Recently, our firm won the first instance of an administrative litigation case for invalidation of an invention patent, in which it is ruled that the invention patent should be comp...
Introduction In the chemical field, it is difficult to seek invalidation of a patent claiming to have achieved unexpected technical effect. This case provides a strategy for success...
Sewing Machine Giant, Represented by Linda Liu & Partners, Awarded One Million Yuan in Damages, the Highest Statutory Penalty, for Patent Infringement
Days before, the Shanghai Intellectual Property Court concluded a patent infringement case in which Linda Liu & Partners represented the plaintiff, Brother Industries, Ltd. The court decision held that the defendant, a mechanical and electric corporation, should compensate Brother for its economic losses and reasonable expenses of one million yuan.
Brother Industries, Ltd. as a well-known manufacturer of industrial sewing machinery is the owner of an invention patent titled “Sewing Machine” which is the patent in dispute. The plaintiff bought the allegedly infringing products from the defendant’s dealer in September 2011, June 2013 and August 2015 respectively. The defendant was also found to distribute a publicity material about the allegedly infringing products and exhibit the allegedly infringing products at the China International Sewing Machinery & Accessories Show 2015, held in Shanghai. Having disassembled the allegedly infringing products and compared them with the patent at issue, the plaintiff found that they fell under the scope of protection of the patent at issue. Hence, the plaintiff thought that the defendant made, sold and offered to sell infringing products for production and business purposes with the authorization of the patentee, so its activities constituted infringement on the plaintiff’s patent. Since the patent infringement made Brother incur heavy economic losses, Brother filed a lawsuit with the court, requiring the defendant to immediately stop infringing on the patent right, destroy the infringing products and semi-finished products, destroy the die and dedicated equipment for making the infringing products, and compensate the plaintiff for its economic losses and reasonable expenses totaling 4.7 million yuan.
The mechanical and electric corporation argued that the allegedly infringing products did not fall under the scope of protection of the patent in question, the claim for that amount of compensation was neither based on facts nor on a legal basis, and the so-called reasonable expenses were too high.
According to the Shanghai Intellectual Property Court, the plaintiff is the proprietor of the patent at issue, titled “Sewing Machine”, and the patent is still valid. Thus, no entity or individual may, without the authorization of the patentee, make, use, offer to use, sell, or import the patented product. Those doing so infringe on the patent right and shall bear the corresponding civil liabilities in accordance with the law. The court trial found that the technical features of the allegedly infringing products CSM-9820A-00 and CSM-9820-00 completely covered all the technical features of claims 1, 2, 4 and 6 of the patent at issue, so they fell under the scopes of protection of those claims. The allegedly infringing products submitted by the plaintiff illustrated that the product with the type code CSM-9820A-00 and that with the type code CSM-9820-00 were the same in corresponding technical features. The purchase notarization showed that the same operation manual titled Instruction Manual for Computerized Eyelet Buttonhole Sewing Machine was contained in the packages of those two products. Besides, the manual’s Specification part says that the symbol “□” in the type code “CSM-9820-□” represents different bobbin thread cutting devices including the types of None, Long and Short which correspond to the three type codes CSM-9820-00, CSM-9820-01 and CSM-9820-02. The publicity material distributed by the defendant in the show included information on products with those three type codes. The defendant denied identicalness of that series of products in their technical features but failed to provide proof to the contrary. As a result, the court was in favor of the plaintiff’s opinion that the three products with the type codes CSM-9820-00, -01 and -02 as well as the products with the type codes CSM-9820A and CSM-9820 shared the same technical features and all fell under the scope of protection of the patent at issue.
The plaintiff required that the damages be calculated based on the profits made by the defendant from July 2014 to January 1 2017. The court held that the current evidence made it difficult to determine the infringing products’ returns on sales and rates of contribution to the profits, so it was impossible to follow the plaintiff’s claim in calculating the profits made through the infringing products, i.e., using the ratio of the sales of the infringing products to the total sales and their profitability. However, the sales record of the infringing products, among other evidence, was ample proof that the defendant committed the tort in a wide range, sold the infringing products in a large amount and made great profits. Besides, there are usually several factors—such as multiple techniques, the brand effect and marketing strategy—that take effect when a product makes profit. Hence, the contribution that the patent in question made to the profits should be taken into consideration in determining the damages. For the above reasons, the court held that the defendant should compensate the plaintiff for its economic losses and reasonable expenses totaling one million yuan, the highest statutory penalty.
The above decision came from the court of first instance and is not yet effective.
July 13, 2017
From Shanghai Intellectual Property Court
