Hey Xiao-i: Apple Faces £1.1 Billion Patent Lawsuit After China’s Supreme Court Restores Validity of Xiao-i Patent

By Kirwin Lee, Senior Associate

Following a recent judgement handed down by the Supreme People’s Court of China, confirming the validity of a Chinese patent entitled “chat robot system”, the patent owner Shanghai Zhizhen Intelligent Network Technology Co., Ltd., also known as Xiao-i (“Little i”), has now filed a new patent infringement lawsuit against Apple Inc. Xiao-i is seeking 10 billion yuan (£1.10 billion) in damages, and demands that Apple cease “manufacturing, using, promising to sell, selling, and importing” products that infringe on the patent. This move could prevent Apple from selling most of its products in its second-largest market.

In a blow to Apple, the decision of the Beijing’s top court ruled in June 2020 effectively reverses the previous judgement made by Beijing High Court and restores the first instance ruling that the patent in question (patent number: ZL200410053749.9) is valid. This patent has been a key point of contention in Xiao-i’s long standing infringement campaign against Apple, as summarised in the events timeline below:

  • June 2012: the original lawsuit was filed by Xiao-i at Shanghai First Intermediate Court. Xiaoi asserted that the virtual assistant function on Apple’s iPhone, which is better known as Siri, infringes the “chat robot system” patent.
  • November 2012: Apple filed an invalidation request to the Patent Reexamination Board (PRB) of the SIPO (i.e. the predecessor of CNIPA) against the patent in question.
  • September 2013: the PRB decided in favour of the patent’s validity, confirming the patent’s “indisputable creativity, novelty and stability”, the decision subsequently affirmed by the Beijing First Intermediate Court.
  • July 2014: Apple filed an appeal to Beijing High Court against the validity decision of Beijing First Intermediate Court.
  • April 2015: The Beijing High Court overturned the decision of Beijing First Intermediate Court, thus invalidating the patent.
  • May 2015: Xiao-i appealed the invalidity decision of Beijing High Court to the Supreme People’s Court, the appeal case was subsequently accepted for review in December 2016.
  • June 2020: The Supreme People’s Court reversed the Beijing High Court decision, restoring validity of the patent.

The patent in question relates to a voice-activated personal assistant application, and the major issue considered by the Chinese courts over the course of the campaign concerns whether a game server feature of the invention was sufficiently disclosed in the application under Chinese Patent Law.

The Beijing High Court considered the patent to be invalid on the basis that there is no disclosure with regard to the connection between the game server and the other components of the chat robot. However, in overturning the High Court’s decision, the Supreme Court ruled that the sufficiency requirements with regard to features that are already known in the prior art should be lower than those for distinguishing features (i.e. features beyond the scope of knowledge and ability of those skilled in the art). In considering the content of the disclosure of the patent as a whole as well as the presented evidence, the Supreme Court determined that the features associated with the game server belongs to existing technology and therefore it was not necessary to describe these features in detail in order to fulfill the requirements for sufficiency of disclosure.

Due to the high-profile involvement of Apple as well as the patent concerning the field of artificial intelligence, the case has attracted widespread attention from the public. In fact, even the preceding rulings by the Beijing First Intermediate Court and the Beijing High Court were selected to be included in “Top Ten Patent Invalidation Cases in 2013” and “Top Ten Typical Cases of Intellectual Property in Beijing Courts in 2015” as published by CNIPA. The judgement handed by the Supreme Court not only provides much-needed clarification on sufficiency requirements, but also sets an important judicial precedent by affirming the principles set out in China’s Guidelines for Patent Examination.

It is speculated that China’s courts could ban Apple from selling products with Siri in the country for the duration of the trial. However, these types of interim injunctions are seldom granted as noted by Chinese litigation practitioners. In any case, as we are only a few months away from the launch of the 2020 iPhones, Apple may be under increased pressure to settle so as to avoid potential risks of a sales ban.