photo by Hexun

On March 4, 2019, a case of patent infringement was held in the Intermediate People's Court of Nanjing Municipality, which had aroused huge public attention.

Here are the reasons:

First, it can be a patent infringement case with the highest claim.

Jiangsu Tongling, the plaintiff, claimed a compensation of 1 billion USD. Although the social environment for IP protection has improved and there have been more IP infringement lawsuits with claims for higher compensation, 1 billion USD is still a rare number to see.

Second, the defendant is the famous Bull Group which is preparing for the IPO.

The Bull Group is a leading domestic socket producer. According to its prospectus disclosure in October 2018, the overall value of the Bull Group may approach 50 billion Yuan. However, it also faces a declining gross margin and competition from Xiaomi.

Jiangsu Tongling Technology argues that the Bull Group has used its patents (No. ZL2010297882.4 and No. ZL201020681902.3), suspected of infringement.

Jiangsu Tongling is an export-oriented company with high-tech patents protected by IP laws. It specializes in leakage protection products which sell well in North American markets. It is the only Chinese export company to the U.S. leakage protection market and has taken 10% of the U.S. market.

Founded in 1995, the Bull Group started by selling switch sockets and converters. The company is now doing a big business. Data show that from January to March 2015, the company's operating income was 4.459 billion Yuan, 5.366 billion Yuan, 7.24 billion Yuan and 2.049 billion Yuan respectively, and its net profit during the same period was 1 billion Yuan, 1.407 billion Yuan, 1.285 billion Yuan and 321 million Yuan respectively.

Who will win? How will this lawsuit affect the IPO of the Bull? Will it become a classic case of intellectual property protection in China? Let's wait and see.

March 5, 2019

Source: Hexun