File No. C090154
Case Name: BASF, Germany v. Nantong Shizhuang Chemical Co., Ltd.; Beijing Sunshine Clover Biochemical Technology Co., Ltd.
Filing Date: February 21, 2008 (by the appeal court)
Plaintiff: BASF, Germany (BASF)
Defendant: Nantong Shizhuang Chemical Co., Ltd. (Shizhuang Co.); Beijing Sunshine Clover Biochemical Technology Co., Ltd. (Bio Clover Co.)
Appellant: BASF, Germany (BASF); Nantong Shizhuang Chemical Co., Ltd. (Shizhuang Co.)
Appellee: N/A
Cause(s) of Action: Patent infringement
Remedy Requested: By appellant BASF: (i) pay damages for economic losses in the amount of RMB 500,000; (ii) destroy the infringing product; (iii) recognize the patent related product as a new product. By appellant Shizhuang Co.: revoke the trial court’s ruling and reject BASF’s original litigation requests.
Trial Court: PRC Beijing Second Intermediate People’s Court
Appeal Court: PRC Beijing People’s High Court
Disposition: The trial court ruled in favor of the plaintiff with regard to the charge of patent infringement. The trial court ordered that: (i) Shizhuang Co. immediately stop making soil sterilant using the patented method and stop selling soil sterilant made using the patented method; (ii) Bio Clover Co. immediately stop selling the infringing soil sterilant; (iii) Shizhuang Co. pay damages for economic losses in the amount of RMB 200,000 and compensate for appropriate fees paid by the right holder to stop the infringing act in the amount of RMB 13,000. The appeal court subsequently affirmed the trial court’s ruling.
Decision Date: October 09, 2008
Summary: The plaintiff (BASF) charged the 1st defendant (Shizhuang Co.) with infringing on its patent right for the invention of a preparation method of near dust-free 4H-3, 5-Dimethyl-1, 3, 5-thiadiazole-2-thione granules by using the patented method to make a soil sterilant. The 2nd defendant (Bio Clover Co.) was likewise charged for acting as the sales representative of the 1st defendant for the said soil sterilant. The trial court ruled largely in favor of the plaintiff. The appeal court subsequently affirmed the trial court’s ruling.
The trial court held that BASF’s patent related product was not a new product as before the patent filing date PRC Ministry of Agriculture Institute for the Control of Agrochemicals (ICAMA) published BASF’s patent related product in its Pesticide Registration Public Announcement, in addition to the fact that the patent description itself also described the purpose of the invention as aiming at a simpler and more convenient method of making dazomet products. The notarized testing report BASF submitted showed that the allegedly infringing soil sterilant contained three characteristic impurities, which BASF claimed to be the result of using the patented method. As Shizhuang Co. did not submit evidence proving that using other preparation method would also result in the same characteristic impurities, the trial court held that Shizhuang Co. infringed on BASF’s patent right and was to take liability for such remedies as ceasing the infringing act and paying damages. The trial court ordered Bio Clover Co. to stop selling the infringing product without having to pay damages in view of its legitimate acquisition of the infringing product. The trial court did not support the full amount of damages BASF requested, deeming it unreasonably high. The trial court also rejected BASF’s request to destroy the infringing product, deeming that injunction would suffice.
The appeal court affirmed the trial court’s judgment that the patent related product was not a new product, as, compared with similar products manufactured before the patent filing date, the patent related product did not show significant differences in composition, structure, quality, performance, and function. Even though the testing report given by Shanghai Pesticide Research Institute was ordered by BASF unilaterally, there was no evidence that the Institute was an interested party; and as Shizhuang Co. did not submit anti-evidence negating the result of the testing report or evidence supporting its own claim that it used a different preparation method, the appeal court held that Shizhuang Co. committed patent infringement. The appeal court also affirmed that injunction alone would stop the infringing act and there was no need to enforce the destruction of the infringing product. The appeal court further affirmed the amount of damages awarded by the trial court by taking into consideration the nature and the duration of the infringing act, and the degree of subjective fault of the infringer. Based on PRC Civil Procedure Law Article 153 (1), the appeal court rejected both appellants’ appeal.
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