Patent practice - Judgment reversed: Jiaquan wins second instance of patent infringement dispute

Yichang Fu | Apr 28, 2021

LAITRAM, LLC is the owner of Chinese invention patent No. 2010101503495, titled “Plastic Conveyor Belt Module”. Intralox, LLC (“Intralox”) is the exclusive licensee of this patent in China.

On October 13, 2016, Intralox brought a suit against Jiaquan’s client SHENZHEN HONGSBELT (“HONGSBELT”) in the Shanghai Intellectual Property Court for infringing the above patent. On June 27, 2017, the court issued a judgment holding that the accused products fell within the scope of Claim 5. HONGSBELT was sentenced to pay economic damages of CNY 350,000 (USD 54,500). HONGSBELT disagreed with the judgment and appealed to the Shanghai Higher People's Court. On March 26, 2021, the Shanghai Higher People's Court issued its final judgment, reversing the judgment of the first instance and dismissing the lawsuit filed by Introlox. After 5 years of effort, Jiaquan successfully helped HONGSBELT win this case.

In their lawsuit, Intralox alleged that the accused products fell within the scope of Claims 3, 4, and 5 of the patent in question. Following careful analysis of the patent, Jiaquan’s team found that the scope of Claim 3 is extremely broad; it covers a "key-lock structure fixes the orientation of the rotation axis". Although the accused products bear certain similar technical characteristics, the "key-lock structure" in Claim 3 was essentially a functional technical feature. According to relevant patent judicial interpretation, the scope of protection should be determined by the specific implementation of the specification. Obviously, the accused products were inconsistent with the specific implementation of the specification. The defense of non-infringement raised by Jiaquan based on functional technical features was supported by the court in the first instance. The court held that the accused products did not fall within the scope of Claims 3 and 4.

Nevertheless, the court of the first instance held that the accused products fell within the scope of Claim 5 which remained valid after the first invalidation proceeding. When confronted with this unfavorable situation, Jiaquan’s team conducted in-depth analyses, developed a new litigation strategy, and proposed a combination of second invalidation and suspension of the trial. In the second trial, Jiaquan’s team explained, with sufficient evidence and detail, that Claim 5 was unstable. This effectively convinced the panel that the possibility of invalidating Claim 5 was very high. The panel ruled to suspend the case, providing sufficient time for a second invalidation proceeding.

In the second invalidation proceeding, faced with the prior art references identified by Jiaquan’s team and their argument targeting the inventive steps, the patentee was forced to amend and narrow down Claim 5. Following examination, the China National Intellectual Property Administration invalidated the amended Claim 5. According to the patent law, if a claim is invalid, there can be no infringement. Thus, the Shanghai Higher People’s Court reversed the judgment of the first instance and dismissed the lawsuit filed by Intralox.

Faced with a tough obstacle, Jiaquan’s talented team rose to the challenge. They developed and implemented effective litigation strategies, eventually winning the case through their unremitting efforts.

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