Friday, October 05, 2007

Did Schneider Electric Infringed Its Own French Patent In China?

These days a high voltage commercial dispute is raging in the transnational low voltage products industry about a utility model, (which falls under the Patent Law, see article 2). What happened?

Saturday, September 29, the Wenzhou Intermediate People's Court ruled in the case of the Chint Group Co. versus Leqing Branch of Star Electric Equipment Co. Ltd. (the first defendant) an authorised distributor of Schneider Electric and the Tianjin-based joint venture in which Schneider Electric holds 75 percent (the second defendant), that both defendants infringed Chint's patent.

The court ordered:

  • that the defendants stop selling five models of products that are based on the technology owned by Chint Group;

  • Schneider Electric should pay 334.8 million yuan (4.3 million U.S. dollars) in ten days to compensate Chint's economic losses due to the unauthorized production and sales of the apparatus.

The Ministry of Commerce republished the Xinhua article which said: "Court investigations show that Schneider earned 883.6 million yuan (117 million U.S. dollars) by selling the five models of apparatus [which was used by Schneider in the manufacturing of C65a, C65N, C65H, C65L and EA9AN products (IP Dragon)], which fell in the protected scope of Chint's patent right, from August 2004 to July 2006 and made a profit of 334.8 million yuan." Read more here.

If this is true, Schneider Electric could be relieved by the verdict. If Schneider Electric has its patent registered in France this does not mean that it has a patent in China. However, Schneider Electric, claims that Chint Group's patent is invalid.

  • In November 1997, Chint Group filed an application, with the State Intellectual Property Office, for a patent for utility model named "A Miniature Circuit Breaker".

  • Schneider Electric's claim that Chint Group's patent is invalid was refuted by the State Intellectual Property Organisation (SIPO) and Chint Group was granted the patent right in March 1999.

  • Then Chint Group started manufacturing and selling the patented NB1 series.

Schneider Electric does not agree with the refutation of its claim that the patent is invalid. So it started a procedure against SIPO's decision at the Beijing No. 1 Intemediate People's Court. The outcome is unknown, yet.

The 334.8 million yuan is the highest amount of compensation a company has to pay in case of an intellectual property dispute in China, accourding to Xinhua. Schneider Electric considers to file a lawsuit at the Supreme People's Court against the verdict of the Wenzhou Intermediate People's Court.

Domique Buffier of Le Monde reports about it as well, in French, here. Thanks for the link CH of Mobimania.

UPDATE April 17, 2009: 

The case has been settled: read 'Schneider Patent Case to be Settled' by China Hearsay blogger Stan Abrams and the Xinhua article at China Daily 'French electrical firm pays $23m for IPR violation'

 'French electrical firm pays $23m for IPR violation

No comments: