iOn March 30, 2023, the Intellectual Property Tribunal of China’s Supreme People’s Court (SPC) released the “Typical Cases of the Intellectual Property Tribunal of the Supreme People’s Court (2022)” (最高人民法院知识产权法庭典型案例(2022)). The SPC selected 20 cases from the 3,468 technology-related intellectual property and monopoly cases it concluded in 2022 to “summarize and give full play to the positive role of typical cases, effectively increase the protection of intellectual property rights, and maintain a fair competition order in the market.” Per the SPC, the cases involve four aspects: “increase the protection of intellectual property rights to better stimulate innovation and creativity; explore new ways to solve the problem of rights protection and protect innovation in innovative ways; uphold the principle of equal protection and create a first-class business environment that is market-oriented, ruled by law, and internationalized; and strictly regulate all kinds of monopolistic behaviors and maintain the order of fair competition in the market.” Summaries of the IP cases, as provided by the SPC, follow
1. Patent civil cases
1. China’s first drug patent link lawsuit [Chugai Pharmaceutical Co., Ltd. and Wenzhou Haihe Pharmaceutical Co., Ltd. to confirm whether it falls into the scope of patent protection dispute case]
[Case No.] （2022）最高法知民终905号
[Basic facts of the case] Chugai Pharmaceutical Co., Ltd. (a subsidiary of Roche) filed a drug patent linkage lawsuit with the Beijing Intellectual Property Court in accordance with the first paragraph of Article 76 of the Patent Law, requesting confirmation of the generic drug technical solution of Wenzhou Haihe Company’s “Aidecalcidol Soft Capsules” fall within the scope of protection of the patent claims involved. The court of first instance ruled to reject Chugai Co., Ltd.’s claim. Chugai Pharmaceutical Co., Ltd. filed an appeal. The Supreme People’s Court held in the second instance that Wenzhou Haihe Company did not make a declaration for the patent claim with the largest scope of protection, and failed to notify Chugai Pharmaceutical Co., Ltd., the marketing authorization holder, of the declaration and the basis for the declaration in a timely manner. Its behavior was inappropriate and should be criticized; The judgment of whether the generic drug technical solution falls within the protection scope of the patent claims should, in principle, be judged based on the application materials of the generic drug applicant; after comparison, the generic drug technical solution involved does not fall within the protection scope of the patent claims. Therefore, it was decided to dismiss the appeal and uphold the original judgment.
[Typical Significance] This case is the first drug patent linkage litigation case in China. China’s drug patent linkage system has just been established and is still in the exploratory stage. The judgment of this case made exploratory legal application in line with the legislative purpose to the new problems that appeared in the initial practice of the drug patent linkage system, and has received widespread attention and praise from Chinese and foreign media and the medical community. China Central Radio and Television reported it as soon as possible, and was selected as the “Top Ten Nominated Cases in 2022 to Promote the Rule of Law in the New Era”.
2. Two cases of “melamine” invention patent and technical secret infringement [Sichuan Jinxiang Sairui Chemical Co., Ltd., Beijing Yejing Technology Co., Ltd. and Shandong Hualu Hengsheng Chemical Co., Ltd., Ningbo Houcheng Management Consulting Co., Ltd., Two cases of Ningbo Antai Environmental Chemical Engineering Design Co., Ltd. and Yin XX’s infringement of invention patent rights and infringement of technical secrets]
[Case No.]（2020）最高法知民终1559号、（2022）最高法知民终541号
[Basic facts] Jinxiang Company and Yengjing Company were the patentees of invention patent number 201110108644.9, entitled “Production system and process of melamine by gas-phase quenching method of energy-saving and capital-saving type”, and Jinxiang t Company was also the patentee of a method for producing melamine by pressurized gas-phase quenching method and the owner of technical secrets related to the production system using such a method. Jinxiang Company and Yecheng Company brought a lawsuit with the Guangzhou Intellectual Property Court against Hualu Hengsheng Company and four other defendants for their infringement upon the patent rights involved in this case. Jinxiang Company also filed a lawsuit with the Intermediate People’s Court of Chengdu Municipality, Sichuan Province against the aforesaid four defendants for their infringement upon technical secrets [trade secret misappropriation]. Both courts held in the first instance that the four defendants jointly committed patent infringement and technical secret infringement, and both courts ordered the defendants to cease infringement, and partially supported the claims for damages. Both parties refused to accept the two cases and appealed. After a second instance, the Supreme People’s Court held that: All defendants and infringers have the intention to communicate with each other regarding infringement, are subjectively aware of each other, have successively committed corresponding infringement acts, and constitute a complete chain of infringement acts. They have collaborated with each other objectively based on division of labor, and jointly and intentionally committed torts, and they shall assume joint and several liability for all tort damages. Therefore, the Supreme People’s Court amended the judgment to support all the claims of the plaintiffs, and ruled that the infringer shall destroy the infringing production system and the documentation of the relevant technical secret by means including but not limited to dismantlement, and jointly and severally compensate the plaintiffs for the economic losses of 218 million RMB in total (including 120 million RMB for the invention patent infringement case and 98 million RMB for the technical secret infringement case).
[Typical Significance] This is currently the intellectual property infringement case where the people’s court has awarded the highest amount of compensation for the same project. The right holder, Jinxiang Company, is a Sino-foreign joint venture, Yejing Company is a high-tech private enterprise, and one of the infringers, Hualu Hengsheng Company, is a state-owned listed company. The judgments in the two cases not only demonstrate the firm attitude of the people’s courts to effectively strengthen the judicial protection of intellectual property rights, but also fully reflect the integrated treatment and equal protection of domestic and foreign-funded enterprises, state-owned and private enterprises, and other types of enterprises. In this case, the identification of joint intentional infringement and all joint and several liability, the considerations for the calculation of compensation, and the handling method of destroying the infringing documentation in the cessation of infringement liability are of precedential significance for the handling of similar cases.
3. “Expansion joint device” standard essential patent infringement case [Xu, Ningbo Lubao Technology Industrial Group Co., Ltd., Hebei Yideli Rubber Products Co., Ltd., Hebei Jitongtong Bridge Construction Co., Ltd. Infringement of Invention Patent Dispute]
[Case No.] （2020）最高法知民终1696号
[Basic facts of the case] Xu is the patentee of the invention patent with the patent number 200410049491.5 entitled “Expansion joint apparatus for ultra large yield resisting comb type bridge”. The patent involved in the case is a standard essential patent of the industry recommended standard “Unitized multi-directional displacement comb plate bridge expansion joint device” issued by the Ministry of Transport. The patentee Xu and Lubao Company, the exclusive licensee of the patent involved in the case as the legal representative, believed that Jitong Company used the expansion joint device manufactured and sold by Yideli Company in accordance with the above-mentioned standards in the Pingzan Expressway project, the two companies infringed the patent rights involved in the case, so they filed a lawsuit with the Intermediate People’s Court of Shijiazhuang City, Hebei Province, requesting that the two companies stop the infringement and jointly compensate for losses and reasonable expenses of 3 million RMB for rights protection. The court of first instance found that Yideli Company and Jitong Company had infringed the patent rights involved in the case, and ruled that Yideli Company should compensate for economic losses and reasonable expenses for rights protection of 100,000 RMB. Xu and Lubao Company filed an appeal. The Supreme People’s Court held in the second instance that the patent involved in the case was a standard essential patent, and the recommended standard clearly disclosed the technical solution, patent number and contact information of the patentee involved in the case, and Lubao Company had notified Yideli Company of suspected infringement of the patent involved in the case in 2016 . Knowing the existence of the patent involved, Yideli Company not only did not take the initiative to seek a patent license, but also implemented the patent involved without permission, so was fault. The judgment was changed to fully support the right holder’s claim for compensation of 3 million RMB.
[Typical Significance] The second instance of this case, on the basis of finding that the owner of the standard-essential patent is not at fault and that the implementer of the patent is obviously at fault, fully supports the claim of compensation by the owner, and clarifies the key points to be determined when determining the liability for damages in a standard-essential patent infringement case by taking into account the parties’ faults, highlighting the judicial policy orientation of protecting bona fide actors.
4. “Dynamic password USB cable” utility model patent infringement case [Shenzhen Zudian Intelligent Technology Co., Ltd. and Shenzhen Senshuqiang Electronic Technology Co., Ltd. and other infringement disputes over utility model patent rights]
[Case No.] （2022）最高法知民终124号
[Basic facts of the case] Zudian Company is the owner of a utility model patent with the patent number 201720131230.0 entitled “a dynamic password USB cable”. Zudian believed that Senshuqiang Company and others had committed infringement, and filed a lawsuit with the Shenzhen Intermediate People’s Court of Guangdong Province. The defendants argued that Zudian applied for the involved utility model patent and the related utility patent with substantially the same technical solution on the same day, and the related patent right has been declared invalid. Based on the same reason, the involved patent right should also be invalid. Therefore, Zudian’s claim should be dismissed. The court of first instance determined that the technical solutions of the above two patents were essentially the same, and the patent rights involved in the case were obviously or very likely to be invalidated, so it ruled to reject Zudian’s claim. Zudian filed an appeal. During the second instance procedure of this case, the defendant filed a request for invalidation of the patent involved. The Supreme People’s Court held in the second instance that, when the stability of the patent right involved in the case is in doubt or disputed, and there are multiple options for handling the case in the follow-up trial procedure, the People’s Court can make decisions as appropriate. The case has been explained that both parties voluntarily made corresponding commitments on compensation for future interests regarding the stability of the patent right. The Supreme People’s Court adopted the approach of “refuting first and suing separately” based on the basic facts of the case, the evidence on file and the commitments of both parties, ruling to revoke the first-instance judgment and dismiss the lawsuit.
[Typical Significance] In this case, when the invalidation procedure of the patent involved in the case has already started, the people’s court tried for the first time to guide both parties to voluntarily make future interest compensation commitments in response to the uncertainty of the results of the invalidation procedure. The judgment clarifies that in patent infringement cases, when the stability of the patent rights involved in the case is doubtful or disputed, based on the consideration of fairness and good faith, the people’s court may encourage and guide the parties to voluntarily make compensation commitments or statements related to future interests, which can effectively promote the case. The trial procedure properly balances the substantive interests of the parties.
5. “Bonding and fastening type anchor bolt” utility model patent infringement case [Fuzhou Baiyi Baili Automation Technology Co., Ltd. v. Shanghai Diangua Construction Technology Co., Ltd., Zhang XX’s infringement of utility model patent dispute case]
[Case No.] （2021）最高法知民终1066号
[Basic facts of the case] Fuzhou Baiyi Baili Company is the owner of a utility model patent number 201320534267.X entitled “Bonding and fastening type anchor bolt.” Fuzhou Baiyi Baili Company believed that Shanghai Diangua Company and its legal representative Zhang XX infringed the patent right involved in the case, so it filed a lawsuit with the Shanghai Intellectual Property Court, requesting an order to stop the infringement and joint compensation of 2.5 million RMB for losses and reasonable expenses and rights protection. The court of first instance held that the alleged infringing technical solution fell within the protection scope of the patent involved, but the conflicting application defenses of Shanghai Diangua Company and Zhang XX were established, so it ruled to reject Fuzhou Baiyi Baili Company’s claim. Fuzhou Baiyi Baili Company filed an appeal. The Supreme People’s Court held in the second instance that the defense of the conflicting application cannot be established; it can be determined that Shanghai Diangua Company, which implemented the infringing technical solution, and Zhang XX, who provided the technical solution, jointly infringed the patent right involved in the case. Fuzhou Baiyi Baili Company claimed damages based on business scale publicized by Shanghai Diangua Company and Zhang XX but while Shanghai Diangua Company and Zhang XX argued in defense that the business scale was exaggerated marketing they did not submit evidence to prove their actual business revenue for damages calculations. Based on the scale of the above-mentioned external publicity and comprehensive consideration of other factors in the case, the judgment was changed to fully support Fuzhou Baiyi Baili Company’s 2.5 million RMB compensation claim.
[Typical Significance] This case determines the scale of the infringement based on the content of the accused infringer’s publicity, and on this basis, comprehensively determines the amount of compensation. The subject follows the principle of good faith in business activities. In addition, although the patented products involved in the case are small components and the unit price is not high, small patents can also receive high compensation, reminding everyone that they should respect the innovations of others.
6. Two cases concerning the ownership of the patent right of “gasifier dedusting device and system” [Two disputes over patent right ownership between Aerospace Long March Chemical Engineering Co., Ltd. and Luxi Chemical Group Co., Ltd. and Liaocheng Luxi Chemical Engineering Design Co., Ltd. case】
[Case No.] （2020）最高法知民终1652号、（2020）最高法知民终1293号
[Basic facts of the case] The patents involved in the case are utility model patents with patent number 201620067057.8 entitled “A Synthetic Gas Dust Removal System” and patent number 201720586771.2 entitled “A gasifier outlet gas spray device”. Aerospace Long March Company believes that during the cooperation period, Luxi Chemical Group Company and Liaocheng Luxi Chemical Company violated a non-disclosure agreement and applied for the two patents involved with the technology provided by Aerospace Long March Company, so it filed a lawsuit with Jinan Intermediate People’s Court of Shandong Province, requesting a ruling that the two patent rights belong to Aerospace Long March Company. The court of first instance held that the patented technical solution involved in the case was an improved technical solution of Luxi Chemical Group Company and Liaocheng Luxi Chemical Company based on the technical solution of Aerospace Long March Company, but the improvement did not have substantive characteristics, so it ruled that the two patents involved belonged to Aerospace Long March Company. Luxi Chemical Group Company and Liaocheng Luxi Chemical Company refused filed an appeal. In the second instance, the Supreme People’s Court held that Luxi Chemical Group and Liaocheng Luxi Chemical could not prove that the improvements they made on the basis of others’ non-public technical solutions were substantial. Therefore, it was decided to dismiss the appeal and uphold the original judgment.
[Typical Significance] In this case, the burden of proof in a dispute over the ownership of a patent right, which is to be protected by the improved technical solution of a non-public technical solution, is clarified, the basis for the right obtained by the technical source party and the technical improvement party is reasonably defined, and the parties that have not made substantial technical contributions are prevented from appropriating the non-public technical solution of others by applying for a patent, so as to effectively protect the lawful rights and interests of the technical source party. This case was listed in the voting link of “2022 Top 10 Cases Involving Promoting the Rule of Law Process in the New Era”.
7. Two cases concerning the ownership of patent rights and patent application rights of “stapler and suture needle kit” [Zhejiang Zuoyuan Medical Technology Co., Ltd. and Wan XX two cases of disputes over patent rights and patent application rights]
[Case No.] （2022）最高法知民终1330号、（2022）最高法知民终2365号
[Basic facts] Wan is the patentee of utility model number 202020661599.4 entitled “suture device and suture needle set” and applicant of invention patent application number 202010343019.1 entitled “suture device, treatment device with a stapler, and treatment system.”. Zuoyuan Company believes that Wan was once the legal representative of the company, and the above two inventions were completed during his employment and are service inventions, and the relevant rights should be owned by Zuoyuan Company, so it filed a lawsuit with the Intermediate People’s Court of Hangzhou City, Zhejiang Province . The court of first instance dismissed the claim on the grounds of insufficient evidence. Zuoyuan Company filed an appeal. During the second-instance procedure, the Supreme People’s Court comprehensively sorted out a series of conflicts and disputes between the two parties, helped them clarify their core demands, fully explained them, patiently guided them, and resolved all related disputes between the two parties in a package to achieve win-win cooperation.
[Typical Significance] The successful mediation of the two cases has resolved the conflicts and series of disputes accumulated by the two parties for many years, fully embodies the excellent traditional Chinese culture of peace and mutual benefit, and demonstrates the people’s court’s efforts to reduce the litigants’ burden and substantive Judicial attitude towards resolving disputes.
2. Patent administrative cases
8. Two cases of invalidation of invention patent rights of “L-Ornidazole” [Two cases of administrative disputes between Changsha Huamei Pharmaceutical Technology Co., Ltd. and the State Intellectual Property Office and Nanjing Shenghe Pharmaceutical Co., Ltd. for the invalidation of invention patent rights]
[Case No.] （2020）最高法知行终475号、（2020）最高法知行终476号
[Basic facts] Nanjing Shenghe Company own patent number 200510068478.9, entitled “Application of L-Ornidazole in the Preparation of Drugs Against Anaerobic Infections” and patent number 200510083517.2, entitled “Levo-Ornidazole in the Preparation of Drugs Against Parasitic Infections.” Huamei Company filed a request for invalidation with the China National Intellectual Property Administration (CNIPA) on the grounds that the two patents did not possess an inventive step. The CNIPA maintained validity of the two patents. Huamei Company filed a lawsuit with the Beijing Intellectual Property Court. The court of first instance ruled to revoke the decision and ordered the CNIPA to make a new decision. Both the CNIPA and Nanjing Shenghe Company appealed. The Supreme People’s Court held in the second instance that, in the judgment of the inventiveness of patents for the medical use of compounds, it should be comprehensively considered whether the existing technology has given specific and clear inspiration. In this case, the prior art did not give the technical inspiration for reducing the toxicity of ornidazole, nor did it provide the technical inspiration for discovering the beneficial technical effect of levo-ornidazole with lower toxicity and formulating levo-ornidazole as a single medicine. Therefore, the two patents are inventive. Therefore, SPC revoked the first-instance judgments and dismissed Huamei Company’s claims.
[Typical Significance] The judgments of the two cases clarified the criteria for judging the inventiveness of patents for medical use of compounds, reflecting the judicial orientation of strengthening the protection of pharmaceutical intellectual property rights and stimulating innovation in the pharmaceutical field.
9. “Card Metaphor for Activities in Computing Devices” Invention Patent Invalidation Case [Apple Computer Trading (Shanghai) Co., Ltd. v. State Intellectual Property Office of the People’s Republic of China and Qualcomm Co., Ltd. Administrative Dispute over the Invalidation of Invention Patents]
[Case No.] （2021）最高法知行终1号
[Basic facts of the case] Qualcomm is the owner of the invention patent No. 201310491586.1, entitled “Card Metaphor for Activities in Computing Devices.” Apple Computer Trading Shanghai Company filed a request for invalidation with CNIPA, which maintained the validity of the patent right. Apple Computer Trading Shanghai Company refused to accept it and filed a lawsuit with the Beijing Intellectual Property Court. The court of first instance dismissed its claim. Apple Computer Trading Shanghai Company filed an appeal. The Supreme People’s Court held in the second instance that if several technical features in a technical solution are interdependent and have synergistic effects, and can rely on the whole to realize a certain function and produce corresponding effects, then the aforementioned synergistic effects should be considered in the evaluation of inventiveness. The final judgment of the second instance dismissed the appeal and upheld the original judgment.
[Typical Significance] This case involves an intellectual property dispute between internationally renowned technology companies. The judgment reflects an objective and fair evaluation of the contribution of inventions, creations and technologies, and demonstrates the attitude of the people’s courts to strengthen the protection of intellectual property rights and efforts to create a market-oriented, rule-of-law, internationalized and first-class business environment.
10. Two cases of administrative ruling on patent infringement of “Rivaroxaban” invention [Nanjing Hengsheng Pharmaceutical Co., Ltd., Nanjing Life Energy Technology Development Co., Ltd. and Nanjing Intellectual Property Office of Jiangsu Province, People’s Republic of China, and Bayer Intellectual Property Co., Ltd. Patent Administrative Ruling two cases]
[Case No.] （2021）最高法知行终451号、（2021）最高法知行终702号
[Basic facts of the case] Bayer AG is the owner of the invention patent No. 00818966.8, entitled “Substituted Oxazolidinones and Their Application in the Field of Blood Coagulation.” Hengsheng Company and Life Energy Company displayed rivaroxaban preparations and raw materials bearing the registered trademark of Hengsheng Company on their official websites and relevant exhibitions. Bayer filed a request with the Nanjing Intellectual Property Office for handling the patent infringement dispute, and the office ruled that the two companies should stop the infringement. Hengsheng Company and Life Energy Company were dissatisfied and brought a lawsuit to the Intermediate People’s Court of Nanjing City, Jiangsu Province. The court of first instance dismissed the claim. Hengsheng Company and Life Energy Company appealed. The Supreme People’s Court held in the second instance that Hengsheng Company and Life Energy Company expressed their intention to sell the products involved to unspecified parties through websites and exhibitions without permission, which constituted an infringement via offer for sale. The exception clauses in the administrative approval of drugs and medical devices only apply to the “manufacturing, use and import” act conducted for their own application for administrative approval, and the “manufacturing and import” act conducted exclusively for the former party’s application for administrative approval. Hengsheng Company and Sino-Life Energy Company did not meet the subject conditions for the aforesaid exception, and the promised sales did not fall within the scope of the aforesaid exception, so the relevant exception shall not apply. Therefore, the court rendered a judgment to dismiss the appeal and affirm the original judgment.
[Typical Significance] The judgments of the two cases clarified the judicial concept that the patent law is based on the principle of protecting legal rights, with statutory non-infringement as an exception, and that all exceptions must be strictly interpreted. Concretely applied to the legal application of the relevant provisions of the patent law drug and medical device administrative approval exception (Bolar exception), it is necessary to ensure the accessibility of drugs and medical devices to the public after the expiration of the patent right, and to avoid weakening the protection of the patentee. The protection of legal rights and interests carefully balances the interests of patentees, generic drug companies, and the public in accordance with the law. This case also embodies the people’s court’s judicial concept of equal treatment and equal protection for Chinese and foreign parties.
3. Cases of new plant varieties
11. – 13.
4. Technical secret cases
14. Technical secret infringement case of the parent of a new hybrid corn plant “W68” [Hebei Huasui Seed Industry Co., Ltd. and Wuwei Bosheng Seed Industry Co., Ltd. dispute over technical secret infringement]
[Case No.] （2022）最高法知民终147号
[Basic facts of the case] Huasui Seed Industry Co., Ltd. is the owner of the variety right of the new corn plant variety “Wannuo 2000” and the owner of the technical secrets of “W68”, the parent of “Wannuo 2000”. It filed a lawsuit with the Intermediate People’s Court of Lanzhou City, Gansu Province on the grounds that Bosheng Seed Company infringed on technical secrets, requesting that Bosheng Seed Company be liable for the infringement. The court of first instance held that Bosheng Seed Company infringed on the rights and interests of “W68” technical secrets, and ruled that it should stop the infringement and compensate for economic losses and reasonable expenses for rights protection totaling 1.505 million RMB. Bosheng Seed Company filed an appeal arguing that “W68” as the parent is not a protected object of commercial secrets. The Supreme People’s Court held in the second instance that the breeding intermediate materials, inbred parents, etc. formed in the process of crop breeding are the intellectual achievements of the breeders’ creative labor, and have the characteristics of both technical information and carrier objects, and the two are inseparable. If it meets the conditions of not being known to the public and taking corresponding confidentiality measures, it can be legally protected as a commercial secret. Therefore, it was decided to dismiss the appeal and uphold the original judgment.
[Typical Significance] This case is the first trade secret case involving breeding materials heard by the Supreme People’s Court. The judgment clarifies the protection conditions and protection path for the parent of a new hybrid corn plant as a commercial secret. The original innovation and continuous innovation of breeding promote the construction of a diversified and three-dimensional comprehensive legal protection system for breeding achievements.
15. “Oil and gas microbiological exploration” technology secret infringement case [Angyitai Geological Microbial Technology (Beijing) Co., Ltd. and Insuo Oil Energy Technology (Beijing) Co., Ltd., Luo XX, Li XX, Hu XX, Zhang XX Technical Secret Infringement Dispute Case]
[Case No.] （2021）最高法知民终1363号
[Basic facts of the case] Angyitai Company is the owner of technical secrets related to oil and gas microbial exploration. Its former employees Luo XX, Li XX, Hu XX, and Zhang XX violated the obligation of confidentiality and disclosed the technical secrets involved to Insuo Oil Company for use. As a result, a lawsuit was filed with the Beijing Intellectual Property Court. The court of first instance ruled that Insuo Oil Company, Luo XX, and Li XX should stop the infringement, and Insuo Oil Company and Li XX should jointly compensate economic losses of 500,000 RMB and pay 250,000 RMB of reasonable expenses for rights protection. Angyitai Company, Insuo Oil Company, Luo XX, and Li XX filed an appeal. The Supreme People’s Court held in the second instance that this case was caused by former employees forming a new company and infringing on the technical secrets of the former company. There are few operators in the field of oil and gas microbial exploration, and the market competition is not sufficient. It can be presumed that Insou Oil Company improperly seized the trading opportunities that originally belonged to Angyitai Company, and all its profits should be regarded as infringement profits. Therefore, the court ruled in favor of Angetech’s appeal in full.
[Typical Significance] In this case, when it is clear that the infringer has obvious faults and the infringement directly determines business opportunities, in principle, all the profits can be regarded as the profits from the infringement, that is, it is actually determined that all the profits from the infringement come from the technical secrets involved in the case. The Court released a strong signal to effectively strengthen the protection of technical secrets and effectively maintain fair competition.
16. “Youkeduo” small program source code technical secret infringement case [Shenzhen Huaer Blossom Network Technology Co., Ltd. v. Zhejiang Panxing Digital Technology Co., Ltd., Zhejiang Panshi Information Technology Co., Ltd. Infringement of technical secrets dispute case]
[Case No.] （2021）最高法知民终2298号
[Basic facts of the case] Huaer Blooming Company is the owner of the source code technical secrets of the “Youkeduo” applet. The company claimed that after Panxing Company signed a “Huaer Blooming Source Code License Contract” with it and obtained the source code of the software involved in accordance with the contract, but it violated the contract’s confidentiality obligation and disclosed the source code on the public website, and thus filed a lawsuit with the Intermediate People’s Court of Shenzhen City, Guangdong Province requesting that Panxing Company and its sole shareholder, Panshi Company, be jointly liable for economic losses of more than 50 million RMB and eliminate the impact. The court of first instance ruled that Panxing Company and Panshi Company should jointly compensate 5 million RMB. Huaer Blossoming Company, Panxing Company, and Panshi Company all appealled. The Supreme People’s Court held in the second instance that the source code of the software involved in the case constituted technical secrets, and that Panxing Company’s disclosure of the source code of the software involved in the case constituted a violation of technical secrets; In the appraisal opinions issued by a unilateral authentication agency entrusted by Huaer on the commercial value of the technical secrets involved in this case, many data were doubtful and should not be admitted; and in the overall consideration of such factors as the research and development costs of the technical secrets involved, the proceeds from the implementation of the technical secrets, the available benefits, and the time when the competitive advantage could be maintained, etc., the amount of damages determined by the court of first instance was not obviously inappropriate. Therefore, the court rendered a judgment to dismiss the appeal and affirm the original judgment.
[Typical Significance] In this case, in a technical secret infringement case clearly involving illegal disclosure, the amount of damages should be determined based on the commercial value of the disclosed technical secret and comprehensive consideration of the specific circumstances of the case. There are many ways to determine the commercial value of technical secrets. This case, while recognizing that appraisal and evaluation is an optional method, further clarifies the comprehensive consideration factors for determining the commercial value of technical secrets when it is difficult to accept relevant appraisal opinions.
5. Monopoly cases
17. – 20.
