Against the backdrop of intensifying market competition and frequent patent infringements, how to resolve patent disputes swiftly and efficiently has become a core concern for enterprises. In a recent utility model patent infringement case handled by Chang Tsi & Partners, the firm leveraged precise strategic planning, a professional evidence system, and an efficient collaborative mechanism to successfully assist the globally renowned company A in reaching a mediation agreement with the infringing party. This resulted in substantial compensation, stabilisation of patent rights, and market rectification, achieving multiple objectives in safeguarding rights.
Case background
Nancy Qu
Partner
Chang Tsi & Partners
Tel: +86 10 8836 9999
E-mail: nancyqu@changtsi.com
The plaintiff, company A, is a globally recognised enterprise that sells reputable patented products in the Chinese market and holds several related utility model patents. These patents constitute company A’s core technological barrier in China, providing robust legal protection for its products.
The defendant, company B, is a well-known domestic enterprise. Technical comparison revealed that several of its products fell within the scope of protection of company A’s patents involved in the case. Upon discovering the infringement, company A immediately sent a cease-and-desist letter to company B, demanding that it stop the infringing activities.
However, not only did company B fail to co-operate, it also expanded the production and sales of the infringing products during the litigation. According to incomplete statistics, the sales of infringing products on domestic online platforms alone exceeded tens of millions of renminbi.
Faced with company B’s ongoing infringement, company A decided to protect its rights through legal means. Upon engagement, the legal team, led by lawyer Nancy Qu, promptly formed a professional team and devised a precise litigation strategy tailored to the case’s characteristics.
Case strategy
The case was concluded through mediation, with the strategy focusing on the following aspects.
Continuously strengthening evidence collection around the litigation objectives. Before filing the lawsuit, the legal team communicated thoroughly with company A to clarify that the litigation goals were to stop the infringement and obtain compensation. Given the large and rapidly expanding sales of the infringing products, the team submitted sufficient evidence to support a substantial claim for damages at the time of filing. During the proceedings, they continued to collect and promptly submit new evidence in response to the defendant’s ongoing infringement.
Rose Xu
Senior Counsel, Trademark Agent
Chang Tsi & Partners
Tel: +86 10 8836 9999
E-mail: rosexu@changtsi.com
Systematic organisation of evidence to assist the court in establishing the facts. Due to the complexity of the case, the large volume of evidence, and the significant scale of online and offline infringement by the defendant, multiple hearings were held. After the hearings, the legal team maintained frequent communication with the court regarding the calculation of the defendant’s profits from infringement (covering actual sales, product profit margins, patent contribution rates, and other core elements).
Following the judge’s recommendations, the team repeatedly refined the calculation model, narrowing the scope of profits to the actual sales of specific infringing models for which notarised evidence had been obtained. By systematically organising key data such as infringing product models and sales proportions, and submitting detailed post-hearing opinions, the team ultimately formed a favourable chain of evidence for the plaintiff, which the court adopted in its findings.
Promoting settlement through litigation and concluding the case via mediation for rapid dispute resolution. In the context of an economic downturn, to prevent the defendant from using litigation procedures to delay performance or being unable to fulfil an effective judgment due to deteriorating financial conditions, the team prepared thoroughly and actively participated in the litigation while also employing a strategy of “promoting settlement through litigation”. The team applied to the court for property and conduct preservation, and simultaneously requested the court to mediate, compelling the defendant to enter the mediation process.
Focusing on key terms such as the amount of compensation, payment method, inventory clearance period, patent licence fees, and withdrawal of administrative litigation for patent invalidation, the team engaged in in-depth negotiations with the defendant. Based on efficient communication with the court and the defendant’s legal counsel, and in line with the client’s demands, the team drafted the mediation agreement, ultimately achieving the following key outcomes:
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- Company B immediately ceased all production of infringing products;
- Company B paid substantial compensation; and
- Company B voluntarily withdrew the administrative litigation challenging the plaintiff’s patent.
Significance of the case
As a typical case of utility model patent infringement, the significance of this case lies not only in the substantial compensation awarded, but also in providing enterprises with innovative approaches to patent protection and market safeguarding. Resolving the dispute through mediation avoided lengthy litigation and achieved multiple objectives.
On one hand, the high compensation confirmed by the court’s mediation document fully demonstrates the judiciary’s emphasis on intellectual property protection. On the other, the immediate cessation of infringement and withdrawal of the administrative litigation fundamentally safeguarded the stability of the patent rights, building a robust patent moat for the client.
By integrating substantial compensation, patent stability, and infringement cessation, this comprehensive solution aligns legal outcomes with commercial value.
From an industry perspective, this case offers a valuable reference for enterprises facing similar infringement challenges. In the current market environment, patent infringement is widespread, while rights protection often faces practical difficulties such as lengthy cycles, high costs, and enforcement challenges.
Through precise jurisdiction selection, solid evidence preparation and flexible mediation strategies, this case maximised the effect of rights protection in a relatively short period, saving judicial resources and securing valuable time for enterprises to quickly restore market competitiveness.
The innovative mediation scheme and the organic combination of multiple key terms provide new ideas for handling complex patent disputes and have a positive demonstrative effect on improving the IP protection mechanism.
Nancy Qu is a partner at Chang Tsi & Partners. She can be contacted by phone at +86 10 8836 9999 and by email at nancyqu@changtsi.com
Rose Xu is senior counsel and a trademark agent at Chang Tsi & Partners. She can be contacted by phone at +86 10 8836 9999 and by email at rosexu@changtsi.com
