Wuhan Jingyuan v. Fujikasui, Huayang

On December 21, 2009, the Supreme People’s Court of P.R.C. (SPC) made the judgment of second instance, i.e. the final judgment in the case that Wuhan Jingyuan Environment Tech. Co. Ltd.(Wuhan Jingyuan) sued FUJIKASUI ENGINEERING CO. Ltd. (Fujikasui), Huayan Electric Power Co. Ltd. (Huayang) for infringement of the patent.

The SPC affirmed the judgment of the Fujian Higher People’s Court (Fujian Higher Court) in respect of the stopping of the defendants’ infringement, the amount of compensation for damages of Wuhan Jingyuan and the royalties of the patent and changed the decision of the Fujian Higher Court in which Fujikasui, should solely pay Wuhan Jingyuan 50.6124 million yuan RMB ( 7.4 million USD) in compensation into that the two defendants in the original trial, Fujikasui and Huayang jointly compensate Wuhan Jingyuan for damages.

The appellant (the plaintiff in the original trial), Wuhan Jingyuan, filed the patent application titled “an aeration seawater FGD process and an aeration device on December 22, 1995 and obtained the patent No. ZL95119389.9 (hereafter referred to as the patent).

In September, 2001, Wuhan Jingyuan sued Fujikasui and Huayang at the Fujian Higher Court against the infringement of the patent.

Fujikasui argued that the patent of Wuhan Jingyuan has been known to the public and publicly used before the filing date of the patent. The patented process and device of Whhan Jingyuan is invalid. The seawater desulphurization equipment of Huayang is designed and built by Fujikasui on its own.

Huayang, argued that the patent should be invalidated. Huayang used the process, technology and device known to the public. Huayang did not infringe the patent of the plaintiff. Huayang trusted Wuhan Jingyuan to make the feasibility study of the FDG project and paid to Wuhan Jinghua the fees for the feasibility study. Huayang does not know it may involve the infringement of the patent, which does not constitute infringement according to the law.

In the proceeding, Fujikasui had submitted the request for invalidation of the patent to the Patent Reexamination Board of SIPO. Upon the examination in the invalidation procedure and then in the administrative proceeding at the Beijing No. 1 Intermediate People’s Court and the Beijing Higher People’s Court, the effectiveness of the patent was finally maintained.

Upon the request of Wuhan Jinghua, the Fujian Higher Court trusted the Huake Judicial Examination Center for Intellectual Property to make technical appraisal. The technical appraisal conclusion is that compared with the solution defined in the claim 1 of the patent, the two technical solutions as a whole belong to the same solution under the Patent Law. Compared with the claim 5 of the patent, some of the features of the desulphurization process and technology of Huayang are identical to the corresponding technical features of the technical solution defined in the claim 5. Some of the features of the said desulphurization process and technology are equivalent to the corresponding features defined in the claim 5. The two technical solutions as whole are of equivalence.

In September, 2008, the Fujian Higher Court made the judgment of first instance which mainly includes:

1. Fujikasui immediately stops the act of infringements.
2. Fujikasui pays Wuhan Jingyuan 50.6124 million yuan RMB ( 7.4 million USD) for damages.
3. Huayang pays the royalty fees of the patent (24 thousand yuan RMB (3.5 thousand USD) per unit per year) to Wuhan Jingyuan based on the duration of actual use, until the term of the patent expires.
4. The plaintiff’s other claims was rejected.

After receiving the judgment of first instance, Wuhan Jingyuan, Fujikasui and Huayang respectively filed an appeal to the SPC against the judgment of the first instance.

In November, 2009, the enlarged intellectual property collegial panel of the SPC which is comprised of 5 judges publicly heard this appeal case. More than 200 people sit in on the hearing..

Controversies in the appeal case focus on the following key issues:

1.Whether the accused desulphurization process and aeration equipment fall into the protection scope of the patent?
2.Whether the prior art defense of Fujikasui and Huayang is tenable?
3.How do Fujikasui and Huayang bear their civil liability?

Regarding the key issues 1 and 2, the SPC held that the accused process and equipment fall into the protection scope of the patent and the prior art defenses of Fujikasui and Huayang are untenable, because that Fujikasui and Huayang did not produce evidence to prove the differences between the accused technical solution and the prior art.

Regarding the key issue 3, the SPC held that Fujikasui and Huayang jointly carry out infringement act. Therefore, they should jointly bear the civil liability in accordance with the law.

Finally, The SPC affirmed the said items 1, 3 and 4 in the judgment of first instance and changed the said item 2 into that Fujikasui and Huayang jointly pay Wuhan Jingyuan 50.61 million yuan for damages.

2010-1-22