Combating malicious IP litigation in China

A Supreme Court decision finding that the plaintiff acted contrary to good faith signals the country’s tougher stance on the abuse of IP rights, says Xiaojun Guo of CCPIT Patent and Trademark Law Office.

On April 7, 2026, the Supreme People’s Court of China promulgated the revised Interpretation on the Application of Punitive Damages in the Trial of Civil Disputes Involving Intellectual Property Infringement. The revised Interpretation took effect on May 1, 2026, and repealed the 2021 version.

This reaffirms China’s commitment to strengthening IP protection. In parallel with this, the court has turned its attention to curbing the abuse of IP rights and has issued benchmark cases targeting malicious litigation, since adding malicious IP litigation as a separate cause of action in 2011.

In Case No. 96 rendered on April, the IP Court of the Supreme Court demonstrated its firm stance against malicious litigation by applying a multi-factor test.

Brief of Case No. 96

The plaintiff (appellant) sued the defendant (appellee) over its Go2 robot dog for patent infringement, and lost at both first instance (Case No. 79) and second instance (Case No. 756).

Shortly after suing the defendant over its Go2 robot dog, the plaintiff sued the defendant over its A2 robot dog for patent infringement. After losing at first instance (Case No. 113), the plaintiff appealed to the IP Court of the Supreme Court (the present Case No. 96). The defendant counterclaimed for malicious litigation and sought damages in the two cases. One of the key issues in dispute was whether the plaintiff acted maliciously. In determining this, the IP Court of the Supreme Court cited Guiding Case No. 278 as precedent and applied a multi-factor test.

Multi-factor test

In Guiding Case No. 278, the IP Court of the Supreme Court held that initiating a patent suit while knowing the claims lack any legal or factual basis constitutes malicious litigation and abuse of rights.

In the present case, the court further elaborated that, to determine whether malicious litigation exists, a court shall systematically assess all relevant factors, integrating subjective intent and objective conduct, taking into account factors before and during the litigation, and considering circumstances both inside and outside the proceedings.

In addition to examining whether the litigation lacks a legal or factual basis, the court shall comprehensively evaluate factors such as the rights holder’s claims, the timing of initiating the litigation, litigation risks and strategy, and the degree of imbalance of interests caused to the parties, among other things.

In general, priority shall be given to four factors: (a) whether the action is manifestly devoid of legal or factual basis; (b) whether the rights holder is aware of this and thus acts with subjective fault; (c) whether the action causes harm; and (d) whether there is a causal link between the action and the harm.

The reasons

Applying the above test, the IP Court of the Supreme Court found and ruled that the plaintiff acted maliciously in both Case No. 79 and the present case.

Firstly, the infringement actions were evidently unsupported by any factual grounds. The evidence showed that the accused products, Go2 and A2 robot dogs, plainly lack several features that are identical to or equivalent to the patent claims. Moreover, the plaintiff, despite having full capability, did not follow the usual practice of producing the accused products for comparison.

Secondly, the plaintiff acted with clear subjective fault.

(i) The plaintiff’s legal representative Zhou had previously filed over 20 patent infringement suits against others directly or indirectly, none successful; the plaintiff should have exercised greater caution when initiating a patent infringement action again.

(ii) The plaintiff filed two separate suits based on the same patent over two robot-dog models. Case No. 79 had already found the Go2 robot dog non-infringing. Since the technical issues for the A2 robot dog were essentially the same as those with the Go2 robot dog and the A2 robot dog clearly fell outside the patent scope, the plaintiff nevertheless pursued the present case, and sought court orders for production of sales/financial records, evidence preservation, and judicial audit.

(iii) The timing is telling. Although Case No. 79 was filed less than 20 days before the media reported the defendant’s IPO guidance filing, the defendant was already a hot media and industry topic. The present case was filed after extensive IPO coverage, during the defendant’s critical regulatory-inquiry stage. The plaintiff, having acquired the patent from a third party, quickly initiated the first suit and then, shortly after IPO-related reports, filed this second suit and even threatened more. This forced the defendant to make IPO disclosures and explain risks, causing market concern and negatively impacted the IPO, evincing stronger fault.

(iv) The plaintiff’s litigation conduct has been capricious and contrary to good faith: it sought nominal damages plus later audit-based amounts, then added a punitive claim; it claimed Go2 and A2 robot dogs were unrelated yet later sought to add Go2 robot dog as an infringing product in the present case; on appeal, it reserved damage claims while seeking production/sale and financial records, evidence preservation and judicial audit; and it raised groundless procedural objections. These examples show the plaintiff’s baseless, contradictory, and harassing tactics.

Thirdly, the plaintiff’s conduct directly harmed the defendant. It negatively impacted normal business operations, especially by dragging a non-competitor at a critical IPO stage into costly litigation at minimal cost to itself, disregarding the defendant’s lawful rights and even its viability. This caused a gross imbalance of interests and disproportionate negative effects on both the major commercial activities and daily operations of the defendant.

Comment

Article 7 of China’s Civil Code stipulates that civil subjects shall comply with the principle of good faith, adhere to honesty, and abide by their pledges. Article 20 of China’s Patent Law further mandates good faith in exercising patent rights and forbids abuse harming public or private interests.

Case No. 96 signals that IP litigation should not be used as a strategic tool to exert commercial pressure, interfere with normal operations, or seek unjustified benefits. Chinese courts are prepared both to protect legitimate IP rights and to sanction abusive assertions.

Takeaways
•  Judges applied multi-factor test
•  Plaintiff used ‘harassing tactics’
•  Courts will sanction abusive assertions

Xiaojun Guo is a patent attorney at CCPIT Patent and Trademark Law Office and the secretary general of AIPPI China. He can be contacted at guoxj@ccpit-patent.com.cn.