Guangzhou IP Court Issued Its First Preliminary Injunction on Patent Case

On June 22, 2016, Guangzhou IP Court issued its first Preliminary Injunction on patent infringement case since its establishment in December 2014, ordering Guangzhou Wentan Trading Co., Ltd. (hereafter referred as “respondent”) to stop making, selling, offering for sales 9 models of lipstick product and ordering Guangzhou Beiningfei Co., Ltd. (hereafter referred as “respondent”) to stop making 9 models of lipstick based on the petition filed by Christian Louboutin. This is the first preliminary injunction issued by Guangzhou IP Court on patent infringement case.

Christian Louboutin (hereafter referred as “claimant”) is the patentee of the series of design patents with title “Cosmetic cover”, “Cosmetic container” etc. but the patented products have not been put into market in China. The claimant discovered that the respondents made, sold and offered for sales 9 models of lipstick products identical or similar to the design patents of the claimant. The claimant filed a petition for preliminary injunction before Guangzhou IP Court.

After hearing, Guangzhou IP Court considered the case from the following six aspects:
1. Is the patent valid? Is the patent strong (stable)?
2. Does the respondents’ act constitute infringement?
3. If the preliminary injunction is not issued, will it cause irreparable damage to the claimant?
4. If the preliminary injunction is issued, will damage caused to the respondent smaller or equal to the damage to the claimant if preliminary injunction is not issued?
5. Will the preliminary injunction be harmful to public interest?
6. Is the bond provided by the claimant valid and appropriate?

The Court believes that:
1. Validity and stability of patent are the basis of petition of preliminary injunction. The patent is currently valid and it is relatively stable;
2. In the examination of petition for preliminary injunction, it is necessary to access the likelihood of infringement. It is decided that 9 models of the lipstick product falls within the scope of protection of the patent;
3. When assessing the irreparable damage to the claimant, the court should take into consideration damage to the reputation of the claimant, infringer’s ability to pay for the damage, the possibility of calculating the damages etc. In this case, the respondent fails to prove that it manages to sufficiently pay for the damage based on its property status. Not issuing preliminary injunction will cause permanent loss of market share and shorten the life cycle of the patented product. Therefore, there exists urgency of stopping the infringement and it will cause irreparable damage if preliminary injunction is not issued.
4. Evaluation of both sides’ interest should be considered. In this case, damage caused to claimant if preliminary injunction is not issued is apparently greater than the loss caused to the respondent if preliminary injunction is issued.
5. In terms of public interest, since the product in this case is a cosmetic product, preliminary injunction will not be harmful to public interest.
6. When filing the petition of the preliminary injunction, the claimant should provide bond for damage caused to the respondent if the preliminary injunction is issued wrongfully. Considering the argument of both sides on the among of bond, high likelihood of obtaining favorable judgment, low possibility of issuing wrongful injunction and the fact that three patents related to one product, the amount of bond is decided.

In conclusion, the Court issued preliminary injunction, ordering Guangzhou Wentan Trading Co., Ltd. (hereafter referred as “respondent”) to stop making, selling, offering for sale 9 models of lipstick product and ordering Guangzhou Beiningfei Co., Ltd. (hereafter referred as “respondent”) to stop making 9 models of lipstick.

Source: Guangzhou IP Court

Guangzhou IP Court

Guangzhou IP Court was established on December 16 as one of the three IP Courts in China (Guangzhou, Beijing and Shanghai). These three specialized courts make up China's first batch of pilot IP courts. Guangzhou IP Court commenced operation on December 21, 2014. It has jurisdiction over the following cases: - First-instance IP civil or administrative cases relating to patents, new varieties of plants, integrated circuit layout designs, technological know-how, or computer software as well as first-instance civil cases involving recognition of well-known trademarks within Guangdong province with the exception of Shenzhen (i.e. courts of Shenzhen retain jurisdiction over IP-related cases); - First-instance administrative cases brought against copyright, trademarks or unfair competition related administrative acts taken by Guangzhou municipal government or district governments of Guangzhou; - Other IP civil or administrative cases of the first instance which should otherwise be heard by intermediate courts in Guangzhou, and appeal cases brought against first-instance judgments or rulings of IP civil or administrative cases relating to copyright, trademarks, technology contracts, unfair competition, and other intellectual property rights made by basic courts in Guangzhou. Guangzhou IP Court houses four tribunals, comprising a case filing chamber, a patent tribunal, a copyright tribunal, and a trademark and competition tribunal, as well as a general office, a technical research office, and a judicial police team. It has appointed 10 judges through a province-wide open selection process. As of December 21, 2014 when Guangzhou IP Court started operation, the basic and intermediate courts in Guangdong province (with the exception of those in Shenzhen) have ceased accepting first-instance IP civil and administrative cases relating to patents, new varieties of plants, integrated circuit layout designs, technological know-how, or computer software as specified in paragraph 1, item 1 of the Provisions of the Supreme People's Court on the Jurisdiction of Intellectual Property Courts of Beijing, Shanghai and Guangzhou. However, for any of the aforementioned cases lodged or appealed to any of the said courts on or before December 20, 2014, where the case has been accepted but is still pending, it remains to be handled by the respective court.