Record Amount of Damages Awarded in Chinese Patent Infringement Case
The Wenzhou Intermediate People's Court announced its judgment, on September 29, 2007, in a case involving the Chint Group and Schneider Lower Voltage Electrics (Tianjin) Co. According to the judgment, the defendant, a subsidiary of Schneider Electric S.A. of France, infringed Chint's Chinese patent, related to a miniature circuit breaker, and should pay damages in the amount of 335 million RMB (about USD 47 million), the largest damage amount awarded in a patent case in China.
Chint Group, based in Wenzhou, Zhejiang province, about 200 miles south of Shanghai, is the biggest Chinese producer of lower voltage electric products. Schneider, on the other hand, is the world leader in the same business. The two parties have had numerous legal encounters in China and around the world. But until this case, Chint had always been the defendant and accused infringer.
Chint sued Schneider in August 2006 based on a patent for utility model. A utility model, sometimes called a petty patent, does not go through substantive examination in China and is granted after formality checks, usually in about one year after filing. According to available procedure, Schneider immediately filed an invalidation request with the Patent Reexamination Board (PRB) of China's State Intellectual Property Office. The PRB held, in its April 2007 decision, that claims 2-4, out of original claims 1-4, of Chint's patent is valid. Schneider appealed the PRB's decision to the Beijing No. 1 Intermediate People's Court. The case is now pending.
The Wenzhou court held hearings regarding infringement, after the PRB's decision. In addition to non-infringement, Schneider also used "practicing prior patent" as its defense. The court rejected both argument and declared that Schneider infringed claim 2 of Chint's patent. The amount of damage was essentially determined based on Schneider's revenues from the infringing products, about 883 million RMB, and its "average profit margin," about 38%, from the relevant time period.
Schneider has appealed the ruling to the Zhejiang High People's Court. The case is now pending.
The Schneider case raised many important legal issues regarding the Chinese patent regime in a time when the Chinese IP and legal systems are attracting great interests from around the world. Schneider's patent and IP strategy in China, much of it revealed in the case, is also put into spotlight and question. Among the issues raised by the case are jurisdiction matters, the relation between infringement case and the related invalidation proceeding, admissible standard for foreign originated evidence, using practicing prior art as a defense, damage amount determination, and the nature and value of utility models. For more information regarding the case or Chinese IP matters in general, please contact China Sinda.
China Sinda Held Successful Moot Court in Japan
Attorneys from China Sinda held successful court demonstrations of a mock patent infringement trial in Tokyo and Osaka, Japan in November 2007. The event, first of such kind by a Chinese firm, was organized in cooperation with Japan's NGB Corporation and attracted great interests. More than 200 heads of legal and/or IP departments from some of Japan's largest corporations and IPR owners attended.
The moot court demonstrated in great detail of a complete patent infringement court hearing in China. Attorneys from China Sinda also introduced the Chinese legal and court system and procedure prior to the demonstration and answered questions afterwards. Attendees had a first-hand and realistic experience of a Chinese court hearing and their response was overwhelming. China Sinda's attorneys are preparing for more such events in other countries, including the U.S.
Sinda attorneys Gary Zhang, Guangliang Zhang and Jinhua Lu prepared and played key roles in the moot court.