PATENT INFRINGEMENT DISPUTE FOR “CONCEALED DOOR HINGE” ◆ First Instance Docket: (2015) YueZhiFaZhuanMinChuZi No. 2333 ◆ Second Instance Docket: (2017) YueMinZhong No. 973 CASE 6 :
Guangdong Province
[Headnotes] If the patent claims indicate multiple subject matters whose inventive purposes are wholly unrelated, in interpreting a limitation in one of the subject matters, reference should be made to the inventive purpose in the subject matter the patentee seeks to protect.
[Synopsis] Appellee (Plaintiff below): Simonswerk GmbH (Simonswerk) Appellant (Defendant below): ShenGang Precision Hardware and Electronics Co., Ltd (ShenGang) Simonswerk is the patentee for the patent No. Z L200910212035.0 of “Concealed Door Hinge.” Being informed of ShenGang’s manufacture and sales of products infringing its patent, Simonswerk after obtaining evidence filed suit for injunctive and monetary relief. The court of first instance after finding ShenGang having manufactured, sold and offered to sell the accused infringing product, decreed that it compensate Simonswerk for economic loss (reasonable expenses included) in the amount of 250 thousand Yuan, and rejected all other Simonswerk claims. ShenGang was not satisfied and appealed. The court of second instance is of the opinion that the patent claims contains multiple subject matters, each for a less than identical purpose. Simonswerk is asserting claim 1 in this case, of the subject matter of which, the interpretation of the limitations should be made in conjunction with the inventive purpose of claim 1. The purpose of this invention is to match door
hinges of different lengths by having detachable connecting unit, and modularization of the members at the ends of the blades on the connecting unit, which can fit into different lengths and structures of a door hinge, so as to result in simple manufacturing and less cost. Claim 1 of the patent states: “the blade end each having corresponding supporting member and plug-in member.” The “supporting member” in the entire subject matter, coupling with the “plug-in” member, plays the function of supporting the connection member which function is achieved so long as the blade ends contain a “plug-in member” and “supporting member” without a “third member on the blade ends” apart from “supporting member” and “plug-in” member. ShenGang’s contention that the “blade ends,” the “supporting member” and the “plug-in” members should be defined as three separate members is unsupported by evidence. Moreover, the additional limitations of claim 9 of the patent further describes, “said blade ends wherein a means for adjusting said door plate along a second horizontal axis (Y) being placed in the middle of said blade end,” i.e., movement function of the door plate (i.e., the hinge) on the Y axis is achieved by the additional limitation of claim 9, rather than by any of the members, including the “support member.” Simonswerk asserted claim 1, which cannot be limited by claim 9’s definitions. ShenGang’s contention that the invention purpose of the subject matter can be achieved only by separating the “support member”
and the “blade ends” is unsupported by evidence. In sum, the element in the accused device of having a detachable “support member” at the blade end is within the claimed limitation, constituting an equivalent. Therefore, the second instance court affirmed the judgment below.
[Judge’s Comment] In patent infringement lawsuits, whether all elements are met by the patent claim is a constant issue. Article 7 of Supreme People’s Court on the Interpretation of Several Issues of Law Applicable in Patent Infringement Trials provides, “In determining whether an accused subject matter is covered by the protective range of a patent, all the limitations of an asserted patent claim must be examined. A people’s court should find for infringement if all the elements of an accused device are literally or equivalently matched with a claim’s limitations; whereas, if one or more elements of the accused device are missing, or neither literally or equivalently matched with a claim limitation, the people’s court should find for non-infringement. In some unique circumstance, as in multiple claims indicating a variety of completely different subject matters for multiple inventive purposes, the interpretation of the limitation of a claim is often key to determining whether an accused device falls within the claimed protective range. In interpreting a limitation, it has to take the inventive purpose of the claimed subject matter into consideration.
“RETROSPECTIVE” INFRINGEMENT OF PATENT AFTER RESCISSION OF ASSIGNMENT AGREEMENT ◆ First Instance Docket: (2017) Su01MinChu No. 518 CASE 7 :
Jiangsu Province
[Headnotes] Assignee of patent, upon recordation of the lawful assignment of patent, relying on good faith belief of its own identity and rights as patentee, may properly and reasonable exercise the patent rights. When patent assignor enters into bankruptcy proceedings, and its assets manager obtains a judgment for rescission of the assignment on basis of unreasonable assignment price, the assignee’s conduct of practicing the patent during the period when it becomes the patentee due to assignment up to the cancellation of the assignment, shall not retrospectively become patent infringement because of the cancellation of the assignment.
[Synopsis] Plaintiff: Nanjing JiuZhu Enterprise Co., Ltd. (JiuZhu) Defendant: Nanjing HouHe Mechanical Technology Co., Ltd. (HouHe) In 2014, HouHe, by a patent assignment agreement with patentee JiuZhu, became the patentee of record. In 2015, JiuZhu entered into bankruptcy proceedings for reorganization, when its assets manager filed suit to rescind the patent assignment agreement on basis of obvious unreasonable price. In August 2016, Nanjing Intermediate People’s Court awarded judgment for JiuZhu’s bankruptcy manager, to be affirmed by Jiangsu High People’s Court in December 2016. In February 2017, change of the patent ownership was re-recorded showing JiuZhu
as patentee. In March 2017, JiuZhu obtained evidence for HouHe’s making and selling alleged infringing products. JiuZhu contends that the assignment when lawfully cancelled is void ab initio, and therefore HouHe’s manufacture and sale of its products in August and October of 2016 are an infringement of its patent, for which it sought damages of 1 million yuan (in addition to reasonable expenses of 206,600 Yuan). At trial, JiuZhu asserted only the legal cause of patent infringement. Upon trial, Nanjing Intermediate People’s Court found that from the perspective of the fact that a patent assignment was concluded between JiuZhu and HouHe, HouHe is of course entitled to exercise the patent rights according to the assignment, which JiuZhou should have recognized and subjectively consented. The cancellation proceeding of the assignment executed by the bankruptcy management represents the will of the bankruptcy creditor rather than that of JiuZhu, and in fact bankruptcy creditor’s interference of the improper disposition of the debtor’s own property, the causation of which does not depend on the parties’ will, and therefore it is wrong to think that the assignment violates the true intentions of JiuZhu and HouHe, let alone the effect of the interference hinges on the result of a litigation. Thus, HouHe may reasonable and faithfully rely on the assignment which has been properly recorded prior to formal cancellation of the same. In sum,
despite the cancellation is treated retrospectively of the invalidity of the assignment for HouHe’s patent right ab initio, it cannot take out HouHe equitable intervening right during the assignment. In the absence of bad faith of HouHe in practicing the patent, infringement is unfounded, and such allegations may not be sustained. In the end, the court dismissed all plaintiff’s claims.
[Judge’s Comment] Acquisition of patent through assignment is an important means for the transfer of patent right. There, validity of the assignment is significant to the effect of the transfer of actual patent rights. Factors affecting assignment validity vary, some representing true intentions of the parties but violating third party interest, others causing invalidity or rescission for violation of the parties’ intentions, and still others though against the true intention of the patentee, resulting in good faith practicing the patent by the assignee. In the various circumstances, after the assignment is invalidated or rescinded, if the original patentee brings suit against assignee for patent infringement during designated period, it shall be first determined the legal status prior to execution of the patent assignment; second, the assignee shall be recognized as acquiring no patent rights ab initio; then, a finding of all the necessary elements of infringement shall be made based on the allegation. In finding of infringement, emphasis is placed on
whether practice of the patent is in violation of the patentee’s will. If it can be determined or presumed that there is no such violations, and as long as the conduct is in good faith, no infringement should be found in principle. As to damages, compensation of interest or unjust enrichment once
a patent assignment is declared to be invalid or canceled by law, determination as such should be made in consideration of the parties’ contentions and the legal consequences proven be evidence. Similarly, in the matter of trademarks arising out analogous administrative procedure, an
allegation of trademark infringement due to use during assignment once the trademark assignment is pronounced invalid or cancelled, may be analogized to the idea and treatment of whether practicing patent under assignment which would later be invalidated or cancelled.
PATENT INFRINGEMENT DISPUTE OVER INVENTION PATENT FOR “AIR CONDUCTION COMPONENT” ◆ First Instance Docket: (2015) ShenZhongFaZhiMinChuZi No. 1043 CASE 8 :
City of Shenzhen
[Headnotes] Patent law imposes estoppel whereby a patentee is estopped from asserting protective range in litigation that has been excluded from the protective range during patent prosecution or invalidation through amendments or statements, and on top of that, an exception is added for clear denial to the estoppel. A functional limitation defined by mode of application or equivalents thereof in the specification or accompanying drawings should be narrowly interpreted, on a different footing from the Doctrine of Equivalents in patent infringement comparison of structural limitations.
[Synopsis] Plaintiff: Philips Quality Life Co., Ltd. (Philips) Defendants: Yuyao WeiFeng Electronics Co., Ltd. (WeiFeng); Cixi ZhaoFeng Appliance Co., Ltd. (ZhaoFeng); Shenzhen YiRan Home Applicances Co., Ltd. (YiRan) Plaintiff Philips obtained an exclusive license for the patent at issue, and is authorized by the patentee to take legal actions against patent infringement for
compensation, for which the patentee relinquishes all rights to sue. Philips purchased from JingDong internet e-platform, Shanben Specialty Store, a “Shanben Air Frying Pan (Model S B-001)” on which it has the registered trademark “ 山本SHANBEN.” Plaintiff contends that the accused device has a round circular projection at the bottom, which constitutes an equivalent of the patent claims 1, 9 and the limitations of F and G of claim 10 in combination of drawing Fig. 1 for “Air Conduction Component” in the patent specification, falling thereby in the protective range of the patent. Thus, it sued in Shenzhen Intermediate People’s Court for infringement of its patent. The court at first instance found: the accused device lacks at least one or more elements for the claim limitations, and therefore cannot constitute infringement by equivalency. The court dismissed Philips complaint.
[Judge’s Comment] The two defendants contended that the patentee made a statement in the invalidation proceedings
further defining the location of heat radiation device, leading to a subject matter without placing heat radiation above the food chamber, and is therefore estopped from claiming so. The court clarified at first instance that the patentee made further limitation in response to challenges in prosecution proceedings, once accepted, shall result in estoppel. According to Supreme People’s Court Interpretation of Several Issues of Law Applicable in Patent Infringement Disputes (II)(“Interpretation (II)”), Article 13, estoppel does not apply to patentee due to above statement. Interpretation of functional limitations and the estoppel (relinquishment of subject matter) are the tough spot in the trial of patent infringement. In the present case, useful exploration was made on how to determine functional limitation and the protection range therefor: 1. The judicial opinion of this case accurately understood and applied laws of civil proceedings and the judicial interpretations. The estoppel set up by the Patent Law mandates that by setting up the estoppel from asserting as protective range what
is abandoned by amendment or statement in the patent prosecution or invalidation proceedings, and on top of which, adds an exception to the estoppel for “clear denial.” In this case, Interpretation (II), Article 13, is further defined from legislative history and purpose, and analysis is made on “denial of limiting amendment or statement,” enhancing operability of the Article.
2. As to interpretation of functional limitations, this opinion following Interpretation (II) no longer uses the doctrine of “secondary equivalency,” i.e., the equivalents of a functional limitation are defined by the specific modes set forth in the specification and drawings, rather than all possible modes of application, to wit, once equivalency is “primarily” applied to the specific modes, the protective
range of the functional limitation is defined. There is no second bite for further equivalency. This dispute over patent between Philips and Chinese small appliance enterprises is properly handled, with careful analysis and accurate determination of technical problems, achieving satisfactory social effect, providing practical guidance for similar future cases.
PATENT INFRINGEMENT DISPUTE BETWEEN HUAWEI AND SAMSONG ◆ First Instance Docket: (2016) Min05MinChu No. 725 ◆ Second Instance Docket: (2017) MinMinZhong No. 501 CASE 9
:
Fujian Province
[Headnotes] In assessing damages for infringement, when defendant refuses to provide information on sales and benefit as ordered by court. In the absence of information from either plaintiff or defendant regarding actual damages and illegal gains, a court may actively apply the evidentiary rules on basis of patent law principles for protecting legitimate interests of patentee, taking into consideration of such information as degree of innovation of the patent, defendant’s bad faith, scale and the amount of sales, and the profit, etc., and excise a reasonable amount beyond the statutory figure.
[Synopsis] Appellants (Defendants below): Huizhou Samsung Co.; Tianjin Samsung Communications Technology Co.; Samsung (China) Investment Co.; Hua Yuan Telecommunications Co. of Quanzhou, Fujian Prov.; and Quanzhou Pengrun Gome Electrical Appliances Co. (Collectively, defendants) Appellee (Plaintiff below): Huawei Device Co., Ltd. (Huawei) Huawei was formed on December
24, 2003, with consumer business as core business whose products cover mobile phones, mobile broadband, and home terminals. On January 28, 2010 Huawei filed a patent application for “Method for Displaying and Processing Assembly and User Equipment” which was issued June 15, 2011 under No. ZL201010104157.0 (the Patent). Plaintiff Huawei paid annuities for the patent which remains effective. Through market investigation, plaintiff believes that 23 types of mobile phone and tablet computer products manufactured by Huizhou Samsung and Tianjin Samsung have infringed its patent, which terminal products were purchased under notarization during April 5 through July 13 of 2015 from Quanzhou Gome, Quanzhou Hua Yuan, and Taobao.com. The Patent has 16 claims, of which Huawei asserts 1, 4, 5, 6, 9, 12, 13, and 14 as basis for infringement in the lawsuit that follows. In the trial process defendants raised the defense of prior art and interference applications. Upon comparison, none of the defendants’ evidence for prior art or interference discloses all elements of the accused
devices, and all showing substantial differences with the accused devices. The defense argument of prior art and interference was ruled out. In sum, Quanzhou Intermediate Court in its decision issued injunction against Huizhou Samsung, Tianjin Samsung, Samsung (China), Quanzhou Gome and Quanzhou Hua Yuan, and assessed damages of 80 million yuan against Huizhou Samsung, Tianjin Samsung, and Samsung (China) for joint liabilities. After announcement of the judgment, defendants Huizhou Samsung, Tianjin Samsung and Samsung (China) were dissatisfied and appealed. The appeals were rejected and the judgment were affirmed, which has been executed.
[Judge’s Comment] This case represents the largest dispute amount of patent case since the third civil tribunal was established for Quanzhou Intermediate People’s Court, and also Huawei’s first of its series of cases asserting its rights in China, attracting wide attention of the society and of the media. As a patent dispute in the mobile communications technology, this cas
is distinct from all other cases of the same type in that most other cases involve standard staple patents which have to be employed in making the terminal devices. But in this case relates to a framework core patent for mobile end user graphic terminal interface which brings about differential experience to the end user, a nonstaple patent, which is not necessary in making mobile terminal devices. Huizhou Samsung, Tianjin Samsung and Samsung (China) are the world leading manufacturers smartphones, but they in many of their models of smartphones used the subject matters of this patented technology, a sign of very high market recognizability of this patent. Moreover, both Huawei, an affiliate of Huawei Technologies, and Samsung are world communications equipment giants, having significant position in the business of mobile communications. As the benchmark for rapid development of informatization and intellegentialization, the mobile communications industry’s core patents have extremely important values in strategic resources, and play a significant role in national intellectual property strategies. The decision in this case generated leading effects in making rules and model conducts for market competition in mobile
communications technology areas. During the trial of this case, both plaintiff and defendants submitted large amount of evidence which took tremendous time to go through. Besides, in making technical comparisons, it was necessary to compare the 23 pieces of terminal equipment one by one, and examine the 13 prior art technologies along with interference applications, a huge workload to carry. On the premises of guaranteeing procedural rights for the parties, Quanzhou Intermediate Court adopted the procedures of “Pretrial conference and statement + supplemental written opinions” and “pretrial exchange of evidence + supplemental interim introduction” to encourage the parties to focus on evidence examination and technical comparison, effectively to increase productivity of the trial. In determining specific relief under the injunction, Quanzhou Intermediate Court, taking note of the special character in this case that involves method patent, and that as infringement media, the mobile terminals can be separate from the infringing method, besides ordering to enjoin the defendants from making, offering to sell and sale of the infringing devices with the patent method, further ordered them to
remove the infringing graphic user interface from the mobile terminals’ operation system, ensuring the execution of the judgment. In determining the amount of the compensatory damages, Quanzhou Intermediate Court ordered an accounting of defendants’ sales figure and profit. When the defendants refused to provide the information, in actively reliance of evidentiary rules, used plaintiff’s IDC data, the Samsung annual financial report for basis of sales and sales income, in combination with MIIT estimate provided by defendant, to form a foundation for the amount of compensatory damages. In addition, in the absence of either plaintiff’s or defendants’ evidence for actual damages and the illegal gains from defendants’ infringing activities, the court sua sponte applied the patent law principle of protecting patentee’s lawful interest by taking comprehensive consideration of the degree of innovation, bad faith on the part of defendants, the amount of sales, the figure of sales, and the profit, thereby making the reasonable amount of damages of 80 million Yuan over and above the statutory damages, giving effective judicial protection of intellectual property rights.
PATENT OWNERSHIP DISPUTE FOR JOINT EFFORT ◆ First Instance Docket: (2016) Su05MinChu No. 127 CASE 10 :
Jiangsu Province
[Headnotes] Under judicial practice, proprietorship for intellectual property achievement obtained during the joint effect, in the absence of prior agreement, shall be equitably determined based on each party’s substantive contribution; for equal
contributions, it may be considered as joint ownership.
[Synopsis] Plaintiff: A Certain Electrical Appliance Company of Shenzhen (Shenzhen Company) Defendant: A Certain Electrical
Appliance if Suzhou (Suzhou Company) Third Party: A Certain Electrical Company of Wujiang (Wujiang Company) Plaintiff Shenzhen Company is a professional research and manufacturing entity of dense teeth
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heat radiator; Suzhou Company is specialized in manufacturing PTC thermosensitive heater. In February 2014, Shenzhen Company and Wujiang Company together reached consensus with Suzhou Company for a joint effort whereby, Shenzhen and Wujiang would provide to Suzhou structural blueprint, data and samples for heat radiator teeth with internal positioner so that Suzhou would come up with finished products to be purchased therefrom. In the process, Suzhou made improvement on the Shenzhen design’ positioning strip and showed it to Shenzhen. Subsequently, the three parties terminated their joint effort for some reason. Shenzhen discovered that Suzhou on October 22, 2014 obtained a utility model patent for the dense teeth heat
radiator strip with internal positioner. In April, 2015 Shenzhen Company filed lawsuit against Suzhou Company claiming ownership of the patent. In the litigation process, the court directed mediation to reach settlement for cross-licensing among the three parties.
[Judge’s Comment] At trial, the court found that Suzhou had made improvement proposals on Shenzhen’s positioner’s blueprint, indicating that the improvement would fully guarantee dead centering of the PTC chip along the width of aluminum pipe so as to increase the power effect of the product. Suzhou thereafter applied and obtained a patent based on the positioning strip blueprint. Wujiang has never applied for patent on its dense teeth radiation
strip, and has long been selling the products on the market. The court concluded that ownership shall be equitably determined for intellectual properties according to each party’s substantive contribution in the process of joint efforts where the parties did not have agreement; if the contributions are equal, the achievement may be jointly owned. In this case, the court made a creative proposal in determining proprietorship for a single party while by mediation arranged crosslicensing for all disputing parties, through complicated negotiations resulting in maximization of the parties’ interest, avoiding unnecessary litigation, to substantively solve the problem for a win-win result.
