Gree V. Aux Patent Infringement Dispute Case

China IP,[Patent]

 

In intellectual property litigation, the problem of "difficulty in proof" exists within a certain range. For evidence such as financial data held by the infringer, the court may order the infringer to submit it to find out the profit from the infringement. When determining whether the accused infringer constitutes an obstacle to the production of evidence, the court shall focus on examining whether the evidence submitted by the accused infringer meets the form and scope of the documentary evidence submission order.
 
First-instance case number: (2017) Guangdong 73 Civil Judgement No. 390
 
Second-instance case number: (2018) Guangdong Final Civil Judgement No. 1132
 
【The main takeaway of the trial】
 
If the infringer only submits part of the evidence required by the order for evidence submission without justified reasons, so that the actual profit cannot be ascertained, which constitutes an obstacle to proof. The benefits obtained by the infringer due to the infringement can be determined based on the claims and evidence provided by the right holder.
 
Suppose the infringer only makes simple changes to the original infringing patent technical solution and thus infringes the same patent right again; In that case, it can be determined that the infringement is subjective and obvious, and the punitive factors of the infringement should be taken into account when deciding the number of damages, so as to make the liability of damages fit the nature and circumstances of the tort.
 
【Case Introduction】
 
Appellant (defendant in the original trial): Ningbo Aosheng Trading Co., Ltd. (formerly known as Ningbo Aux Air Conditioning Co., Ltd., referred to as Aux Company)
 
Appellee (plaintiff in the original trial): Zhuhai Gree Electric Co., Ltd. (referred to as Gree Company)
 
Defendant in the original trial: Guangzhou Jingdong Trading Co., Ltd. (referred to as Jingdong Company)
 
Gree Company has a utility model patent with the patent number ZL200820047012.X and the name "an indoor unit of an air conditioner". Gree Company filed a lawsuit with the Guangzhou Intellectual Property Court, accusing the Aux Company of manufacturing, selling, and promising to sell the model KFR-35GW/ BpTYC1+1 and other eight air conditioners for repeated and malicious infringement of its patent rights.Jingdong Company carried out sales infringement and requested the court to order Aux Company and Jingdong Company to stop infringement, and Aux Company compensates Gree Company RMB 40 million, etc. In order to prove that Aux Company made profits from infringement, Gree Company submitted evidence such as the sales of major air-conditioning companies published by AVC (a big data company), the sales of alleged infringing air-conditioners on JD.com, and the financial reports of companies in the same industry.
 
The court of the first instance found that the eight air-conditioning indoor units manufactured, sold, and promised to be sold by Aux Company had the same structure, and all fell within the scope of protection of Gree's patent involved. Aux Company' refusal to submit the complete evidence required by the documentary evidence submission order without justifiable reasons constituted an obstacle to proof. According to Gree’s claims and the evidence provided, it calculated the profits of Aux Company from infringement, and it was judged that Aux Company and Jingdong Company should stop the infringement, and Aux Company compensated Gree Company with RMB 40 million.
 
Aux Company refused to accept the judgment and appealed to the Guangdong Higher People's Court. The second-instance court held that, the first-instance court ordered Oaks to submit account books and materials that could prove all the sales and profitability of the eight air-conditioners indicted, and explained the legal consequences of overdue, refusal, false, and incomplete submission of relevant evidence. Aux Company only submitted some of the financial data and details of the accused air conditioners sold to Jingdong Company in 2016 and 2017. The statistics only involved four of the accused infringing air conditioners, and the geographical scope was only in some provinces and cities of Southern China. Therefore, it was reasonable that the court of the first instance found that Aux Company constituted obstruction of proof.
 
Gree Company once accused Aux Company of manufacturing and selling another model of air conditioner infringing on the same patent right of Gree in this case in 2015 and sued to court. After the first instance, second instance, and retrial review of the case, the court found that Aux Company constituted an infringement. The eight types of air conditioners accused in this case have only slightly changed their structures compared to the previous infringing air conditioners. There are many models whose manufacturing dates are later than the date of the first instance, second instance and even retrial review rulings. Aux Company ignores national laws and effective judgments and uses substantially the same technical solution to infringe on the same patent right again, subjectively and deliberately, which should be severely punished. According to calculations based on existing evidence, Aux Company’s infringement profits exceeded RMB 130 million. On this basis, although it is difficult to ascertain the specific contribution of factors other than the patented technology in this case to the profit of the infringing product, considering that Aux Company repeatedly infringed Gree Company’s same patent, the subjective infringement was intentional and the infringement was huge, and the circumstances were serious. Gree Company’s claim for compensation of RMB 40 million did not exceed the reasonable limit and was given full support. In view of the fact that Gree Company's patent in the case has expired, the injunction was revoked.
 
【Typical meaning】
 
In intellectual property litigation, the problem of "difficulty in proof" exists within a certain range. For evidence such as financial data held by the infringer, the court may order the infringer to submit it to find out the profit from the infringement. When determining whether the accused infringer constitutes an obstacle to the production of evidence, the court shall focus on examining whether the evidence submitted by the accused infringer meets the form and scope of the documentary evidence submission order. In the case where the infringer only submits part of the evidence, the court shall review whether he has a valid reason and whether it can be found out that he has made all the profits based on the part of the evidence. If it is determined that it constitutes an obstacle to the production of evidence, the court may determine that the infringement is profitable based on the claim and the evidence provided by the right holder.
 
The nature and circumstances of the infringement are closely related to the amount of compensation determined by the court, and the subjective factors of the infringer are also important considerations for the court to determine compensation. The comprehensive review of objectively externalized infringement acts is the basis for judging the infringer’s subjective infringement intention. If the infringer has been found to have infringed the patent right in the previous case, and then only simply changed and replaced the accused infringing product, but still infringed the same patent right, it can be determined that the infringement is intentional and obvious based on other factors of the case. Furthermore, “punitive” factors shall be appropriately considered in the discretionary compensation to demonstrate the judicial orientation of respecting the intellectual property rights of others, respecting judicial judgments, and operating lawful and honest.

Member Message


Only our members can leave a message,so please register or login.

International IP Firms
Inquiry and Assessment

Article Search

Keywords:

People watch

Online Survey

In your opinion, which is the most important factor that influences IP pledge loan evaluation?

Control over several core technologies for one product by different right owners
Stability of ownership of the pledge
Ownership and effectiveness of the pledge