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 ElectricalAppliance 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 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.