403 Forbidden

By Lijian DU

Introduction

On April 24, 2026, the Intellectual Property Tribunal of the Supreme People’s Court issued a final judgment in the “Unitree Robot Dog” case. (2026) SPC Zhi Min Zhong 96). The court explicitly ruled that a patentee filing a patent infringement lawsuit against a competitor during critical regulatory inquiry and prospectus update stages of the competitor’s IPO constitutes malicious litigation. This judgment further clarifies the adjudication logic of Chinese courts in identifying “malicious litigation.” Although this judgment is not a guiding case, its reasoning holds significant reference value for courts at all levels in adjudicating similar cases. Furthermore, it provides clear compliance guidelines for market entities in intellectual property rights (IPR) enforcement and defense.

Key Elements for Identifying Malicious Litigation

Synthesizing the “Unitree Robot Dog” case and previous typical cases (such as “Target Flowmeter” utility model patent, (2022) SPC Zhi Min Zhong 1861, and “Mixing Device” utility model patent, (2023) SPC Zhi Min Zhong 2044), Chinese courts focus on reviewing the following four core elements when determining whether malicious litigation exists:

1. Whether the Litigation Manifestly Lacks a Rights Basis or Factual Grounds

If a patent right has been declared invalid, or if litigation is filed while fully aware that the patent right has terminated due to non-payment of annual fees, or while aware of prior art that affects its validity, such actions will serve as important considerations for identifying malicious litigation. In the “Unitree Robot Dog” case, the court found that the technical features in the plaintiff’s patent claims (e.g., “bionic fur”) manifestly failed to cover the technical solution of the accused product, representing a typical lack of factual basis.

2. Whether the Rights Holder Exhibits Subjective Fault

The determination of subjective fault is primarily conducted from two perspectives:

1. Awareness of Defects in the Rights Basis: This includes concealing evidence that is disadvantageous to oneself. For example, in the “Mixing Device” case, the rights holder deliberately failed to submit an obtained negative patent right evaluation report.
2. Presumption of Improper Litigation Purposes: This includes repeatedly filing lawsuits after knowing that infringement is not established (e.g., in the “Target Flowmeter” case, the patentee filed two lawsuits even after the patent had expired); maliciously targeting competitors by deliberately initiating litigation during commercial critical junctures, such as IPO regulatory inquiries or prospectus updates, to exert pressure; and applying for property preservation measures that are manifestly disproportionate to the profits gained from infringement (e.g., freezing amounts far exceeding a reasonable scope).
3. Whether Damage Has Been Caused to Others

The resulting damages primarily include: losses incurred from capital occupation due to property preservation; business opportunities actively abandoned to circumvent legal risks; losses caused by delaying the company’s listing process; and reasonable expenses incurred in responding to the litigation.

4. Whether a Causal Relationship Exists Between the Litigation Conduct and the Damages

The court must strictly review whether a direct legal causal relationship exists between the rights holder’s improper litigation conduct and the actual damages suffered by the victim.

Practical Strategies for Enterprises

Based on the aforementioned judicial identification standards, enterprises should adopt more prudent and professional strategies when engaging in patent enforcement and defense:

(I) As a Potential Patentee (Enforcing Party): Avoid Crossing the “Malicious” Red Line

1. Conduct Pre-litigation Stability Assessments: Before filing a lawsuit, especially for patents that have not undergone substantive examination (such as utility models and design patents), a comprehensive stability assessment should be conducted. Deliberately concealing a negative conclusion in an evaluation report will serve as direct evidence of “bad faith.”
2. Prudently Select the Timing of Litigation: If a competitor is in a commercially sensitive period, such as an IPO, refinancing, or bidding for major contracts, the patentee must thoroughly verify their own patent rights basis and the factual comparison of product infringement before filing. Litigation lacking a rights or factual basis is highly susceptible to counterclaims for damages due to malicious litigation.
3. Ensure Proportionality in Preservation Applications: The amount requested for property preservation should be roughly commensurate with the estimated profits from infringement or reasonable licensing fees. Manifestly excessive seizures must be strictly avoided.

(II) As a Potential Accused Infringer (Defending Party): Proactively Utilize Counterclaim Tools

1. Timely Filing of Counterclaims: If served with litigation that manifestly lacks a factual basis and is initiated during a commercially sensitive period, the defending party may immediately file a counterclaim for “liability for damages caused by malicious filing of intellectual property litigation” within the main proceedings, seeking compensation for attorney’s fees, damage to commercial reputation, and commercial losses caused by IPO delays incurred in responding to the lawsuit.
2. Actively Raise Objections to Preservation: If the opposing party applies for manifestly excessive property preservation, the defending party should immediately raise an objection to the preservation with the court in accordance with the relevant provisions of the Civil Procedure Law and apply to lift the excessively frozen portion.
3. Comprehensively Preserve the Chain of Evidence: Properly retain records of one’s own business activities around the time the opposing party filed the lawsuit (e.g., financing progress, IPO tutoring materials, dates of signing major contracts) to prove the causal relationship between the “abnormality” of the opposing party’s timing of litigation and the resulting damages.