China SPC’s Ruling on Infringing Technical Solutions Involving Products and Supporting Software

In a recently published decision by the Intellectual Property Tribunal of China's Supreme People's Court (SPC), the case between a Hangzhou-based technology company (plaintiff) and a Shanghai-based technology company (defendant) clarified the scope of patent infringement involvinghardware products combined with separately provided software. The ruling, issued in the context of an invention patent titled "Thermal Imaging Device and Thermal Imaging Method", provides useful guidelines forChinese courts on how they should determine the accused infringing technical solution in such integrated scenarios. 

Case Background

The plaintiff, the owner of the patent at issue, accused the defendant of manufacturing, offering for sale, and selling infringing thermal imaging devices. Independent claims of the patent in general relate to thermal imaging devices and imaging methods utilising a reference image and associated constituent data to provide visual prompts during thermal image capture, thereby lowering technical barriers for users and improving imaging quality and efficiency. A first-instance court organised an in situ test of the defendant's hardware product as purchased by the plaintiff;the test also involved software and a manual provided by a defendant's staff to the plaintiff during a pre-sale support, which occurred prior to and entirely separate from the purchase of the hardware product by the plaintiff for the  court proceeding.

The central dispute revolved around whether the accused infringing products encompassed features like the "reference image" and "reference image-related constituent data" as claimed in the patent. During the in situ test, the hardware alone was found to inherently lack the above features , but they were activated when users followed the manual to import data processed by the defendant's software. This raised questions about the boundaries of infringement: Does the solution include only the product's built-in features, or does it extend to those enabled by manufacturer-provided software?

Ruling of the SPC

Although the first-instance court ruled that since the hardware product as manufactured and sold by the defendant lacks the reference image and reference image-related constituent data, the patent was not infringed, the SPC reversed the first-instance judgment, ruling in favour of the plaintiff. The tribunal emphasised that when a manufacturer supplies software as an integral attachment to the product, intended for combined use by the purchaser, the resulting technical solution is attributable to the manufacturer. This is because the manufacturer is subjectively aware of and provides the complete system, which includesboth hardware and software components. In this case, the software and manual act as essential guides for realising the product's full capabilities. Importing software-processed data from the separately provided software into hardware effectively integrates the software's technical features into the hardware. In this regard, the patent's specification also allows for external storage media (like SD cards) in the "storage unit" and permits constituent data to be imported externally. 

Consequently, the SPC found the combined scheme fell within the patent's protection scope. 

Implications and Suggestions for Patent Applicants

The SPC’s ruling has significant implications for technology companies which design and/or manufacturing products relying upon a combination of hardware and (separately provided) software, highlighting that infringement assessments must consider the holistic user experience facilitated by manufacturers. It prevents defendants from evading liability by separating hardware and software distribution.

For patent applicants, the followings are some practical suggestions to strengthen protections. Firstly, when drafting patent claims, ensure that some claims explicitly cover combinations of hardware and software, including provisions of external data imports or modular integrations. Secondly, in the specification, describe how the supporting software enable key features, providing evidence for combined-use scenarios in potential litigation. More variations should be described where possible about different types of software that support the functionality, and the source of the software, such as firmware delivered separately through cloud or by storage devices, Thirdly, patent applicants should always foresee how competitors might split inventions into hardware and software, and include different groups of claims that address such divisions. 

We understand that foreign patent applicants may find it challenging to determine patent infringement in China (either direct or contributory), given the way the legal system is formulated and the lack of explicit case law. Should you have any patent inquiries relating to software-and-hardware integrated products, or any other inquiries of this nature, please do not hesitate to get in touch.