Articles on Remedies, Warning Letters in Sept/Oct 2015 China IP Magazine

The September/October 2015 issue of China IP magazine has a couple of articles that may be of interest to readers of this blog.  

The first, authored by Liu Wei and translated by Yuan Renhui, is titled The Boundary for Proper IP Warning Letter--An Analysis of the Supreme People's Court Decision in the Edan Case, and discusses a March 19, 2015 decision of that court in Edan Co. v. Mindray Co. interpreting the circumstances under which a patent owner's sending a warning letter to customers or clients of an alleged infringer violates article 14 of China's Unfair Competition Law.  According to the author, Mindray sent such a letter to Edan's clients and gave a public interview accusing Edan of infringement.  Mindray thereafter prevailed on its infringement claims with respect to eleven Edan products (though all but one such matter was appealed and the appeal still pending), but it withdrew some other infringement claims against Edan.  The lower courts rejected Edan's trade disparagement claims, and the Supreme Court affirmed, reasoning that the facts showed that Minday had engaged in sufficient due diligence and the statements did not constitute "false pretense."  

The second, authored by Wang Guiling (Lucy Wang) is entitled Proposals for Improving Remedies Available for Patent Infringement in China.  The article discusses the principal remedies available throughout the world's major patent systems (damages in the form of lost profits, infringer's remedies, reasonable royalties, and in a few countries such measures as punitive or statutory damages; permanent and preliminary injunctions), with a special emphasis on the relevant law as it relates to these matters in China and the U.S.  (The author says that post-eBay U.S. courts have granted injunctions to victorious patent owners 60% of the time; in reality it's probably more like 75%.)  The author urges Chinese courts not to award permanent injunctions automatically (a call that others have made, see my blog post here) and to have more formal proceedings for determining whether to award preliminary injunctions.  She also argues that the Chinese courts should provide more detailed guidance for awarding damages for price erosion, lost profits on convoyed sales, and damages due to the defendant's accelerated market entry (sometimes referred to as "springboard" damages).  In addition, she would like to see more awards of attorneys' fees, the introduction of treble damages for intentional infringement (rather than the "two to three" times as stated in the pending draft fourth amendment to the Patent Act), and an enhancement of the amount awardable as statutory damages (right now the cap comes to about $160,000 in U.S. money).