IP Court of SPC Issued 2020 Annual Report
The IP Court of the Supreme People's Court released its 2020 annual report at a recent press conference. According to the report, in 2020, the Court received a total of 3,176 technical IP cases and concluded 2,787 cases (including 512 cases from 2019). Compared with the same period in 2019, the number of cases received increased by 1,231, a year-on-year increase of 63%; the number of cases concluded increased by 1,354, a year-on-year increase of nearly 95%. In 2020, each judge concluded, on average, 82.5 cases, an increase of 110% over the same period last year. The average trial period for civil cases was 121.5 days, and that for administrative cases, 130.7 days.
Of the technical IP cases received in 2020, 1,948 were civil appeal cases, made up as follows: 435 were invention patent infringement cases, 754 were utility model infringement cases, 163 dealt with patent application and ownership rights, 360 involved computer software disputes, 67 technical contract disputes, 44 technical secret disputes, 40 new plant variety right disputes, 30 monopoly disputes, 5 integrated circuit layout design disputes and 50 other types of dispute.
Of the 2787 cases concluded in 2020, 1667 affirmed the original judgment (60%); 539 were withdrawn and 158 concluded by mediation (25%), 405 cases were concluded by remand for retrial or change of judgment (15%); and 18 cases were concluded by other means.
Copyright Registrations 2020 Exceed 5.03 Million, with A Year-on-year Growth of 20.37%
On 18 March, the National Copyright Administration issued a circular on the national copyright registration in 2020, which showed that the total number of copyright registrations nationwide had reached 5,039,543, an increase of 20.37% over the same period last year.
There were 3,316,255 registrations for copyright works, representing a year-on-year increase of 22.75%. The highest number of registrations was for photographic works: 1,510,914, or 45.56% of the total number of registered works; the second highest was for works of art: 1,295,415, or 39.06% of the total number of registered works; the third highest was for written works: 212,797, or 6.42% of the total number of registered works; and the fourth highest was for film and television works: 191,332, or 5.77% of the total number of registered works. The above types of copyright work accounted for 96.81% of the total number of registrations.
There was a total of 1,722,904 computer software copyright registrations nationwide, representing a year-on-year increase of 16.06.
China’s Highest Damages Award for Trade Secret Infringement (159 Million Yuan – approx. US$24.3 million)
The Supreme People's Court (SPC) has ruled in the trade secret action brought by Jiaxing Zhonghua Chemical Co., Ltd. (Jiaxing Zhonghua) and Shanghai Xinchen New Technology Co., Ltd (Xinchen) against Wanglong Group Co., Ltd. (Wanglong Group) and a former Ziaxing Zhonghua employee. The Court ordered Wanglong Group to pay compensation of 159 million yuan (approx. USD 24.3 million) for trade secret infringement. The trade secret involved related to a process for the production of vanillin, a widely used food additive. Prior to the infringement, Jiaxing Zhonghua had been the world’s largest vanillin manufacturer.
Jiaxing Zhonghua and Shanghai Xinchen New Technology Co., Ltd., jointly developed a new process for the production of vanillin and protected it as a trade secret. A former employee of Jiaxing Zhonghua, Fu Xianggen, subsequently received payment to disclose the trade secret to Wanglong Group and joined a Wanglong company as an employee. The Wanglong company began to produce vanillin, and in a short time became the world's third largest vanillin manufacturer, reducing Jiaxing Zhonghua’s market share and causing it serious economic loss. Jiaxing Zhonghua filed a lawsuit with the Zhejiang Higher People's Court, which found in its favour and ordered the Defendant to cease the infringement and compensate the Plaintiff for economic loss of RMB 3 million (approx. US$ 458,575) and reasonable costs of RMB 500,000 (approx. USD 76,429). All parties, other than an individual Wanglong director, appealed to the Supreme People's court.
The IP Court of the Supreme People's Court held: (1) the infringement was serious, the subjective intention of the infringer obvious, the period of infringement long; (2) the purpose of the establishment and operation of the Wanglong company concerned was, essentially, to use other people's trade secrets to produce vanillin; (3) as a result of the infringement, the price of the Plaintiff’s products has declined sharply, and the company’s market share has been greatly reduced, resulting in huge loss. Because the Defendants had refused to submit account books, the Court chose to determine the amount of compensation on the basis of the profits that would have been derived by the Plaintiff, using its pricing and profit margins, on 2,000 tons i.e. the Defendants’ sales volume from 2011 to 2017.
On this basis, the IP Court of the Supreme People's Court ordered the infringers to pay compensation of RMB 159million (approx. US$ 24.3 million), including reasonable costs of RMB 3.49 million (approx. US$ 533,476).
Meizu Ordered to Compensate HTC 3.54 Million Yuan (approx. US$ 541,119) in First Instance Patent Infringement Judgment
HTC Corporation, owner of patent No. 201310032515.5, for a "mobile device”, found that Zhuhai Meizu Technology Co., Ltd. (Meizu) and Beijing Hefeng Zhixun Digital Technology Co., Ltd. (Beijing Hefeng) were manufacturing, offering for sale and selling a mobile phone, the the Meilan note5 (model: m621q), that fell within the scope of its patent. It brought patent infringement proceedings in the Beijing Intellectual Property Court.
The Court held that the Defendant’s product contained all the technical features claimed in Claim 1 of the patent and thus fell within the scope of the patent.
In determining compensation, the Court took account of all the evidence and circumstances of the case: (1). The patent involved is an invention patent. The invention was the result of a large R&D investment, and had acquired a high market value; (2). The Meilan note5 mobile phone is a popular product. According to Meizu’s actual activation records, more than 3.5 million mobile phones have been sold over a considerable period of time; (3). The average selling price of the Meilan note5 mobile phone is RMB 1199 (approx. US$ 183) according to the price marked on Meizu’s official website.; (4.) HTC Corporation’s patented technology is only one of many patented technologies used in the Meilan note 5 mobile phones. In determining the amount of economic loss, it is, therefore, necessary to assess the proportion attributable to the HTC technology
The Court ordered the Defendant to immediately stop the infringement and compensate the Plaintiff for economic loss and other reasonable expenses, totalling RMB 3.54 million (approx. US$ 541,119).