Fine times in China
The Guangdong High People’s Court recently gave its final judgment on a patent infringement dispute that has lasted for three years between Midea Air-conditioning & Refrigeration Group and Gree Electric Appliances, Inc, of Zhuhai, both leading Chinese home appliance makers.
The court upheld the lower court’s decision that Midea infringed Gree’s patent, ruling Midea to stop selling the infringing air-conditioning products and imposing a fine of 2 million yuan (US$317,600).
In April 2007, Gree developed a technology that allows users to control room temperatures according to their own sleeping habits and thereby improve sleeping quality. In April of the same year, Gree filed an invention application with the State Intellectual Property Office (SIPO) and obtained the patent right in September of 2008.
“IN THE PAST 10 YEARS, CHINA’S IP PROTECTION HAS IMPROVED SIGNIFICANTLY AND THE NUMBER OF CIVIL IP CASES INCREASED SHARPLY AND RAPIDLY.”
The invention is described as a Method of Controlling an Air-conditioner Operating According to a User-defined Curve. From August to November 2007, Gree introduced several series of air-conditioning products, including this patented technology, to market.
In 2008, Gree found that malls in Zhuhai were selling a series of airconditioning products made by Midea, and Gree believed these products copied its patented technology. In December 2008, Gree brought a lawsuit against Midea to the court, requiring Midea to stop the infringing behavior and pay compensation for Gree’s financial loss.
Zhuhai Intermediate People’s Court accepted this lawsuit and ruled in the first instance that Midea used Gree’s patented technology without authorisation in its four models of air-conditioning products.
Midea appealed to the Guangdong High People’s Court. The court held that the first-instance verdict identified the facts clearly and applied laws properly. Midea’s grounds of appeal were not sustainable. Therefore the court rejected Midea’s appeal and upheld the verdict made by Zhuhai Intermediate Court.
During the litigation, Midea filed a request with the Patent Re-examination Board to invalidate Gree’s patent during the legal proceedings, but also failed in that effort. In September of 2009, the board maintained the validity of Gree’s patent.
Ten years since WTO accession
2011 was the 10th anniversary of China’s accession to the World Trade Organization. In the past 10 years, China’s IP protection has improved significantly and the number of civil IP cases increased sharply and rapidly.
First-instance IP civil cases soared from 5265 in 2001 to 42,931 in 2010, increasing at an annual rate of more than 26 percent. From 2007 to 2010, the annual growth rate of first-instance civil IP cases the courts received exceeded 30 percent; in 2010, the growth rate hit 40 percent.
Between January and October 2011, IP rights civil cases received by the national courts numbered 52,708, exceeding the 50,000 mark for the first time, representing an increase of 42.2 percent on the previous year. Cases related to cultural fields increased rapidly. Copyright cases accounted for 60 percent of all IP cases.
