It is generally believed that copycat products do not respect intellectual property. They have low price and poor quality, and their functions are quite different from those of the genuine products. In fact, there is no precise definition of the word "copycat,” and the word can not withstand scrutiny. Therefore, we should not categorize all of the imitating technologies gained from reverse engineering as "copycat.” Director of International Business Research Center under Institute of International Economic and Trade of University of International Business and Economics Wang Jian rectifies the reputation of “copycat,” believing that “copycat” is just a gimmick, a way of marketing. With careful comparison, it can be found that a lot of “copycat” products look like genuine products but with quite different functions. None of their hardware or software infringes the intellectual property of the genuine product. In fact, many “copycat” products do not constitute infringement.

Legal recognition of reverse engineering

Zhao Xiaolei from Zhejiang Guangcheng Law Firm makes legal and practical analysis on whether reverse engineering constitutes infringement. In his view, Article 12 of Interpretations of the Supreme People’s Court on the Application of Laws in Trial of Civil Cases of Unfair Competition (Interpretations), which entered into force on February 1st, 2007, provides that trade secrets gain from independent development and reverse engineering should not be deemed as a violation of the provisions of Article 10 (a), (b) of the Anti-Unfair Competition Law. “Reverse engineering” in the preceding paragraph refers relevant technical information obtain from demolishing, mapping and analyzing of a product gain from public sources by technical means. Parties that obtain trade secrets by improper means and then defend themselves with reverse engineering will not be supported.

Anti-Unfair Competition Law stipulates that “business secret” means technical information and operational information which is not known to the public, which is capable of bringing economic benefits to the owner of rights, which has practical applicability and which the owner of those rights has taken measures to keep secret. The first constituent element is “not known to the public.” According to the Interpretations, “not known to the public” means that staff in the relevant field are not generally aware of or can’t easily get access to the relevant information. The following circumstances can not be identified as “not known to the public,” which means that this information has been known to the public and does not constitute trade secrets: (a) the information is common sense or industry practice for people in the related technical or economic field; (b) the information relates only to the simple combination of size, structure, materials and components, which can be observed by the public after entering the market; (c) the information has been disclosed in publications or other media; (d) the information has been disclosed in public lectures, exhibitions and other forms; (e) the information can be obtained from other publicly available sources; (f) the information can be easily obtained without paying a certain price. Judging from the above provisions, behaviors of obtaining trade secrets by means of reverse engineering through formal channels do not constitute violations of trade secrets.

In addition, though it does not constitute infringement to apply trade secrets gain from reverse engineering through formal channels in relevant products, there are two points to note: first, if the trade secret acquired through formal channels have been granted with a national patent, in accordance with the related laws, trade secrets with national patent are still trade secrets, so the behavior does not constitute violation of the trade secret. However, according to Article 11 of the Patent Law, after the granting of the patent right for an invention or a utility model, except where otherwise provided for in this Law, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, and use, offer to sell, sell or import the products directly obtained by the patented process, for production or business purposes. After the granting of the patent right for a design, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, sell or import the product incorporating its or his patented design, for production or business purposes. Therefore, though the behavior of reverse engineering does not constitute violation of trade secrets, it may violate the Patent Law if applying related trade secrets in relevant products for production and operation purposes. Considering both the Interpretations and the Patent Law, it can be learnt that it is illegal to obtain unpatented trade secrets through formal channels and reverse engineering and to apply related trade secrets for production and management purposes.

Means of reverse engineering IP litigation

Reverse engineering promotes the continual advance of technology, and vice versa. IP owners shall develop the technology, make use of reverse engineering, and protect their intellectual property rights. Therefore, there are many restrictions on reverse engineering.

In judicial interpretation, reverse engineering is defined as obtaining relevant technical information by dismantling, mapping and analyzing products obtained from publicly available sources by technical means. In order to avoid abuse of the terms, the judicial interpretation also states: “Parties that obtain trade secrets by improper means and then defend themselves with reverse engineering will not be supported.”

Dr. Chen Wei from China Open Source Software Promotion Union Experts Committee told China IP , for integrated circuit chips, since all the graphics of layout-design exist at different depths below the surface, a full set of layout-design can be replicated after layer-by-layer erosion, microscope photography filming and size measurement. Reverse engineering plays a big role in the development of the integrated circuit industry and manufacturers around the world are all using this method to learn the product development of others. If this behavior is strictly prohibited, it will affect the progress of integrated circuit technology. Therefore, many countries regard this behavior as an exception for infringement under certain conditions in legislation. It shall not be deemed as an infringement to replicate a layout-design for teaching, analyzing and evaluating the concepts, techniques, circuits, logical structure and component configuration, or to apply the original layout in creative layout-designs and fabricate integrated circuits accordingly. However, it should be regarded as infringement to simply copy others’ protected layoutdesigns to produce integrated circuits for operation and sales purposes.

According to Chen Wei’s analysis, the legality of reverse engineering in computer software has been a controversial issue in IP protection for computer software. So far, no country allows software reverse engineering in the software protection laws. As a technical product, software development should consider the compatibility of the product, so that the absolute prohibition of reverse engineering may have an affect on the development of software technology.

Reverse engineering may be mistaken as serious violations of intellectual property. However, it can be a sword for the owners to protect their intellectual property in practical application. For example, in the field of integrated circuits and software, if you suspect that a company may infringe your intellectual property, you can make use of reverse engineering to find evidence.

In foreign countries, reverse engineering has long been used in intellectual property litigation. China’s judicial system is different from that in the US and Europe. In western countries, the research report is important evidence, and even some technicians can appear in court as witness. While in China, the effectiveness of such reports can not be equated. Foreign enterprises have many core patents, which have large market potentials and strong competitive advantages. It will bring immeasurable losses if these core patents are infringed. Therefore, companies will take a variety of measures at all costs to seek and find evidence of competitors’ infringement acts. Reverse engineering can precisely expose the infringers. Therefore, many companies would choose to use this method regardless of the cost.

It is learnt that domestic reverse engineering also plays an important role in evidence and infringement identification for intellectual property litigations (especially in software and integrated circuit cases). At the same time, due to the limitations of the technical means, sometimes it’s difficult for the evidence to fully prove infringement acts. This largely determines the evaluation on the litigation costs. Domestic companies put more consideration into whether they can obtain higher amounts of compensation through IP litigation and strike a bigger blow to their competitors, but the results often do not go well. In fact, they should change the concept of patent operation and fully explore the patent value. By means of mergers and acquisitions, joint ventures, etc., domestic companies can promote products into the market and gain certain market share, so as to achieve more economic benefits. The ultimate goal of reverse engineering is to seek cooperation and exchanges, and achieve mutual benefits.

(Translated by Li Guanqun)