The Judgment of the Chinese Patent Infringement Case Rendered with Highest Amount of Damages

November 6, 2007

The judgment of the Chinese IP infringement case in the first instance with highest damage claim was rendered in Wenzhou, Zhejiang province on September, 29. Schneider Electric S.A.(hereinafter the “Schneider”), the world leader in the lower voltage electric products business, was ordered by Wenzhou Intermediate People’s Court to cease patent infringement and pay 3. 33 billion RMB as damages to a Chinese private-owned enterprise CHINT Group (hereinafter the “CHINT”).
In August 2006, CHINT, who is based in Wenzhou, China, raised a lawsuit for patent infringement against Schneider Lower Voltage Electrics (Tianjin) Co., Ltd.(the Chinese subsidiary controlled by Schneider with holding 75% shares) and its distributor Ningbo Tax-free Zone Schneider Electrics Co., Ltd. together with its branch office in Leqing, petitioning the court to order Schneider to cease sales of and destroy all its five types of infringing products, as well as claiming damages of 3.33billion RMB, which is the highest amount in damages claimed in the previous IP cases in China.

Schneider insisted that the patent claimed by CHINT should be invalid and also filed an invalidation request against CHINT’s patent with the Patent Reexamination Board of SIPO during the litigation process, which, however, was refused by the Board.

On September 29, 2007, after two oral hearings, several cross-examinations of evidences and the auditing process of sales and profit amount, Wenzhou Intermediate People’s Court rendered the judgment in the first instance, ordering the plaintiffs to immediately cease patent infringement and pay 3.33billion RMB to CHINT within ten days from the effect date of the judgment.

Schneider was not satisfied with the judgment. According to the attorney of Schneider, whether the CHINT’s patent is valid should be the legal basis of this litigation and the refusal decision of Patent Reexamination Board is not the final conclusion on this issue.

Schneider has already appealed against the refusal of the Patent Reexamination Board with Beijing No. 1 Intermediate People’s Court. The court has completed the oral hearing on September 24, 2007 but has not yet rendered the judgment.