Beijing Intellectual Property Court (BIPC) today (March 22, 2017) issued its judgment in the high-profile case IWNComm v. Sony, finding that Sony has infringed the standard-essential patent of IWNComm's in dispute. The court granted a permanent injunction against Sony on the grounds that it is Sony's default that caused the parties' failure to reach a license agreement. The court also awarded damages of RMB 8.63 million, based on a rate 3 times the royalty rate IWNComm submitted as reference.
The court made the judgment after the Patent Reexamination Board had upheld the patent earlier in February 2017 in an invalidity action filed by Apple against the same patent.
The case has been extensively reported and intensively followed within and outside China, with a central question being whether the court would grant an injunction.
The court gives the following reasoning for granting the injunction:
"The court should consider whether the parties had fault in prior licensing negotiation in deciding whether to grant an injunction. The patent in dispute is a core patent of the WAPI technology, and is essential to a national compulsory standard. In the negotiations, the plaintiff explained the patented technology relevant to WAPI and provided a list of its patent and a draft license agreement. Based on this, the defendant should be able to determine if the WAPI software within its mobile phone in dispute is covered by the claims of the patent in dispute, without the need for the plaintiff to provide a claim comparison chart. Thus, the defendant's request for the plaintiff to provide the claim chart was unreasonable. Meanwhile, since a claim chart would include the patent owner's opinions and arguments, the plaintiff was reasonable to ask the defendant to sign a non-disclosure agreement before such a claim chart were to be provided."
On damages, the plaintiff submitted 4 license agreements it signed with third parties. The court also obtained Sony's quantity of sales based on data from the Ministry of Industry and Information for mobile phones (each mobile phone should be granted an access permit before it can be sold in China). Upon the plaintiff's request, the court calculated the damages by multiplying the quantity by a royalty rate 3 times the rate of the license agreements the plaintiff submitted.