China’s top 20 patent cases of 2020: Dajiang v. FIMI

China IP,[Patent]

 

Docket number of the case in the first instance: No. 1668, first instance (初), civil case (民), (2020) Shenzhen Intermediate People’s Court (粤03) 
 
[Prefatory Syllabus]
Where the fact of patent infringement has been ascertained, and the facts of tort damages need to be further investigated, the court may, on its own initiative, make an advance judgment to stop infringement acts, and issue a temporary injunction at the request of the party concerned. In this case, the patent adjudication method of “advance judgment + temporary injunction” may apply.
 
[Basic Facts]
Plaintiff: DJ-Innovations (Hereinafter, “DJI”)
Defendant: Beijing FIMI Technology Co., Ltd. (Hereinafter, “FIMI”), Beyondsky Technology (Shenzhen) Co., Ltd. (Hereinafter, “Beyondsky”)
 
Launched in 2018, DJI Pocket Camera was highly favored across the market, and won the gold medal at the 21st WIPO-CNIPA Award For Chinese Outstanding Industrial Design. Finding that FIMI’s “Palm Gimbal Camera” infringed upon its patent rights, DJI filed a patent protection lawsuit, requesting FIMI to stop infringement acts and pay a compensation of RMB 5 million. DJI also applied to the court for investigating and verifying FIMI’s sales data, and issuing a temporary injunction. FIMI and Beyondsky hold that, without concrete evidence for compensation, DJI’s claim for compensation of up to RMB 5 million shall not be supported.
 
The Intermediate People’s Court of Shenzhen, Guangdong Province ruled that FIMI and Beyondsky had infringed upon DJI’s patent right for the appearance design involved, and shall bear civil liabilities for stopping infringement acts and compensating for losses. Article 153 of the Civil Procedure Law provides that, when a people’s court hears a case, if some facts are already clear, that part may be adjudicated first. Whereas the fact that the defendant FIMI and Beyondsky infringed upon the plaintiff DJI’s patent right of the appearance design involved has been ascertained, the court made an advance judgment on the part where the infringement shall be stopped. Regarding the claim for compensation for losses, as DJI changed the amount claimed, submitted an application for investigation and evidence collection requesting to verify the sales amount of the alleged infringing products, and requested the defendants, FIMI and Beyondsky, to submit their sales data and financial books, the trial for such claim shall continue after obtaining clear facts upon investigation, and an adjudication document shall be separately prepared. Therefore, the court ruled that FIMI and Beyondsky shall immediately stop their infringement acts. Since FIMI and Beyondsky didn’t appeal after the advance judgment was made, and the advance judgment has gone into effect.
 
With respect to DJI’s request for a temporary injunction, the court held that DJI’s patented products involved had gained certain market popularity. If the alleged infringing products are sold in the market at a low price, the market value and popularity of the patented products involved will be severely derogated, which will seriously weaken the market competitive advantage of the patented products involved. The patented products involved are time-sensitive updated iterative products. If the alleged infringing products have infringed on the patented products involved at the initial stage of open sales, it will directly affect the market sales share of the patented products involved, and incur irreparable economic losses to DJI. On this ground, the court ruled that FIMI and Beyondsky shall immediately stop infringement. This ruling shall be executed immediately upon issuance. Since FIMI and Beyondsky didn’t apply for reconsideration within five days upon receipt of the written verdict, this temporary injunction has gone into effect.
 
[Typical Significance]
This case is the first of its kind in China to make an “advance judgment + temporary injunction” in a patent case. The court made it clear for the first time in a patent judgment that, where the fact of patent infringement has been ascertained, and the facts of tort damages need to be further investigated, the court may, on its own initiative, make an advance judgment to stop infringement acts, and separate the identification of patent infringement from tort damages in its trial. Where the advance judgment of the first instance has not yet gone into effect and doesn’t have enforceability, the court may, at the request of the party concerned, co-apply the advance judgment ordering the cessation of the infringement of patent rights with the temporary injunction system, so as to exert the deterrent effect that a temporary injunction can be applied for immediate enforcement, protect patent rights and interests in a comprehensive and effective way, and improve the rigor and effectiveness of judicial protection of intellectual property rights.
 
There’re many problems in the trial of patent cases, such as the great trial difficulty, long cycle and high cost of rights protection. The patent adjudication mode combining “advance judgment + temporary injunction” can, on the one hand, rely on advance judgment to settle disputes, clarify the legal relationship between the parties as soon as possible, and improve the efficiency of patent dispute resolution; and on the other hand, exert the more timely and effective advantages of temporary injunction than the realization of the right to claim damages to skip the long litigation stage for realizing the right to claim damages, protect the interests of the patentee in a timely and effective manner and prevent the expansion of patent infringement damage. This patent adjudication mode observes the inherent law of patent cases.
 
The patent adjudication mode combining “advance judgment + temporary injunction” adopted in this case clarifies the conditions and rules for co-application of the advance judgment and temporary injunction systems, and expounds the value of temporary injunction when the advance judgment ordering the cessation of the infringement of patent rights has not gone into effect, namely: First, it’s required to meet the basic conditions of finding out the facts in advance for the application of advance judgment. When applying advance judgment in civil patent cases, the basic facts of a patent infringement shall be ascertained first. Second, the application of advance judgment shall be necessary and feasible. As the patent involved in this case is of high quality and the facts concerning the compensation calculation still need further investigation, it’s necessary to adopt the advance judgment. At last, the patented products involved are time-sensitive updated iterative products. As the advance judgment ordering the cessation of the infringement of patent rights has not yet gone into effect, it’s unlikely to stop infringement acts in time through the execution of the first-instance judgment, while the temporary injunction has the deterrent effect of being immediately enforceable, it’s necessary to adopt the temporary injunction in this case.

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