In early 2023, two final judgments in three related intellectual property matters were made public by the Supreme People’s Court of China (the “SPC”). These judgments represent a significant development in the protection and enforcement of intellectual property rights (“IPRs”) in China, with particular implications for foreign-invested enterprises. This article provides a brief review of these high-profile cases and offers recommendations for foreign companies navigating the commercial landscape in China.
The Cases: A Brief Overview
Golden-Elephant Sincerity (“GES”), a foreign-invested chemical company, holds proprietary rights to trade secrets and two patents concerning the production of melamine. In April 2014, it was revealed that Shandong Hualu-Hengsheng Chemical Co., Ltd. (“SHH”) was involved in developing a melamine production line that was strikingly similar to GES’s own design. Mingda Yin, GES’s former chief engineer, was implicated in the unauthorized transfer of confidential information to SHH, raising serious legal and ethical concerns.
Subsequent investigations revealed that Mingda Yin may have provided GES’s confidential information to two additional companies responsible for the design and/or engineering of SHH’s production line, Ningbo Fareast Chemical Group Co., Ltd. and Ningbo AT&M Environmental & Chemical Engineering Design Co., Ltd.
GES, along with other plaintiffs, filed a series of civil lawsuits against the alleged infringers for patent infringement and misappropriation of trade secrets. While the lower courts’ judgments were not entirely favorable to GES, the cases were then appealed to the SPC, and the SPC overruled the judgments of the lower courts and granted enhanced remedies in support of all of the plaintiffs’ requests.