promote the continuous innovation and development of the pharmaceutical industry, thus providing judicial support for ensuring the accessibility of medicines for the people and promoting the implementation of the Healthy China Strategy.
Case Ⅲ: Administrative Litigation Case Involving Invalidation of the “Dou Hai Yin” Trademark Right——Recognizing the Core Service Trademark of XX Internet Platform Enterprise as Well-Known1. Case InformationPlaintiff: Beijing XX Network Technology Co., Ltd. (hereinafter referred to as “XX Network Company”)Defendant: National Intellectual Property AdministrationThird Party: Shanghai XX Technology Co., Ltd. (hereinafter referred to as “XX Technology Company”)2. Basic FactsXX Technology Company applied for registration of the trademark “Dou Hai Yin” on August 31, 2018, which was approved for use in Class 39 services including “travel reservations.” On January 4, 2022, XX Network Company filed an invalidation request on the grounds that the disputed trademark violated Article 13 of the Trademark Law of the People’s Republic of China (prohibition against imitation of well-known trademarks). The National Intellectual Property Administration reviewed the case and determined that the “Dou Yin” trademark claimed by XX Network Company has a short period of use and insufficient evidence to prove it had achieved well-known status. It thus ruled to maintain the disputed trademark. XX Network Company refused to accept the ruling and filed an administrative lawsuit with the Beijing Intellectual Property Court. The court held in its first-instance judgment that although the “Dou Yin” trademark had been used for less than two years before the application date of the disputed trademark, the Dou Yin App had experienced explosive growth with short videos and social platforms as the core business since its launch in September 2016. By June 2018, it had become the top domestic short-video platform with a market penetration rate of 29.8%, reached over 500 million monthly active users (MAU) by July 2018, and accumulated over 3.1 billion total downloads by September 2018. In this case, XX Technology Company used promotional slogans such as “Check-in with Dou Yin,” demonstrating obviously malicious intent to free-ride on XX Network Company’s goodwill. So the “Dou Hai Yin” trademark should be deemed an imitation of “Dou Yin,” violating paragraph 3 of Article 13 of the Trademark Law. The Beijing Intellectual Property Court revoked the administrative ruling. The National Intellectual Property Administration filed an appeal against the decision, and the Beijing High People’s Court issued a final judgment rejecting the appeal and upholding the original judgment.3. Judgment GistWhen determining whether a trademark in the internet sector has achieved well-known status, courts must fully consider the internet industry’s unique characteristics and comprehensively assess factors such as the actual use effects of the trademark, market coverage, user growth rate, and other multidimensional criteria to evaluate whether the trademark meets the standard of being “widely recognized by the relevant public.”4. Typical SignificanceThe platform economy has emerged as a pivotal engine driving the digital transformation of the real economy and unleashing new-quality productive forces. Platform enterprises rapidly accumulate market reputation through technological innovation and business model updates, with their highly influential brand value in particular becoming a core competitiveness driving innovative development. As the trademark of these enterprises hold enormous commercial value, the more well-known a trademark becomes, the more likely it is to be targeted for malicious registration or free-riding.In China’s trademark registration system, protection for registered trademarks is confined to identical or similar goods/services. To combat cross-class malicious registrations, rights holders must prove their trademark has achieved “ wide recognition by the relevant public” to obtain cross-class protection for a well-known trademark. A well-known trademark, as the highest embodiment of corporate goodwill, represents consumers’ utmost trust in product quality and service standards—it is not merely an honorary title. In judicial practice, courts apply the principles of “ case-by-case determination” “passive protection” and “ protection as needed” to dynamically examine well-known trademark recognition. This approach balances precise strikes against cross-class bad-faith registrations with avoiding over-expansion of protection that could stifle market innovation. This case establishes adjudication rules for the recognition and protection of well-known trademarks in the internet sector:First, Significantly Shortening the Traditional Time-in-Use Requirement for Well-Known Status. Under the Provisions on the Recognition and Protection of Well-Known Trademarks issued by the former State Administration for Industry and Commerce, evidence proving a registered trademark’s well-known status must demonstrate at least three years of registration or five years of continuous use. In this case, the National Intellectual Property Administration initially denied recognition primarily because the “Dou Yin” trademark had been in use for a short period before the disputed trademark’s application. The judgment of this case which is based on the trademark law and judicial interpretations pointed out that with the innovative advantages of short video content distribution and algorithmic recommendation mechanism, Dou Yin APP has shown exponential growth in users and downloads in a short period of time, and rapidly accumulated a wide user base and market influence, and the cycle of its trademark popularity formation has been significantly shortened. If the traditional length-of-use requirement of the recognition standard is applied mechanically, it will be inconsistent with the development law of the Internet industry and the actual influence of the trademark.Second, Deepening Analysis of Well-Known Status Recognition in the Traffic Era. With the popularization of the Internet, short videos, artificial intelligence and other technologies, it has become a common business model for merchants to obtain economic benefits by attracting public attention. This case combines the characteristics of the “attention economy” of the Internet with an in-depth analysis of the considerations for the determination of well-known trademarks as stipulated in Article 14, Paragraph 1 of the Trademark Law of the People’s Republic of China. Beijing Intellectual Property Court holds that important indicators with the characteristics of the internet industry, such as the number of daily and monthly active users, average online duration, and market penetration rate, should be used as the basis for determining “the degree of recognition among relevant public.” Taking into account the characteristics of the internet environment, such as fast information dissemination, wide reach, tendency for explosive growth, and the common revenue model in the internet industry where users are acquired for free and income is generated through advertising and other means, the Court will assess adjudication factors such as “duration of continuous use” and “promotional efforts.”Third, Reasonably Defining the Scope of Protection for Internet Well-Known Trademarks. In this case, XX technology company, as an Internet practitioner providing travel information and other services through the Internet platform, used the trademark “Dou Hai Yin”with obvious intention of imitating and climbing, objectively weakened the identification function of the company’s trademark “Dou Yin”, improperly seized the goodwill resources legally accumulated by others, and constituted a substantial damage to the rights and interests of well-known trademarks. Therefore, it was determined that the trademark of the platform Company has reached the status of well-known, and the cross-class protection was in line with the principle of case-by-case and on-demand determination.This case provides clear judicial guidance for recognizing well-known trademarks in the internet sector, demonstrating courts’ firm support for the healthy development of high-value brands. By reasonably defining the boundaries of well-known trademark protection and regulating competition in the digital economy, it also guides platform enterprises and tech innovators to enhance trademark strategy and protection awareness, offering tangible judicial safeguards for high-quality development of new productive forces.
Case Ⅳ: Trademark Infringement and Unfair Competition Dispute Involving the “Lao Ban” Mark— Crackdown on Full-Chain Counterfeit Trademark Infringement1.Case InformationPlaintiff: Hangzhou X Electric Co., Ltd. (hereinafter referred to as “X Electric Company”)Defendants: Chaozhou X Ceramics Factory (hereinafter referred to as “X Ceramics Factory”), Chaozhou X Intelligent Technology Co., Ltd. (hereinafter referred to as “X Tech Company”), Lü X, Chen X, and Wu X2.Basic FactsThe plaintiff, X Electric Company, is the exclusive owner of the registered trademark “Lao Ban”, which is approved for use on Class 11 goods including kitchen range hoods. The five defendants, via multiple business entities including X Ceramics Factory (a sole proprietorship operated by Chen X), X Tech Company (jointly held by the married couple Lü X and Wu X), with other entities such as a Guangdong-based kitchen and bath company (which was suggested to be deregistered during litigation) and a Hong Kong-registered company solely directed by Lü X and in their individual capacities, used the marks “Lao Ban” “LAOBAN WEIYU” and “www.LAOBAN WEIYU.net” on sanitary ware products such as toilets, showers, and sinks. Meanwhile, the Defendants repeatedly used the term “Lao Ban” in their company names, personal or corporate account names, and store names. The plaintiff alleged that the collective actions of the five defendants infringed its exclusive trademark rights and constituted acts of unfair competition. Accordingly, it sought injunctive relief and joint compensation of RMB 5 million for economic losses and RMB 290,000 for reasonable expenses. Upon trial, Beijing Intellectual Property Court found that the five defendants had engaged in trademark infringement and unfair competition, and ordered them to cease the infringing activities and jointly pay the plaintiff RMB 5 million in damages and RMB 150,000 in reasonable costs.The defendants appealed, but Beijing High People’s Court dismissed the appeal and upheld the original judgment.3.Judgment GistWhere a company shareholder deregisters a company during litigation without legally liquidating it and has made relevant commitments at the time of deregistration, the shareholder shall bear corresponding legal liability for the company’s pre-deregistration acts of infringement.If a company committing the infringement was jointly funded by a married couple during their marriage, and no proof or agreement of property division exists between them, the company’s ownership may be deemed substantively unified. Accordingly, in line with rules applicable to single-member limited liability companies, the shareholder couple may be held jointly liable with the company for the infringement-related debts.4.Typical SignificanceAs a core intellectual property asset of a business, a trademark symbolizes its market competitiveness and serves as a vital tool for distinguishing the source of goods and services, building commercial reputation, and establishing brand recognition among consumers. The protection of trademark rights lies at the heart of China’s Trademark Law and is a key aspect of intellectual property protection. It plays a critical role in fostering a sound business environment and safeguarding fair market competition. Beijing Intellectual Property Court has jurisdiction over first-instance civil cases involving the recognition of well-known trademarks within Beijing, as well as other second-instance civil trademark cases. Since its establishment, the court has adjudicated over 3,200 first- and second-instance trademark infringement cases. In adjudicating such cases, the Court has consistently applied trademark laws and judicial interpretations with rigor and accuracy, distilled judicial principles from individual cases and unified standards of adjudication, adhering firmly to the principle of “strict protection” and continuously strengthening judicial safeguards for trademark rights.The development of new technologies and new business models has posed challenges to the legal system for trademark protection. Especially in the context of the digital economy and the diversification of commercial entities, the hidden and interconnected characteristics of trademark infringement subjects have become increasingly prominent. How to correctly understand the legislative intent and legal provisions, accurately identify trademark infringement behaviors that involve novel forms and complex associations, and ensure that all types of entities maliciously engaging in infringement along the entire chain bear corresponding legal liabilities—so as to create an effective deterrent against trademark infringement—is a critical issue worthy of attention and study in the adjudication of such cases. In this respect, the present case has made a valuable exploration and provides effective solutions to difficult judicial issues such as the determination of joint infringement and the attribution of infringement liability in trademark disputes.Based on the correct identification of the trademark infringement act, the judgment in this case adopts a penetrating adjudication approach, and employs a combination of institutional measures such as piercing the veil of shareholder liability and expanding joint and several liability. These measures significantly increase the cost of trademark infringement and effectively curb full-chain infringement behaviors that exploit legal loopholes to construct “firewalls” of liability, thus preventing infringers from concealing their identity and escaping responsibility.This case made meaningful breakthroughs in the following aspects and provided substantive guidance for resolving complex issues in trademark infringement disputes.Firstly, Piercing the Corporate Veil to Address “Shell Company” Infringement. According to the basic theory of company law, each shareholder of a limited liability company shall be liable for the company to the extent of the capital contribution subscribed for by it. In intellectual property infringement lawsuits, including those involving trademark infringement, an increasing number of infringing parties have used this fundamental principle of company law as a shield to evade liability by establishing companies—sometimes even cross-border or across different jurisdictions—they provide a “legal shell” for actual infringers to escape liability. The judgment in this case creatively applies Article 20 of the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of the Company Law of the People’s Republic of China (II) to clearly define the scope of liability borne by shareholders who carry out simplified deregistration of a company without liquidation during the course of litigation. During the proceedings of this case, Chen X and Wu X, the shareholders of a Guangdong-based kitchen and bath company, implemented a simplified deregistration. Although formally extinguished the company’s legal status, the judgment pierced the corporate veil by examining the correlation between the shareholders’ signed commitment letters and their undertakings to assume debt liability, thereby holding the shareholders accountable. This effectively curbed the malpractice of actual infringers maliciously deregistering companies to avoid debts, and imposed punishment on infringing acts that exploit the formation and unlawful deregistration of companies to achieve a “getaway” from liability.Secondly, establishing a judicial standard of recognizing spouse-owned companies as sole proprietorships and refining the evidentiary rules for asset commingling. When determining the liability of the defendant, the Tech Company, the court went beyond the literal interpretation of Article 63 of the Company Law of the People’s Republic of China (2018 Amendment), and, in light of the joint shareholding by the spouses and the absence of any property division, held that the entirety of the company’s equity essentially derived from a single property interest, which was jointly owned and exercised as a single property right, with the equity interest exhibiting substantive unity and alignment of economic interests, thereby construing the company as a de facto single-shareholder limited liability company, and, pursuant to the principle of asset commingling, imposed joint and several liability on both spouses—the two shareholders—for the infringing acts committed by the company. This judgment established a judicial review standard that infers asset commingling from the common origin of shareholding, thereby effectively curbing infringing conduct that seeks to evade legal liability through intricate equity structures.Thirdly, establishing a framework for joint liability among related entities to crack down on industrial-scale infringement. In response to the coordinated infringing acts conducted by five defendants across different regions and legal entities, the case adopted a comprehensive adjudicative approach combining “behavioral relevance” and “concerted intention,” which involved examining factual elements such as cross-shareholding among the entities and shared trademark usage, and further relied on evidentiary chains including trademark licensing arrangements and coordinated online-offline sales activities among the defendants, to ascertain their shared intent to commit joint infringement. The adjudicative reasoning provides valuable guidance in resolving the complex issue of establishing joint infringement across a fragmented chain of “manufacturing–sales–brand operation.”This judgment systematically applied a multi-dimensional set of legal instruments, including the Company Law, Trademark Law, and the Civil Code, and achieved three major breakthroughs in the judicial determination of trademark infringement subjects: a shift from reviewing individual entities to examining related parties, an elevation from formal compliance assessment to substantive illegality determination, and an evolution from imposing individual liability to regulating joint and several liability. This innovation in adjudicative philosophy not only enhances the judicial protection of trademark rights, but also serves as a paradigm for establishing a robust regime of strict intellectual property protection.
Case V : Copyright Infringement Dispute involving over a hundred paintings that allegedly plagiarized works including Fallen Leaves.——Determination of Copyright Infringement of Artworks1. Case InformationAppellant (the defendant in the first instance): Ye XXAppellee (the plaintiff in the first instance): Xi XX2.Basic FactsThe Plaintiff Xi XX, a Belgian painter, alleged that the Defendant Ye XX had plagiarized over a hundred paintings created since 1993 over a span of 25 years, including artworks such as Fallen Leaves to which the Plaintiff held copyright. The Beijing Intellectual Property Court, after conducting a holistic comparison of the accused infringing paintings with the 13 copyrighted artworks involved in the case, along with comparative analyses of partial element combinations and individual element analyses, concluded that the 122 accused infringing paintings exhibited substantial similarity to the 13 copyrighted artworks in terms of visual artistic effects. Consequently, the court ruled that Ye XX’s acts of creating, publishing, and auctioning the disputed paintings infringed Xi XX’s exclusive rights to the 13 copyrighted artworks, including reproduction rights, modification rights, attribution rights, and distribution rights. Accordingly, the Beijing Intellectual Property Court ordered Ye XX to cease the infringement, make a public apology, rectify adverse effects, and compensate for economic losses amounting to 5 million RMB yuan. Ye XX filed an appeal, but the Beijing High People’s Court dismissed the appeal and upheld the original judgement.3.Judgment GistTo determine whether a work of art constitutes substantial similarity, it is generally assessed through a holistic examination and comprehensive evaluation of the artistic expression embodied in the work. This process focuses on visual characteristics such as constituent elements, specific expressions and the overall visual effect, which collectively define the work’s creative manifestation. If the differences between two artworks are merely minor in their entirety to the extent that an ordinary observer would tend to overlook such distinctions unless intentionally searching for them, such works may be deemed substantially similar.When a large number of copyrighted works and allegedly infringing works are involved in the comparison, all works under dispute should be considered holistically. Meanwhile, factors such as the author’s creative history, methods, and style should be comprehensively evaluated to determine of the extent of infringement, which serves as the basis for establishing the standards for damages compensation.4. Typical SignificanceArtworks carry the cultural connotations and artistic styles of a specific era and are an important component of the cultural industry. Protecting the copyright of artworks not only safeguards and inspires creators but also is of significant importance for promoting the standardized development of the cultural and artistic sector and enhancing a nation’s cultural soft power. This case is a typical copyright infringement case which clarifies two aspects of judicial rules: Ideas and expressions in artworks should be distinguished based on creative principles and characteristics, and judgment of substantial similarity should take into account the visual imagery characteristics of artworks.First, considerations regarding the differentiation between ideas and expressions in artworks.
The first consideration is the creative principles of artworks. The creative process of artworks is a gradual process of transforming ideas into expressions. Before the final completion of artworks, authors typically engage in ideational activities such as material collection and creative conceptualization. These mental processes generally extend from before the initiation of the creative act through the entire creative journey, encompassing the author’s subjective observations of specific objects, social phenomena, and personal life experiences, as well as their individual perspectives and emotional insights. Additionally, the final artistic outcome is closely intertwined with the author’s technical proficiency, artistic vision, and aesthetic sensibilities. Through external expressions in specific forms, the author finalizes and publicizes the aesthetic imagery within their consciousness, enabling others to appreciate, evaluate, and understand their artistic attainments and aesthetic preferences through the medium of the artwork. Objectively, this process also defines the scope of expressions protected by copyright.The characteristics of artworks should also be considered. According to the definition in the Implementing Regulations of the Copyright Law, the expression of an artwork primarily lies in the artistic representation objectively presented through the organic integration of aesthetic elements such as composition, lines, colors, and forms. The artistic image of an artwork is manifested as a visual image, characterized by visual immediacy, definiteness, and visibility. Copyright protection for artistic works focuses more on the external form of expression rather than the specific depicted content, which distinguishes it significantly from the protection of literary works that places greater emphasis on the substantive written content.Second, the criteria for determining substantial similarity between artworks.In copyright infringement disputes involving artworks, determining whether there is substantial similarity between the allegedly infringing works and the copyrighted works should involve comparing whether the choices, selections,arrangements, and designs made by the author in the expression of the artworks are the same or similar. As previously mentioned, artistic works are a form of visual art, and thus the external form of expression they embody constitutes the essence of their value. While different types of artistic works may cater to audiences with varying characteristics and levels of appreciation, once an artwork is publicly disclosed, it primarily targets the general public for appreciation and evaluation.Therefore, the determination of whether two artistic works constitute substantial similarity should be based on the perspective of ordinary observers. This involves a holistic assessment and comprehensive judgment of the visual characteristics of both the copyrighted artwork and the allegedly infringing artwork. If the two works only exhibit minor differences in details that would only be noticeable to ordinary observers through deliberate searching and comparison, then it can be concluded that the works constitute substantial similarity.After the judgment took effect, the defendant voluntarily issued a public apology in Legal Daily, a Chinese newspaper, marking the resolution of a five-year, cross-border copyright dispute over artistic works. The judgment undertook a total of 303 comparative analyses between over 100 allegedly infringing artworks and the copyrighted works, examining them across multiple dimensions including compositional elements, modes of expression, and overall aesthetic effect, ensuring no detail was overlooked. On this foundation, the court conducted a comprehensive assessment of potential infringement by integrating factors such as the author’s creative history, methodologies, and stylistic idiosyncrasies. Through this process, it fastidiously demarcated the boundary between permissible artistic reference and infringing plagiarism in artworks. The judgment ultimately safeguarded the copyright rights of the Belgian artist in strict accordance with legal provisions. While providing valuable guidance for the adjudication of similar cases, the judgment also demonstrates a judicial stance of equal protection for the lawful rights and interests of foreign entities, thereby conveying the spirit of justice, transparency, and openness inherent in the rule of law.
Case VI: The First Case on Administrative litigation Involving Anti-Monopoly Review of Concentrations Between Undertakings——First Judicial Clarification of Concentrations Between Undertakings Review Standards
[Omitted]
Case VII: The First Case Involving Validity Confirmation of Data Intellectual Property Registration Certificates in an Anti-Unfair Competition Dispute——First Judicial Recognition of the Legal Effect of a Data Intellectual Property Registration Certificate1. Case InformationAppellant (Defendant in the First Instance): Yin X (Shanghai) Technology Co., Ltd. (hereinafter referred to as Yin X Company)Appellee (Plaintiff in the First Instance): Shu X (Beijing) Technology Co., Ltd. (hereinafter referred to as Shu X Company)2. Basic FactsShu X Company, having lawfully obtained authorization, collected a Mandarin Chinese speech dataset totaling 1,505 hours and registered it with a Data Intellectual Property Registration Certificate. Shu X Company sued Yin X Company for providing a 200-hour subset of this dataset without permission, alleging infringement of data property rights, copyright, trade secrets, and unfair competition, and sought damages of over RMB 700,000 yuan. The court of first instance ruled that the dataset constituted a trade secret and found Yin X Company liable for disclosing and using it unlawfully, ordering compensation of 102,300 RMB.Yin X Company appealed, arguing that the dataset had been open-sourced before the alleged conduct occurred and therefore lacked secrecy, which did not qualify as a compilation due to lack of originality, and the alleged conduct did not constitute unfair competition. The Beijing Intellectual Property Court, on appeal, held that the Data Intellectual Property Registration Certificate could serve as preliminary evidence of Shu X Company’s lawful acquisition and property interest in the dataset. However, since the dataset was publicly available, it did not meet the criteria for trade secret protection. Furthermore, the dataset’s selection and arrangement lacked originality and did not constitute a compilation.Nonetheless, Shu X Hui X Company invested significant technology, capital, and labor in collecting and organizing the data, resulting in commercially valuable entries that conferred competitive advantages and business opportunities. These interests deserved protection under the Anti-Unfair Competition Law. Yin X Company failed to follow the terms of the open-source license, violated commercial ethics, harmed Shu X Company ’ s interests and the competitive market order, and thereby committed an act of unfair competition under Article 2 of the Anti-Unfair Competition Law. The appellate court corrected the erroneous finding on trade secrets but upheld the lower court ’ s compensation ruling and dismissed the appeal.3.Judgement GistThe Data Intellectual Property Registration Certificate may serve as preliminary evidence of a data holder’s proprietary interest in the dataset and of the dataset’s lawful origin and collection. Without the data holder’s consent, no party may publicly disseminate a dataset lawfully and substantially collected by the holder. Where a data holder has open-sourced a dataset, whether a user complies with the license terms is a critical factor in assessing whether the use violates commercial ethics in the data services field.If the dataset is publicly available and features original selection or arrangement of content, it is preferably protected as a compilation under copyright law. If the dataset is not readily accessible to those in the relevant field, it may be protected as a trade secret. If the dataset is public and lacks originality in its selection or arrangement, it does not qualify for copyright or trade secret protection, but may be protected under Article 2 of the Anti-Unfair Competition Law depending on the circumstances.4.Typical SignificanceAs the digital economy becomes deeply integrated into production and daily life, data is increasingly recognized as a core production factor. Efficient circulation and secure protection of data are crucial for stimulating market innovation. The data registration system, by standardizing the registration of rights related to data ownership, processing, and commercialization, lays the groundwork for the market-based allocation of data resources. On one hand, it uses public disclosure and credibility mechanisms to clarify rights boundaries, reduce verification costs and legal risks in data transactions, and provide a “base map ” for cross-industry and cross-regional data flows. On the other, it recognizes and protects legitimate input by data processors, incentivizing real innovation in data collection, cleaning, and labeling, thereby promoting the transformation of data from a “resource” into an “asset.” This case is the first in China to examine the legal effect of a Data Intellectual Property Registration Certificate. The appellate judgment, guided by the policy directive in the “Opinions of the CPC Central Committee and the State Council on Establishing a Data Infrastructure System to Better Leverage the Role of Data as a Production Factor ” (the “ 20 Measures on Data ” ), which calls for “ exploring new approaches to data property rights registration,” responds to the regulatory needs of the data registration regime through judicial innovation, establishing a legal foundation for the healthy development of the data element market.In recent years, the Beijing Intellectual Property Court has handled a diverse and technically complex range of data rights cases, 95% of which involved unfair competition, covering emerging disputes like data scraping, trade secret protection, and open-source data and involving AI training datasets and speech datasets. The appellate ruling in this case establishes rules for judicial protection of data rights, especially in clearly defining the legal effect of registration certificates and guiding corporate data protection strategies.First, it affirms the preliminary evidentiary effect of Data Intellectual Property Registration Certificates. Such certificates can initially prove lawful possession and source legitimacy, unless rebutted by contrary evidence. However, this recognition must be understood in three ways: (1) the certificate’s effect is case-specific and rebuttable; (2) its weight depends on the registration agency’s qualifications, review standards, and content; and (3) data holders may assert rights by other means even without registration. This balanced approach both affirms the role of registration and preserves judicial restraint.Second, it establishes a tiered path for protecting enterprise data rights based on the dataset ’ s legal nature. Datasets with original selection or arrangement are protected by copyright law; non-public datasets meeting trade secret criteria fall under relevant unfair competition provisions; and public datasets lacking originality but involving substantial input may be protected under Article 2 of the Anti-Unfair Competition Law. In this case, although the dataset did not qualify as a trade secret due to its public nature, the court recognized Shu X Company’s lawful investment and certificate-based proof, and penalized Yin X Company’s breach of the open-source license under the unfair competition framework, establishing boundaries for “ethical use and respect for prior investment” in the use of public data.Third, it strengthens regulatory constraints on the circulation of open-source data. The ruling explicitly states for the first time that users must strictly comply with open-source license terms, and unlicensed commercial use constitutes unfair competition. This rule addresses the tension between free use and rights protection in an open-source context and establishes clear expectations for enterprises to unlock data value through open-source licenses by affirming that legitimate open-sourcing does not equate to relinquishing rights, while emphasizing that unauthorized commercial exploitation in violation of the agreement terms will still incur legal liability.This case marks a transition in China toward coordinated governance through data rights registration and judicial protection. It provides clear behavioral guidance for data processors and signals to the market that the development and utilization of data must occur within the rule of law. Legitimate rights are protected, and violations carry consequences. With continued accumulation of such judicial principles, China’s data element market is poised to develop into a legally regulated environment where “ registration has standards, transactions have legal grounds, and disputes have solutions,” laying a strong foundation for high-quality growth in the digital economy.
Case VIII: “FL218” Corn Plant Variety Right Invalidity Administrative Dispute——Clarifying Novelty, Specificity Standards and Burden of Proof in Plant Variety Invalidity Procedures1. Case InformationPlaintiff: Hui X Seed Industry Co., Ltd. Of ZunYi city, GuiZhou Province. (hereinafter referred to as Hui X Company）Defendant: The Reexamination Board for New Varieties of Plants, Ministry of Agriculture and Rural Affairs (hereinafter referred to as The Reexamination Board for New Varieties of Plants)Third Party: Hubei Kang X Seed Industry Co., Ltd.2. Basic FactsThe disputed variety in this case is a new corn variety named “FL218” for which Company K holds the plant variety rights. Hui X Company filed a request for invalidation with the Reexamination Board for New Varieties of Plants, which made the decision to maintain the validity of the disputed plant variety right. Hui X Company disagreed and filed an administrative lawsuit with the Beijing Intellectual Property Court, arguing that the disputed variety is the same as the parent varieties of several approved corn varieties, such as “Eyu 16” and that prior to the application date, the disputed variety had already been widely produced and sold, and was used as a parent to breed other corn varieties. The other varieties bred from it were also widely produced and sold, thus the involved variety had lost its distinctness and novelty, therefore the decision was incorrect. Furthermore, the Reexamination Board for New Varieties of Plants did not accept Hui X Company’s application to identify that the disputed variety and other varieties ’ parent plants were the same variety, claiming procedural violations. After hearing the case, the Beijing Intellectual Property Court found that the procedures were not improper, and the conclusion of the decision was correct, thus dismissing Hui X Company ’ s claim. Hui X Company appealed, and the Supreme People’s Court made a final ruling, dismissed the appeal and upheld the original judgment.3. Judgement GistThe examination of the novelty of a new plant variety involves determining whether the variety was sold or promoted prior to the application date. The act of using a variety as a parent to breed hybrids does not constitute commercialization. Furthermore, commercialization activities pertain to the protected variety itself, not to hybrids bred using that variety as a parent. Therefore, the sale of hybrids, in principle, cannot be regarded as the sale of the parent variety.The examination of distinctness for a new plant variety determines whether the variety is clearly distinguishable from known varieties. In invalidation proceedings for plant variety rights, the invalidation petitioner bears the burden of proof regarding the existence of clear distinctness, and the Reexamination Board for New Varieties of Plants is not obligated to conduct investigations.4. Typical SignificanceSeeds are the “ chips ” of agriculture, and the seed industry is a core national industry that plays a crucial role in agricultural stability and national food security. Intellectual property protection in the seed industry is vital for its revitalization and prosperity, and it is an indispensable part of the intellectual property protection system. Plant variety rights, as a major component of intellectual property rights in the seed industry, focus on the protection of reproductive materials, namely seeds. It has been proven that granting exclusive rights to seeds that are clearly distinguishable from other known varieties and have not been sold or promoted before the application date—thus possessing the characteristics of specificity and novelty as stipulated in the Seed Law of the People’s Republic of China — strengthens intellectual property protection for plant varieties, providing breeders with a fair economic return for their innovative contributions. This, in turn, effectively increases breeding activity and encourages breeding innovation.In the legal system governing plant variety rights, the authorization and invalidity review of plant variety rights are key procedures. The Reexamination Board for New Varieties of Plants is the administrative authority responsible for conducting these reviews. Whether the variety applicant, the variety right holder, or the party petitioning for invalidation of the plant variety right, all may file an administrative lawsuit with the Beijing Intellectual Property Court if they are dissatisfied with the decisions made by the Reexamination Board for New Varieties of Plants.The Beijing Intellectual Property Court, as the exclusive court with nationwide jurisdiction over this type of special and “ niche ” intellectual property administrative dispute, has established a multi-disciplinary technical fact-finding mechanism led by academicians from agricultural science institutions, and a specialized review system for seed industry cases. By leveraging the advantages of a specialized court, the court actively explores a judicial protection model for intellectual property in the seed industry that aligns with its unique characteristics, having heard a number of landmark administrative cases regarding plant variety right authorization and confirmation. This case is a typical example, and the judgment provides clear guidance on the standards for assessing novelty and specificity of plant varieties and the burden of proof in the plant variety invalidity process.Unlike the novelty requirement for patents, there is only one way to destroy the novelty of a new plant variety, namely through public sale or promotion in the market. This judgment starts from the intrinsic meaning of the novelty characteristic of new plant varieties and strictly adheres to the provisions of the Seed Law of the People’s Republic of China and the Regulations on the Protection of New Plant Varieties of the People’s Republic of China. It clarifies that sales and promotional activities should be accurately understood as actions that enable relevant technicians to obtain propagating materials in the market. The act of using propagating materials as parent plants to breed other hybrid varieties should not be broadly interpreted as sales or promotional activities. Furthermore, the sales or promotional activities that undermine novelty only apply to the protected variety itself, not to hybrid varieties bred using it as a parent.The “clear distinction” of a new plant variety from known varieties constitutes its distinctness. This distinctness must be scientifically demonstrated through field trial results. In this ruling, the court carefully examined the methods for proving distinctness, including the requirement to submit field test reports when applying for variety rights. It clarified that in invalidation proceedings, the party seeking invalidation bears the burden of proving that the disputed plant variety lacks distinctness, while the administrative authority is not obligated to conduct its own investigations. Simply requesting a field examination from the Plant Variety Review Board does not fulfill this burden of proof. By clarifying the allocation of the burden of proof, this decision helps standardize the review process for plant variety right invalidations.This judgment also serves as a reminder to industry participants that they must accurately understand the legal system surrounding plant variety protection. While legally protecting their innovative crops and commercial outcomes, they must also properly utilize the plant variety invalidity procedure, actively fulfilling their burden of proof, and discharging their evidentiary obligations in accordance with the law. This will help resolve disputes amicably and maintain the effective operation of the plant variety protection system, promoting the high-quality development of China’s seed industry and ensuring that the Chinese people always keep our food security firmly in our own hands.