GESC and Beijing Edgein: Landmark Cases in Melamine Patent and Trade Secret Infringement Recognized by High Court

Time:2023-03-30

In order to further summarize and play a positive role in typical cases, effectively increase intellectual property protection, and maintain fair competition in the market, the Supreme People's Court selected 20 typical cases from 3468 technical intellectual property and monopoly cases concluded in 2022 on March 30, 2023. Among them, GESC nxiang Sairui Chemical Co., Ltd., Beijing Edgein Technology Co., Ltd., Shandong Hualu Hengsheng Chemical Co., Ltd., Ningbo Houcheng Management Consulting Co., Ltd., Ningbo Antai Environmental Chemical Engineering Design Co., Ltd., and Yin Moumou's infringement of invention patent rights and infringement of technical secrets disputes were included in the "Typical Cases of Patent Civil Cases". The details are as follows:

[Case Number] Final Civil Case Judgment No. 1559 issued by the Supreme People's Court in 2020, and Final Civil Case Judgment No. 541 issued by the Supreme People's Court in 2022

【 Basic Case 】 GESC and Edgein Company are the patent holders of the invention patent with the patent number 20110108644.9 and the name "Energy saving and Energy saving Gas phase Quenching Method Honey Amine Production System and Process". GESC is also the patent holder of the technical secrets related to the method of producing honey amine by pressurized gas phase quenching method and the production system using this method. GESC and Edgein Company have filed a lawsuit with Guangzhou Intellectual Property Court against four defendants, including Hualu Hengsheng Company, for infringing on the patent rights involved in the case. GESC has also filed a lawsuit with the Chengdu Intermediate People's Court in Sichuan Province against the four defendants for infringing on technical secrets. The two courts respectively determined in the first instance that the four defendants jointly committed patent infringement and technology secret infringement, and all ruled to stop the infringement and partially supported the relevant claims for damages. Both parties are dissatisfied with both cases and have appealed. In the second instance, the High People's Court held that the accused infringers had the intention of infringing, subjectively knew each other, and successively committed corresponding infringing acts, forming a complete chain of infringing acts. Objectively, they divided labor and cooperated, and jointly and deliberately committed infringing acts, and should bear joint and several liability for all infringing damages. Therefore, the judgment was changed to support all the claims of the rights holder, and the infringer was ordered to destroy the infringing production system and related technical secret carriers by including but not limited to dismantling, jointly and severally compensating the rights holder for a total economic loss of 218 million yuan (including 120 million yuan for invention patent infringement cases and 98 million yuan for technical secret infringement cases.

This is a typical case of intellectual property infringement where the people's court has awarded high compensation for the same engineering project. The rights holder GESC is a Sino foreign joint venture, Edgein Company is a high-tech private enterprise, and one of the infringers, Hualu Hengsheng Company, is a state-owned listed enterprise. The judgments of the two cases not only demonstrate the firm attitude of the people's courts in strengthening the judicial protection of intellectual property rights, but also fully reflect the integrated treatment and equal protection of various types of enterprises such as domestic and foreign-funded enterprises, state-owned and private enterprises. The determination of joint intentional infringement and full joint liability, considerations for calculating compensation amount, and the handling method of destroying infringing carriers in the cessation of infringement liability in this case have reference significance for the handling of similar cases.

The cases released by the Supreme People's Court this time mainly involve the following four aspects:

One is to increase the protection of intellectual property rights and better stimulate innovation and creativity. In the two cases of infringement of the invention patent and technical secrets of "melamine", it was determined that the joint infringers constituted joint intentional infringement and were jointly liable for all joint and several damages, with a total amount of 218 million yuan awarded. In the two cases of infringement of the "YA8201" corn plant new variety, punitive damages were strictly and highly applied, and the person who lent the crop seed production and operation license was ordered to bear joint and several liability. In the utility model patent infringement case of "fixed anchor bolt", based on the infringer's self promotion performance, the patent owner's claim for compensation is fully supported, reflecting that even small patents can be awarded high compensation. In the necessary patent infringement case of the "expansion joint device" standard, the focus is on the fault of the parties involved and fully supports the claim for compensation by the rights holder. In the case of infringement of technology secrets in "oil and gas microbial exploration", it was found that the infringer had obvious fault and the infringement directly determined the business opportunity. All profits were judged as infringement profits and compensated, which made the infringer lose more than they gained and gave the right holder a sense of justice. In the case of infringement of the parent plant new variety of "Caitiannuo 6" hybrid corn, the producer who repeatedly uses the authorized variety's reproductive materials to produce another variety's reproductive materials is ordered to stop selling the other variety's reproductive materials, effectively extending the protection of variety rights and providing full chain protection for breeders. In the two cases where the invention patent rights of "levometronidazole" are invalid, the criteria for determining the creativity of compound pharmaceutical use patents are clarified. In the two cases where the patent rights of "gasifier dust removal device and system" are owned, the basis for obtaining rights by the technology source and improvement party is reasonably defined, and innovation is accurately identified and protected.

The second is to explore new paths to solve the problem of safeguarding rights and protect innovation in innovative ways. In the first drug patent linkage litigation case in China, legal application guidelines in line with legislative purposes were provided to address new issues in the operation and practice of the new system. In the utility model patent infringement case of "Dynamic Password USB Cable", actively guiding both parties to voluntarily make future benefit compensation commitments in response to the uncertainty of the results of the patent confirmation process, with the administrative procedures for the involved patent already initiated, not only effectively promoting the case trial process, but also properly balancing the substantive interests of the parties involved. In the case of infringement of technical secrets of the new hybrid maize plant variety parent "W68", the conditions for protecting commercial secrets of breeding results are clarified, and a new path for legal protection of breeding innovation is expanded. In the infringement case of the "Yang's Golden Red No.1" kiwi plant new variety, we support and encourage the parties to use licensing fees instead of stopping the infringement lawsuit, effectively safeguarding the legitimate rights of the variety owner while reasonably balancing the economic interests of the growers. In the "Youkeduo" mini program source code technology secret infringement case, the comprehensive consideration factors for determining the commercial value of technical secrets are clearly defined. In the two cases of patent rights and patent application rights for the "Suture Device and Suture Needle Kit", a comprehensive mediation agreement was reached to substantially resolve the related disputes between the two parties over the years.
The third is to uphold the principle of equal protection and create a market-oriented, rule of law, and international business environment. In the two cases of infringement of the invention patent and technical secrets of "melamine", it was found that state-owned listed enterprises infringed on the intellectual property rights of Sino foreign joint ventures and high-tech private enterprises, and were awarded high compensation, reflecting equal treatment of domestic and foreign-funded enterprises, and state-owned and private enterprises. In the two administrative rulings on patent infringement of the invention "Rivaroxaban", we uphold the judicial concept of strictly interpreting exceptions to administrative approval for drugs and medical devices, and protect the legitimate rights and interests of foreign parties in accordance with the law. In the invalidation case of the "Card Metaphor for Activity in Computing Devices" invention patent, the intellectual property litigation cases involving two well-known multinational technology companies, Apple and Qualcomm, were lawfully tried to help create a business environment.

The fourth is to strictly regulate various monopolistic behaviors and maintain a fair competition order in the market. In the case of abuse of market dominance in the exclusive authorization of images related to the Chinese Super League, clarify the anti-monopoly judicial review standards in the exclusive authorization of commercial rights for sports events, clarify the legal boundaries of the exercise of exclusive civil rights, and ensure the legitimate operation of enterprises. In the case of abuse of market dominance by water supply and drainage public enterprises to restrict trading, implicit restrictive trading behavior should be regulated in accordance with the law, actively responding to people's concerns. In the follow-up lawsuit of General Motors' vertical monopoly agreement with limited resale price, effectively reducing the burden of proof for the plaintiff in subsequent litigation. In the administrative penalty case of horizontal monopoly agreement for collaborative behavior of concrete enterprises in Maoming, the standard for determining the calculation period of anti-monopoly administrative penalty base is clarified to promote the uniformity of anti-monopoly law enforcement judicial standards and enhance the judicial synergy of anti-monopoly law enforcement.

Part of the content is reproduced from the Intellectual Property Court of the Supreme People's Court.

Keywords: GESC and Beijing Edgein: Landmark Cases in Melamine Patent and Trade Secret Infringement Recognized by High Court

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