In addition to bringing a civil suit for patent infringement, a patent holder who discovers infringement such as from manufacturing or selling can also petition for a preliminary injunction to temporarily bar said infringement until conclusion of the litigation. Such a preliminary injunction may force the accused infringer to stop all business, thereby causing tremendous impact on its operations.

According to the Code of Civil Procedure (CCP) and current court practice, upon appeal filed by the accused infringer against a preliminary injunction, if the appeal court decides that the lower court erred in granting the injunction and revokes the lower court's ruling of the injunction, the accused may claim from the patent holder damages caused by the improper injunction. Such claim is not contingent upon the patent holder's intentions or negligence in petitioning for the preliminary injunction.

The scope of the aforementioned damages should be limited to injury suffered by the accused patent infringer during the preliminary injunction. However, the CCP does not offer clear guidance with regard to whether attorney fees incurred in the appeal procedure could be considered part of the "suffered injury."

Under the current system, an attorney must be retained to represent a party pursuing a third-instance proceeding. Therefore, only the attorney fees for the third instance are considered part of the court costs (after litigation concludes, the court costs shall be borne by the losing party or shared between the parties in accordance with the court's decision). Further, the law provides an upper limit on third-instance attorney fees to be included in the court costs. However, the question remains in the case of preliminary injunction: can the accused patent infringer claim damages from the patent holder for the attorney fees incurred during the third-instance appeal against the injunction?

This issue was discussed by the Supreme Court in its Judgment No. 2011-Tai Shang-1505 rendered in September 2011. In this case, the accused patent infringer revoked the injunction through the appeal proceedings, and subsequently filed a civil suit against the patent holder to claim damages for patent misuse. In addition to the losses suffered by its business during the effective period of the injunction, the accused infringer also requested the attorney fees incurred in the third-instance appeal. Although such request was accepted and recognized by the IP court, the Supreme Court took a different view in this respect. The Supreme Court held that the attorney fees for the third-instance appeal could not be considered part of the damages caused by the preliminary injunction, so the patent holder could not be held liable for them.