On February 26, 2021, the Intellectual Property Tribunal of the Supreme People’s Court released a list of top 10 cases of technical intellectual property rights for 2020 that the tribunal ruled on.  The list covers anti-suit injunctions, trade secret theft, punitive damages, software copyright infringement, utility model infringement, invention patent invalidation, dueling administrative and civil enforcement appeals of patents, integrated circuit layout design infringement, affirmative injunctions and antitrust. 

The top 10 cases, as explained by the IP Tribunal of the Supreme People’s Court, follows:

1. Three cases of “anti-suit injunction” for wireless communication standard essential patents

　　[Case No.] （2019）最高法知民终732、733、734号

　　[Basic case] In January 2018, Huawei filed this case with the Nanjing Intermediate People’s Court, requesting confirmation that it did not infringe Conversant Wireless Licensing’s three Chinese patent rights and requesting confirmation of the license fee rate for standard essential patents in China. In April 2018, in order to counteract Huawei’s lawsuit in this case, Conversant filed a patent infringement lawsuit in the court of Düsseldorf, Germany, requesting an order for Huawei to stop the infringement and compensate for losses. On September 16, 2019, the Nanjing Intermediate People’s Court made the first-instance judgment of this case, which determined the license fee rate for the standard essential patents involved in Huawei and its Chinese affiliates and Conversant. Conversant refused to accept the judgment of the first instance and appealed to the Supreme People’s Court. During the trial of the Supreme People’s Court, on August 27, 2020, the German court made a first-instance verdict that Huawei and its German affiliates infringed Conversant’s European patents and ordered Huawei and its German affiliates not to further infringe. The judgment can be temporarily enforced after Conversant provides a guarantee of 2.4 million euros. On the same day, Huawei filed an application for an injunction with the Supreme People’s Court, requesting that Conversant be prohibited from applying for the execution of the German court’s judgment before the Supreme People’s Court’s final judgment. The Intellectual Property Tribunal of the Supreme People’s Court comprehensively considers factors such as necessity, the balance of profit and loss, and the principle of international comity, and issued an injunction within 48 hours: Conversant shall not apply for the execution of the above-mentioned German judgment before the final judgment of the Supreme People’s Court; if this ruling is violated, then from the date of violation, a daily fine of RMB 1 million (~$154 thousand USD) shall be imposed, which shall be accumulated on a daily basis. Conversant requested reconsideration, and the Supreme People’s Court organized a hearing for both parties and ruled to reject the request. After the ruling in this case was made, the parties concerned fully respected and implemented the ruling in this case while conducting active commercial negotiations, reached a global settlement agreement, ended all parallel litigation in multiple countries around the world, and achieved good legal effects. 

　　[Typical Significance] In the three cases, the Intellectual Property Court of the Supreme People’s Court made the first “anti-suit” injunction ruling in the field of intellectual property by a Chinese court, and pioneered the application of “daily fines” measures to ensure enforcement of injunctions. The rulings of the three cases clarified the applicable conditions and considerations for the  “anti-suit injunction”, made case studies for the establishment and improvement of China’s “anti-suit injunction” system, accumulated useful experience, and effectively safeguarded national interests, judicial sovereignty, and the legal rights and interests of the enterprise.

2. “Vanillin” technology secret high-value judgment case

　　[Case No.] （2020）最高法知民终1667号

　　[Basic case] Jiaxing Zhonghua Chemical Co., Ltd. and Shanghai Xinchen Co., Ltd. jointly developed a process for producing vanillin by the glyoxylic acid method and protected it as a trade secret. The process is safe to implement, easy to operate, and has good effects. Based on this improvement compared with the traditional process, Jiaxing Zhonghua Chemical Company has become the world’s largest vanillin manufacturer, having about 60% of the vanillin global market. Jiaxing Zhonghua Chemical Company and Shanghai Xinchen Company believed that Wanglong Group Company, Wanglong Technology Company, Xifu Lion Wanglong Company, Fu XX, Wang XX used their vanillin production process without permission and violated their technical secrets, Therefore, they filed a lawsuit with the Zhejiang High Court, requesting an injunction to stop the infringement and compensate for economic losses and reasonable expenses of 502 million yuan. The Zhejiang Higher People’s Court determined that the infringement was established, and ordered the suspension of the infringement, compensation of 3 million yuan for economic losses and a reasonable expenditure of 500,000 yuan for rights protection. While making the judgment of the first instance, the Zhejiang Higher People’s Court issued an injunction, ordering Wanglong Technology Company and Xifu Lion King Dragon Company to immediately stop using the trade secrets involved in the case, but Wang Long Technology Company and Xifu Lion King Dragon Company did not stop using them. Except for Wang XX, all parties in this case refused to accept the judgment of the first instance and appealed to the Supreme People’s Court. In the second instance, the amount of compensation requested by Jiaxing Zhonghua Chemical Company and Shanghai Xinchen Company fell to 177 million yuan. The Intellectual Property Tribunal of the Supreme People’s Court, based on the economic loss data provided by the right holder, comprehensively considered factors such as the huge commercial value of the trade secret involved, the large scale of infringement, the long infringement time, and the refusal to respect the injunction, and changed its sentence that defendants must jointly compensate the right holder for economic losses of 159 million yuan. At the same time, the court decided to transfer the suspected criminal evidence to the public security organs.

　　[Typical significance] This case is the case of infringement of trade secrets with the highest amount of compensation in the effective judgment of a court in China. The Intellectual Property Tribunal of the Supreme People’s Court ruled in this case to protect the core technology of important industries in accordance with the law, effectively intensifying the crackdown on malicious infringement, clarifying the joint and several liability of the legal representative of the company that uses infringement  and forwarding the suspected criminal evidence in accordance with the law. The transfer to the public security organs promoted the convergence of civil relief and criminal punishment, and demonstrated the people’s courts’ clear judicial attitude of strictly protecting intellectual property rights in accordance with the law and cracking down on malicious infringement.

3. Case of punitive damages for “Kabo” technical secrets

　　[Case Number] （2019）最高法知民终562号

　　[Basic case] Guangzhou Tianci Company and Jiujiang Tianci Company claimed that Hua, Liu, Anhui Newman, Wu, Hu, Zhu, and Peng infringed their “Kabo” manufacturing process technology secrets and filed a lawsuit with the  Guangzhou Intellectual Property Court  requesting an order to stop the infringement, compensate for the loss, and apologize. The Guangzhou Intellectual Property Court determined that there was theft of trade secret and considering the intentional infringement of the trade secret right and the circumstances of the infringement, applied punitive damages of 2.5 times . Guangzhou Tianci Company, Jiujiang Tianci Company, Anhui Newman Company, Hua Mou and Liu Mou all refused to accept the judgment of the first instance and appealed to the Supreme People’s Court. The Intellectual Property Tribunal of the Supreme People’s Court of the second instance held that there was infringement of the trade secrets involved, but the first-instance judgment did not fully consider the contribution of the trade secrets involved in determining the amount of infringement compensation, and did not fully consider the infringement when determining punitive damages. Specifically, defendant’s subjective maliciousness and evidence obstructive behavior, etc.  The Court maintained the first-instance judgment on cessation of infringement, but increased the applicable punitive damages to 5 times. Anhui Newman Company was sentenced to compensate Guangzhou Tianci Company and Jiujiang Tianci Company for economic losses of 30 million RMB and a reasonable expenditure of 400,000 RMB. Hua, Liu, Hu, and Zhu shall be jointly and severally liable for the aforementioned compensation amounts within the range of 5 million RMB, 30 million RMB, 1 million RMB, and 1 million RMB respectively.

　　[Typical significance] This case is the first punitive damages case made by the Supreme People’s Court. The judgment of the case fully considered the subjective malice of the alleged infringement, the obstruction of proof, the duration of the alleged infringement, the scale of the infringement, etc., applied punitive damages, and finally determined the statutory punitive damages, which is the highest multiple available of 5 times damages. The multiple clearly convey a strong signal to strengthen judicial protection of intellectual property rights.

4. NX computer software copyright infringement case

　　[Case No.] (2020)最高法知民终155号

　　[Basic case] Siemens Software, which is the copyright owner of the NX series of software, filed a lawsuit with the Guangzhou Intellectual Property Court on the grounds that Wolf Company used the software involved in the case to design and manufacture products that constituted infringement. In accordance with the application of Siemens Software, the Guangzhou Intellectual Property Court issued an  evidence preservation order to Wolf. During the period, the Guangzhou Intellectual Property Court served a preservation ruling, explaining in detail the preservation measures to be taken and the legal consequences of refusing to cooperate with the preservation. According to the on-site inventory, there are 26 computers in the design office of Wolf Co. After the Guangzhou Intellectual Property Court preserved 17 computers and found that 9 of them were installed with the software involved, Wolf Co. suddenly took countermeasures by refusing to turn on some computers, cutting off power, stealing court cameras, and preventing court staff from leaving. Such methods hindered the preservation of evidence and forced the termination of the preservation work. The Guangzhou Intellectual Property Court ordered Wolf Company to stop the infringement and ordered Wolf Company to compensate Siemens Software Company for economic losses of 500,000 RMB and 100,000 RMB for reasonable rights protection expenses in accordance with the statutory compensation limit. The Intellectual Property Tribunal of the Supreme People’s Court comprehensively considered Wolff’s infringements, the price of the software involved, and Wolff’s circumstances in this case that prevented the court’s evidence preservation without justifiable reasons, and ruled Wolff to compensate Siemens Software for more than 2.61 million economic losses RMB and a reasonable expenditure of 100,000 yuan for rights protection.

　　[Typical Significance] This case equally protects the legal rights and interests of foreign-related entities in accordance with the law, clarifies the consequences of the litigation participants obstructing the preservation of evidence, and uses the performance of the accused infringer in the litigation as a consideration for determining damages. The decision in this case to increase the penalties for the parties who interfered with the preservation of evidence has important guiding significance for guiding the parties to litigate in good faith.