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Guest Post: Yes, you can get an injunction in a SEP case in China!

3/31/2017

Today, we have a guest post from my colleague at Beijing East IP, Austin Chang. Austin provides a summary of the IWNCOMM v. SONY standard-essential patent decision by the Beijing IP Court (IWNCOMM v. Sony (2015) Jing Zhi Min Chu Zi No. 1194).

Austin Chang

Plaintiff Xi’an Xi Dian Jie Tong Radio Network Co. (“IWNCOMM”) filed a patent infringement action against Sony Mobile Communication (China) Co., Ltd. (“Sony”) on July 2, 2015 for infringing IWNCOMM’s standard-essential patent (“SEP”) No. ZL02139508.X for a mandatory national WAPI standard. According to the judgment, Sony was ordered to (1) immediately cease infringement of IWNCOMM’s SEP found in 35 of Sony’s mobile handsets, (2) pay damages of RMB8.62 million (approximately USD1.25 million), and (3) pay reasonable litigation costs of RMB474,194 (around USD69,000).

This is a first instance decision and is appealable to the Beijing High Court within 15 days for IWNCOMM (as a domestic entity) and within30 days for Sony (as a foreign entity) upon receipt of the decision. We will continue to provide updates regarding any further developments.

Please see below for the summary of the ruling:

The court found that the report produced by the State Radio Monitoring Center Testing Center (SRMCTC) determining that Sony’s handsets possess the WAPI function shall be deemed as valid, because the SRMCTC is an authoritative national test center, the report submitted by Sony also shows identical results, and Sony failed to provide evidence to prove that the lack of access point and access server specifications influenced the result of the report. Therefore, the report is sufficient to establish that Sony’s handsets possess the WAPI function.
The court also found that Sony implemented testing of the WAPI function. Sony argued that although the Requirement of Quality Control System (“Requirement”) is a national standard, it is merely suggestive and not mandatory. Moreover, Sony also submitted documents showing that it has tested the WAPI function during the development phases. Sony, however, failed to submit documents proving methods used to test the WAPI function other than those stated in the Requirement. The court reasoned that since Sony had admitted it had tested the WAPI function and failed to produce documents to prove this testing was performed other than the Requirement, the court had reason to conclude that Sony followed the Requirement in testing the WAPI function.
The court reasoned that under the current legal framework, patent exhaustion of methods only applies to “products directly obtained following the patented method,” namely, “manufacturing method patents.” Furthermore, the exhaustion doctrine does not apply to a pure “use method patent.” Here, the disputed patent is a use method patent, not a manufacturing method patent. Therefore, IWNCOMM’s use of the manufacturing method patent when selling its detection equipment does not exhaust its patent right.
The court reasoned that even if the disputed patent is a SEP it does not affect the determination of whether there is a patent infringement. Thus, any unauthorized use of a patent, such as in this case, is subject to a determination of patent infringement.
The court reasoned that a patentee’s commitment to a FRAND statement is not equal to a valid licensing agreement. Thus, even if IWNCOMM has committed to license under FRAND terms, this does not mean IWNCOMM actually licensed its patent to Sony.
The court reasoned that, in general, indirect infringement should be based upon the existence of direct infringement. However, this does not require that the patentee prove direct infringement by another party. Rather, the patentee need only prove that the use of the alleged infringing product according to the product’s default use method is covered by the patent’s claims. The issue of whether third-party users should bear infringement liability is unrelated to the establishment of indirect infringement. Here, Sony’s use of the WAPI module has no other substantive use except to implement the disputed patent, thus Sony’s inclusion of the WAPI module in its phones without IWNCOMM’s authorization constitutes indirect infringement.
In determining whether an injunction should be applied as a remedy if the dispute involves a SEP, the court reasoned that such determination should be based on mutual beneficial agreement, and whether there were faults made during the negotiation of the agreement. Specifically, where neither party is at fault, or the patentee is at fault and the implementer is not, the patentee’s request for an injunction shall be denied. Where the patentee is not at fault, but the implementer is at fault, the patentee’s request for an injunction shall be granted. Where both parties are at fault, the court shall balance the interests of both parties when making the decision for the injunction request.
In a license negotiation regarding a SEP, the patentee has no duty to provide claim charts if the intended licensee possesses sufficient documents to determine the likelihood of infringement. In this case, Sony had been uncooperatively asking IWNCOMM to provide claim charts since the parties began its negotiation in 2009 all the way through 2015 at the same time that Sony had, in its possession, sufficient documents to make a determination regarding infringement of the disputed patent. The court determined that such intentional delay warranted IWNCOMM’s request for an injunction.
In determining the amount of monetary damages, the court applied treble damages based on the IWNCOMM’s evidence, including agreements made with other licensees not involved in this case. The court also supported IWNCOMM’s claim of reasonable expenses incurred for this litigation, including its attorney fees of RMB400,000 (approximately USD58,000).

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Come join me in Beijing at the USPTO-MofCOM Licensing Conference on March 28

3/23/2017

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I will be speaking next week on open source licensing in Beijing at a conference jointly sponsored by the US Patent Office (USPTO) and the Ministry of Commerce (MofCOM) of the Government of China.

The USPTO and MofCOM are jointly sponsoring a program on cross-border technology licensing on March 28 in Beijing at Renmin University’s law school. A draft agenda is available here. The USPTO/MofCOM program is intended to provide an opportunity to discuss cross-border IP licensing, including China’s Technology Import Export Regulation (“TIER”) and its impact on US technology collaboration and licensing. The program builds upon prior programs with SIPO that explored similar topics. Please email Ms. Liu Jia at jia.liu@trade.gov to RSVP as soon as possible.

Thanks to my colleague Mark Cohen of the ChinaIPR.com blog for recommending me to speak!

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Press release for my joining Beijing East IP

3/16/2017

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I have had a number of inquiries regarding joining Beijing East IP, so I am pasting below the press release. If anyone would like additional information or would just like to chat, email me at erick.robinson@beijingeastip.com!

Beijing, P.R. China (March 15, 2017) Beijing East IP, the top intellectual property firm in China, has hired Erick Robinson as Director of Patent Litigation. Mr. Robinson was most recently Chief Patent Counsel Asia Pacific at Rouse International in Beijing and Shanghai. He will be based in Beijing.

Mr. Robinson previously served as Director of Patents for Qualcomm in Asia, where he managed a broad range of IP issues ranging from patent drafting, prosecution, licensing, and litigation, to regulatory, policy, and antitrust matters. He also managed open source issues for Qualcomm Atheros, and created, implemented, and enforced open source protocols. Before Qualcomm, Erick managed patent and open source matters for Red Hat.

Mr. Robinson is an experienced U.S. patent attorney and trial lawyer with a technical background in computer science and physics, as well as biotechnology. He is a trusted authority on patent and antitrust law in China, and has been selected as one of the Leading 300 IP Strategists Worldwide by IAM for the past two years. The author of the influential ChinaPatentBlog.com as well as numerous articles on Chinese patent litigation, Mr. Robinson is frequently quoted in the Wall Street Journal, Financial Times, Intellectual Asset Management, and other publications on Chinese patent and antitrust issues.

Erick began his legal career at a Wall Street law firm negotiating and drafting technology agreements, and then moved to Texas, where he managed and tried patent cases for top U.S. law firms Weil Gotshal and McKool Smith. During his time in Texas, he managed bet-the-business patent cases on both the plaintiff and defendant side for Fortune 100 companies to sole inventors.

“I am excited and honored to join such a prestigious firm as Beijing East IP,” Mr. Robinson said. “This is the best IP firm in China, and they aggressive, connected, and talented. I am especially looking forward to working with Dr. Lulin Gao, the father of the Chinese patent system.”

“We are delighted to welcome Erick to our firm and entrust him with the responsibility to further strengthen firm’s litigation practice,” said Dr. Lulin Gao, founder and Chairman at Beijing East IP, a 2016 inductee into the IP Hall of Fame, and founding commissioner of SIPO. “We are excited to see this innovative combination of a senior US litigator and a well-established and connected China IP full service firm. We look forward to creation of the best litigation practice in China on patent and antitrust,” said Mr. Dragon Wang, Vice President at Beijing East IP.

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I Have A New Firm: Beijing East IP!

3/15/2017

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I am excited and proud to announce that I have changed firms. Today I officially joined Beijing East IP as Director of Patent Litigation. I will be based in Beijing.

The firm is headed by Dr. Lulin Gao, the father of the Chinese patent system and the first commissioner of the Chinese Patent Office (SIPO). Dr. Gao is the most connected person in IP in China. Beijing East has over 250 IP specialists, and a vast group of technical experts, including many top trial lawyers appointed by the Supreme Court for Patent Litigation. No other firm has the technical resources, legal expertise, and relationships of Beijing East IP.

It is an honor to be associated with such an impressive group of lawyers and technical experts. Beijing East IP is the best IP firm in China, and they are aggressive, connected, and talented. I am looking forward to working with this amazingly experienced and knowledgeable team.

You can email me at my new firm at Erick.Robinson@BeijingEastIP.com.

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My IP Law360 response: why China is a good place for NPEs

3/14/2017

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My IP Law360 Article is Online

My response to the recent IP Law360 article by Xiaomi's Jackie Wong is now online. In my rebuttal article on IP Law360, I explain the following:

Damages are increasing in China, such as the recent $7.2M award in a small domestic v. domestic patent case;
Injunctions are the magic of China, as they are virtually guaranteed;
#2 creates tremendous leverage because of not just the huge sales market in China, but the huge manufacturing market, which creates a worldwide injunction;
There is a difference between preliminary injunctions (including interlocutory or in-case injunctions) and final injunctions;
NPEs are treated no differently than any other patentee in China, including regarding injunctions;
Foreign plaintiffs win more frequently than Chinese plaintiffs;
There is no need for NPEs to establish an affiliate on the ground in China to purchase or assert patents here;
Why Chinese patent litigation is advantageous for all plaintiffs, including NPEs;
How NPEs can help China; and
How China can help NPEs.

Let me know what you think of the article! Email me at erick@ChinaPatentBlog.com or contact me on LinkedIn!

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Bad Facts: IP Law360 Article on NPEs in China Gets It Wrong

3/11/2017

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In an article entitled "What To Expect From NPE Activity In China" published today at IP Law360, Xiaomi Legal Counsel Jackie Wong makes several factual and analytical errors. IP Law360 has graciously allowed me to respond. Look for my response early next week on the site!

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Welcome to the China Patent Blog by Erick Robinson. Erick Robinson's China Patent Blog discusses China's patent system and China's surprisingly effective procedures for enforcing patents. China is leading the world in growth in many areas. Patents are among them. So come along with Erick Robinson while he provides a map to the complicated and mysterious world of patents and patent litigation in China.

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Erick Robinson is an experienced American trial lawyer and U.S. patent attorney formerly based in Beijing and now based in Texas. He is a Patent Litigation Partner and Co-Chair of the Intellectual Property Practice at Spencer Fane LLP, where he manages patent litigation, licensing, and prosecution in China and the US.

Guest Post: Yes, you can get an injunction in a SEP case in China!

Come join me in Beijing at the USPTO-MofCOM Licensing Conference on March 28

Press release for my joining Beijing East IP

I Have A New Firm: Beijing East IP!

My IP Law360 response: why China is a good place for NPEs

Bad Facts: IP Law360 Article on NPEs in China Gets It Wrong

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