Beijing Intellectual Property Court, in a recent ruling, awarded damages of 50,000,000 RMB in favor of the patent right owner. This is the highest damage award of the court since it was founded in November 2014.
Being a manufacturer of USB keys used as electronic authentication devices in financial services, the plaintiff, Watchdata Co Ltd filed the lawsuit in February 2015 against peer manufacturer Hengbao Co Ltd. Watchdata accused Hengbao of developing and selling USB key products to "scores of banks across China" using its patent called "physic identification method and electronic device" without its authorization. It requested the defendant cease its infringement and asked for compensation of 49 million yuan, plus 1 million yuan in litigation costs.
The court ruled in favor of the plaintiff and decided to calculate the compensation by multiplying the sales volume of the infringing products by the reasonable profit of each patented product.
Investigations found the specific sales volume of the infringing products to 12 banks nationwide, which led to actual damages of about 48.1 million yuan. The court also confirmed that Hengbao had provided infringing products to another three banks, but was unable to acquire sales data from the banks or the company because Hengbao refused to hand in related data. Based on common practices, the court presumed that the illegal profit from selling the devices to the three banks was at least 2 million yuan.
The court also supported the demand of the litigation cost, commonly known as attorney fees, considering the necessity of hiring agents, the difficulty of the case and the actual contribution of the lawyers. For the first time, the Beijing Intellectual Property Court recognized the above three factors as the principles to judge attorney fees.