China’s top 20 patent cases of 2020: Vaten & Zhongshan Silk Imp. & Exp. Group v. SEB S.A.

China IP,[Patent]

 

Docket number of the case in the first instance: No. 1212, first instance (初), civil case (民), (2017) Guangzhou Intellectual Property Court (粤73)
Docket number of the case in the second instance: No. 581, second instance (终), civil case (民), (2019) IPR Division of the Supreme People's Court (最高法知)
 
[Prefatory Syllabus]
For semi-finished products lacking key parts that are suspected of infringement on the patent right, tort can be presumed according to common sense; for suspected products without type indicators of infringement on the patent right, tort can be presumed according to the preponderance of evidence rule.
 
[Basic Facts]
Appellant (Defendant in the case in the first instance): Zhongshan Vaten Electrical Appliances Co., Ltd. (hereinafter, “Vaten”)
Appellee (Plaintiff in the cases in the first instance): SEB Corporation (SEB S.A.)
Defendant in the cases in the first instance: Zhongshan Silk Imp. & Exp. Group Co. Ltd. of Guangdong
 
SEB S.A. is the market leader of electric kitchenware in the global home appliances industry, and the patentee of the Chinese invention patent involved in the case (Patent No.: ZL200780001511.3, Name: Cooking Utensil with Stirrer and Relevant Using Method). This patent was granted and announced on November 9, 2011, and remains in effect. The “air” fryer, produced based on the patent involved in the case, was quickly favored by consumers in the global market upon launch. At present, its global cumulative sales have totaled tens of millions (sets).
 
At the 118th China Import and Export Fair on October 16, 2015, SEB S.A. found that a type of air fryer manufactured by Vaten on display at a booth of a company in Fuyuan City was suspected of infringing upon the patent right involved in the case. SEB immediately organized a notarization of the booth, and obtained a copy of Vaten’s product catalog onsite, which indicated that the infringing product types of Vaten are “VTDA15-1” and “VTDA15-2”. Subsequently, SEB S.A. submitted a complaint to the complaint reception station of China Import and Export Fair on the infringement of the booth. Upon receipt of this complaint, the station immediately carried out an inspection on the booth onsite, and ordered the exhibiting company to immediately remove infringing products from the booth after confirming that the products are suspected infringing products. On December 15, 2015, SEB S.A. visited Vaten’s factory, and purchased four sets of “VTDA1500-2” air fryers that infringed upon the patent right onsite in the presence of a notary. On December 19, 2015, at the request by SEB S.A., Gongbei Customs District P.R. CHINA seized 630 sets of “RAF-143” air fryers that infringed upon the patent right, which were manufactured by Vaten and declared for export by a Zhongshan Company. SEB S.A. conducted onsite notarization of the infringing products seized at the Zhongshan Customs Cargo Inspection Platform. On March 15, 2016, at the request of SEB S.A., Gongbei Customs District P.R. CHINA seized 1,500 sets of “FA1-15B” semi-product air fryer that infringed upon the patent right, which were manufactured by Vaten and declared for export by a Zhongshan Company. To evade customs seizure, this batch of air fryers were not equipped with food containers. At the 118th China Import and Export Fair on April 16, 2017, SEB S.A. found once again that a type of air fryer manufactured by Vaten on display at a booth of a company in Guangdong was suspected of infringing upon the patent right involved in the case. It immediately organized a notarization of the booth, and obtained a copy of Vaten’s product catalog onsite, which indicated that the infringing product types of Vaten are “VTDA1500-01” and “VTDA1500-02”. On June 2, 2017, SEB S.A. visited Vaten’s factory, and notarized and purchased two sets of air fryers that infringed upon the patent right onsite. Type “VTDA1500-2” is indicated on the outer package of these two air fryers, while “VTDA1500-1” on the purchase invoice and receipt. According to the outer package, the court finally determined that the infringing product type was VTDA1500-2. On June 6, 2017, SEB S.A. conducted a notarization of Vaten’s store at Alibaba.com, and find the “VTDA1500-01” and “VTDA1500-02” infringing products were displayed on the store.
 
On the ground of the evidence and facts mentioned above, SEB S.A. filed a lawsuit with Guangzhou Intellectual Property Court, alleging that eight products of Vaten infringed upon the patent rights involved in the case. Physical products of VTDA1500-2 and RAF-143 were submitted, while semi-finished product of FA1-15B was submitted to the court. In the first instance, Guangzhou Intellectual Property Court ruled that the other seven products except VTDA1500-1 constituted infringement, and ordered Vaten to indemnify SEB S.A. RMB 1.1 million.
 
Vaten refused to accept the verdict of the first instance, and appealed to the Supreme People’s Court. Judgment of the second instance of the Supreme People’s Court: Dismiss the appeal and uphold the original judgement.
 
The attorneys of Beijing Wanhuida Law Firm, who acted as the agent of the plaintiff in the first trial and the appellee (SEB S.A.), participated in the proceedings of the first and second instances.
 
[Typical Significance]
This is a complicated case of patent infringement involving different types of infringing products. The patentee has a high burden of proof on the facts of the case. The patentee and his agent established a complete and stable evidence network of mutual verification by various means such as organizing onsite notarization at the exhibition, exhibition complaint, customs seizure and purchase in the presence of a notary, laying a solid foundation for winning the lawsuit.
 
This case is relevant for similar cases in terms of determination of infringement and compensation. According to the court’s judgement, for semi-finished products lacking key parts, tort can be presumed according to common sense; for products without type indicators, tort can be presumed according to the preponderance of evidence rule; in addition, the court, based on a consideration of multiple factors, including patent value, price of patented products, average profit rate of the home appliances industry, scale of operation of the infringing party, infringement malice, etc., determined the maximum legal compensation of RMB 1 million and a reasonable expenditure of RMB 100,000 in the end.
 
The evidence for this case was collected from one complaint to China Import and Export Fair, two onsite notarizations of China Import and Export Fair, two purchases in the presence of a notary and two custom seizures, with a duration of nearly two years. The infringement involved in this case is multi-faceted and hard to verify; the infringing products involve many types; and the case is complicated. The courts of the first and second instances have, based on rigorous evidence submitted by SEB, ruled that the seven different types of products involved all constituted infringement, and ordered Vaten to make the maximum legal compensation which effectively protected the patent rights involved. This case was granted the title of “2020 Excellent Case” by the French Manufacturers Federation.

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