In the two years since its establishment, the Intellectual Property Court of the Supreme People's Court has given full play to the advantages of the system and continuously strengthened the trial of technical intellectual property rights.
The Intellectual Property Court of the Supreme People's Court of China released the Top 10 Technical Cases in 2020.
"Vanillin" Technology Secret Large Amount Compensation Case
[Case No.] (2020) Supreme People’s Court Zhi Min Zhong No. 1667
[Basic case]
Jiaxing Zhonghua Chemical Co., Ltd. and Shanghai Xinchen Co., Ltd. jointly developed a process for producing vanillin by the glyoxylic acid method and protected it as a technical secret. The process is safe to implement, easy to operate, and has good effects. Compared with the traditional process, Jiaxing Zhonghua Chemical Company has become the world's largest vanillin manufacturer based on this process, occupying about 60% of the vanillin global market share.
Jiaxing Zhonghua Chemical Company and Shanghai Xinchen Company believed that Wanglong Group Company, Wanglong Technology Company, CFS Wanglong Flavours (Ningbo) Co., Ltd., Fu XX, Wang XX used their vanillin production process without permission and violated their technical secrets. Therefore, they filed a lawsuit to the Zhejiang Higher People’s Court, requesting an order to stop the infringement and compensate for economic losses and reasonable expenses of 502 million yuan.
The Zhejiang Higher People's Court determined that the infringement was established, and ordered the suspension of the infringement, compensation of 3 million yuan for economic losses and a reasonable expenditure of 500,000 yuan for rights protection. While making the judgment of the first instance, the Zhejiang Higher People's Court made a behavior preservation ruling, ordering Wanglong Technology Company and CFS Wanglong Flavours (Ningbo) Co., Ltd. to immediately stop using the technical secrets involved in the case, but Wanglong Technology Company and CFS Wanglong Flavours (Ningbo) Co., Ltd. did not stop the using behavior.
Except for Wang XX, all parties in this case refused to accept the judgment of the first instance and appealed to the Supreme People's Court. In the second instance, the amount of compensation requested by Jiaxing Zhonghua Chemical Company and Shanghai Xinchen Company fell to 177 million yuan. The Intellectual Property Court of the Supreme People's Court, based on the economic loss data provided by the right holder, comprehensively considered factors including the huge commercial value of the technical secret involved, the large scale of infringement, the long infringement period, and the refusal to execute the effective act preservation ruling, etc., CFS Wanglong Flavours (Ningbo) Co., Ltd., Fu XX, Wanglong Technology Company and its legal representative Wang XX jointly compensated the right holder for economic losses of 159 million yuan. At the same time, the court decided to transfer the suspected criminal clues to the public security organs.
[Typical Significance]
This is the case of infringement of trade secrets with the highest compensation amount sentenced by the court in China. Through the judgment of the case, the Intellectual Property Court of Supreme People’s Court protected the core technologies of the significant industry by law, increased the effort to combat malicious infringement indeed, the joint and several liabilities of the legal representative of a company engaged in infringement has been clarified. The suspected criminal clues were transferred to public security bureaus by law, and the civil tort relief and criminal punishment of the connection were promoted, which demonstrates the clear judicial attitude of the people's courts to protect intellectual property rights strictly by law and severely crack down on malicious infringements.
