Recently, GoldenGate Lawyers represented a famous US Bluetooth headset designer and manufacturer in a design patent infringement case against Defendant 1, a manufacturer of the infringing product in Shenzhen, and Defendant 2, a seller of the infringing product in Shenzhen. The case was trialed by The Shenzhen Intermediate Court. GoldenGate Lawyers on behalf of Plaintiff won the case and the client was really pleased to have the result.
The dispute of this case focused on: i) whether the design of the infringing product falls within the protection scope of the relevant patent, thus infringing the Plaintiff’s patent right; ii) whether Defendant 2 should be liable for compensation.
Focus 1: Although the boom of the infringing headset was modified slightly, which is very common in current cases of design patent infringement, it was ruled by the Court that the ear hook of Bluetooth headset has a main and bigger impact on the whole visual effect of the headset, and the ear hook of the infringing product is the same as that of the involved patent in terms of shape, therefore the design of the infringing product is substantially identical to the patented design and thus falls into the protection scope of the patent.
Focus 2: The sole shareholder of Defendant 2 is the controlling shareholder of Defendant 1. Since the Plaintiff sent C&D letters to Defendant 1 more than two times and sent one C&D letter to Defendant 2, the Plaintiff was of the opinion that Defendant 2 should be liable for compensation due to its “knowing what sold is of infringing product”. However, the Court was of the opinion that Defendant 2 provided sales contract and orders between Defendant 1 and Defendant 2, thus the products sold by Defendant 2 had legitimate sources and Defendant 2 should not be liable for compensation.
The Court made the judgment that i) Defendant 1 and Defendant 2 should immediately stop infringement of the relevant patent right; and 2) Defendant 1 should compensate Plaintiff for economic losses and reasonable fees for protecting its rights in the amount of RMB 150,000.00.
It is known from the course of the trial and judgment that under the background of strengthening IP protection, the strategy of rejuvenating the country with IP and the substantial increase of compensation amount as modified by the new draft Patent Law, the real compensation amount for infringement is substantially increased in comparison with previous cases, which increases the costs of infringement and provides more protection to the patentee. Meanwhile, it should also be noted that the Court has strict criteria when it identifies the legitimate source of products. In particular, unless the seller can be proved to have “known” the sold products are infringing products, the Court will certainly identify the seller “does not know”. Hence, when a patent proprietor files a demand for compensation, it is better to sue manufacturer and seller in a same patent infringement suit, so that the benefits may be maximized while the infringement can be stopped.