Kangxin represents Hallys winning the patent infringement litigation with 3 million compensation
date: 2021-06-09

    In 2017, Hallys Corporation (hereinafter referred to as "Hallys") discovered that the glass process product manufactured and sold by the Korean incorporation PDT Co., Ltd. (hereinafter referred to as "PDT") was suspected of infringing Hallys's patent right. Hallys entrusted Kangxin to take legal actions against PDT. Almost 3.5 years later, Hallys ultimately won the first instance litigation, and Guangzhou Intellectual Property Court ruled that PDT's product falls into the protection scope of Hally's patent, and ordered PDT to stop their infringing behavior and pay compensation with the amount of 3 million RMB to Hallys. The details of this case are introduced as follows.

    On June, 2017, Hallys discovered PDT exhibited a glass process product on a exhibition in Shenzhen, China, which was suspected of infringing Hallys's patent right. Hallys obtained the marketing materials and recorded the advertising video in the exhibition. Hallys further obtained the information that PDT's products have been sold to one of Hallys's clients, a Chinese company in Dongguan. Then Hallys contacted Kangxin seeking for legal suggestions on taking legal actions against PDT. The patent infringement litigation was filed before Shenzhen Intermediate Court on August, 2017. The alleged product is in quite a huge volume, and the sales price is approx. 3 million. It is not feasible to purchase the product for patent infringement analysis. Considering the cooperation relationship with the Dongguan company, we negotiated with them for a long period trying to convince them to help Hallys notarize the technical solution of PDT's product, but were refused.

    For collecting necessary evidence for the litigation, we had to apply for evidence preservation before the court, which was also rejected since lack of forceful evidence. We then dropped the case.

    On July, 2018, Hallys visit the Dongguan company together with the notaries; however, due to their serious management, Hallys only took photos of appearance of the product and logo of PDT shown on the computer.

    Hallys has done their best efforts for evidence collection, and then filed the patent infringement litigation before Shenzhen Intermediate Court again on October, 2018. Meanwhile, the evidence preservation application was filed. After the court accepted the case, we conducted several rounds of communication with the judge and introduced the features of the products and the difficulties of evidence collection. We also briefly introduced the technical solution protected by Hallys's patent to explain that it will be sufficient by taking photos and videos, which will not cause damages to the product. The court then finally supported our evidence preservation application. We visit the Dongguan company with the court for evidence preservation. The Dongguan company stated that 10 products in total were purchased, so Hallys changed the claims in the litigation and increased the compensation amount to 3 million RMB.

    Due to the model of the alleged product, the case was transferred to Guangzhou Intellectual Property Court for trial. During the court hearing, patent infringement comparison was conducted based on the photos and videos taken during the evidence preservation. However, PDT described different working process about their own products, so the court considered it necessary to conduct on-site inspection again to confirm some details of the alleged product.

    Both of the parties then visit Dongguan company again with the judge on November, 2020. There was fortunately one product not under operation, and the judge observed the detailed structure of the product. The judge also requested the Dongguan company to offer the purchase contract of the alleged product, which revealed that the sales price was over USD 0.5 million per product.

    On January, 2021, we received the judgment issued by Guangzhou Intellectual Property Court, which ruled that PDT's product falls into the protection scope of Hally's patent and  ordered PDT to stop their infringing behavior and pay compensation with the amount of 3 million RMB to Hallys.

    It took nearly 3 years for Hallys to receive this ideal judgment from they discovered the infringing behavior, and the main challenges is the property of large size and high price of the infringing products. In practice, it is quite difficult for the patentee to collect sufficient evidence to prove the infringement, and it will be quite significant to convince the court to conduct evidence preservation.

    According to Article 11 of Several Provisions of the Supreme People's Court on Evidence in Civil Procedures Involving Intellectual Property Rights, people’s court should consider the facts while dealing with the party’s application of evidence preservation, which are: (1) If the applicant has submitted preliminary evidence for their assertion; (2) If the evidence can be collected by the applicant; (3) Possibility that the evidence is lost or difficult to obtain, and its effect; (4) Influence on the party who holds the evidence.

    Therefore, it is still necessary to submit preliminary evidence about infringement while applying for evidence preservation. In a similar case, our investigator also conducted investigation against the infringing products before filing the litigation.

    In conclusion, regarding applying for evidence preservation, it is still a necessary and significant step for the patentee to conduct investigation on their own. During the investigation, the patentee should try to collect evidence that some key technical features of their patent are included in the infringing products, the identity of the infringer, and the location where there is the infringing products, etc.