Hualu-Hengsheng may compensate 80 million for patent infringement!

Shandong Hualu-Hengsheng Chemical Co., Ltd. (hereinafter referred to as "Hualu-Hengsheng") is acompany with fertilizers, chemicals, thermal power, and gas as its main business. On July 1, Hualu-Hengsheng announced that at the end of 2016, Sichuan Golden-Elephant Sincerity Chemical Co., Ltd. (hereinafter referred to as "Golden-Elephant Sincerity") and Beijing Yejing Technology Co., Ltd. (hereinafter referred to as "Yejing Technology") sued Hualu-Hengsheng, Ningbo Research & Design Institute of Chemical Industry Co., Ltd. (hereinafter referred to as "Ningbo Institute of Chemical Industry"), NingboFareast Chemical Group Co., Ltd. (hereinafter referred to as "Fareast Group") and Yin Mingda (former chief engineer of Golden-Elephant Sincerity) for patent infringement, the patents involved are Patent Applications No. CN201110108644.9 and No. CN201010216437.0. The two plaintiffs alleged that the four defendants cooperated in the engineering design, manufacturing and construction of the melamine project, and caused infringement damage to them. Recently, the High People’s Court of Guangdong Province ruled that Hualu-Hengsheng immediately stopped infringing on the patent rights of the melamine production method owned by Golden-Elephant Sincerity and its subsidiary Yejing, and compensated the two plaintiffs for economic losses and reasonable rights protection costs totaling 80 million yuan in the first trial.

During the trial of the case, the plaintiffs claimed that the contents of the "Safety Evaluation Report" and "Design Article" submitted by Hualu-Hengsheng to the relevant safety supervision department for record objectively reflected the technical scheme of the melamine project involved in the case, and it could be concluded that the four defendants had infringed on their patent rights. Hualu-Hengsheng argued that the content of the patent documents is different from the technical scheme of its melamine project, and the relevant technical scheme of the melamine project is its trade secret, so Hualu-Hengsheng clearly refused to conduct on-site inspection in the court hearing. When the court staff went to Hualu-Hengsheng factory for evidence preservation according to law, Hualu-Hengsheng took various measures to obstruct the court staff from performing their official duties and refused them to enter the project site. The behavior was judged by the court as seriously hindering civil litigation and decided to fine Hualu-Hengsheng 800,000 yuan. Evidence preservation is an important procedure in civil litigation. If the scope of evidence to be preserved involves trade secrets, the relevant right holder may request the court to take reasonable confidentiality measures. Hualu-Hengsheng's refusal to preserve evidence on site by the court had adverse effects on itself.

Hualu-Hengsheng also announced that in October 2011, it signed a contract with Ningbo Institute of Chemical Industry andFareast Group, which agreed that Ningbo Institute of Chemical Industry andFareast Group guaranteed that all the proprietary technology and related technical materials provided by them were legally held. If a third party accused the project of Hualu-Hengsheng of infringement, the two companies in Ningbo shall be responsible for the negotiation and assume full responsibility which would have an important impact on the business activities of Hualu-Hengsheng. Hualu-Hengsheng has appealed to the Supreme People's Court against the judgment of the first trial, and the administrative litigation on the invalidation decision of the patent involved is still in progress.