Thursday, March 18, 2021

Interesting Chinese Case on Patent Damages

Kenneth Zhou has published an article titled Review of the year in Chinese patent litigation, 15 JIPLP 442-49 (2020) (available here, behind a paywall).  The article discusses, among other matters, the 2019 decision of the Supreme People's Court in Wuxi Guowei Ceramics Appliance v. Changshu Linzhi Electric Heating (brief discussion available here, in Chinese, as case number 2 ("二"), "PTC heater" ("PTC加热器").  By way of background, as the author notes in the majority of cases in which the patent owner prevails at trial, the court awards statutory damages, which are capped at 1 million RMB.  (This will go up to 5 million RMB on June 1, but that's still only about U.S. $700,000.)  A problem for patent owners is that it is often difficult to prove their actual damages or the infringer's profits (particularly given limitations on discovery).  In this case, however, the SPC was able to use "revenue information on the infringing products provided by the infringer," which it then multiplied by the plaintiff's profit margin of 15%, and then by another 50% to reflect the contribution of the patented technology to the infringing product (based on both its technical value and the fact that the defendant "had refused to participate in the court proceeding"), for a grand total of RMB 8.6 million (to which the court added an additional amount for other expenses, totaling in full RMB 9.5 million).

Mr. Zhou also discusses the 2019 conviction for extortion of an individual who allegedly filed a series of meritless patent infringement suits for the purpose of coercing settlements.  For previous mention on this blog, see here.   
Hat tip to Norman Siebrasse for calling this article to my attention.

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