Continuing the trends in higher damage awards that rely less on statutory damages and more on actual damages, the Beijing IP Court on December 8 awarded damages of 50,000,000 RMB in favor of the holder of a “USB Key” patent According to deputy chief judge Chen Jingchuan 陈景川, this is the highest damage award of the court to date. The damages included 49 million RMB in civil compensation plus 1 million RMB in legal fees. The case is Watchdata vs Hengbao (北京握奇数据系统有限公司 vs 恒宝股份有限公司), two Chinese domestic companies, for patent number ZL200510105502.1. The plaintiff is a Beijing-based company involved in digital authentication and transaction security.
The patent in suit relates to USBkeys distributed by banks to customers for security. The court found infringement of both its product claims on a USBkey itself and its method claims for authentication when users perform an online money transfer. The damages were based on a calculation of defendant’s sales and profit for patented products. In addition, when three of the fifteen infringing banks and the defendant refused to provide evidence of their sales, the court used evidence provided by the plaintiff. The basis for the court’s reliance on this evidence was a judicial interpretation on refusals to supply evidence (My guess: 《最高人民法院关于民事诉讼证据的若干规定》 (2001年12月21日)， article75 第七十五条 有证据证明一方当事人持有证据无正当理由桓不提供，如果对方当事人主张该证据的内容不利于证据持有人，可以推定该主张成立。)
Commentators have also noted that this may be the first time that the court has awarded legal fees to a prevailing party based on the time spent on the matter, which is also positive news for prevailing parties in Chinese commercial litigation.
Update January 24, 2017: Here’s another useful blog from the comparative patent remedies blog from Yijun Ge, a student of both Prof. Cotter and Fordham. This blog goes into greater detail on the methodology for calculating damages.
Categories: Beijing IP Court, Chen Jinchuan, China IPR, Damages, Patent
Your reports and comments on the Chinese cases have been helpful. I have a little question about this report.
I noticed the patent number is ZL200510105502.1? Is the number correct?
Actually, there has been patent disputes between the parties. In a previous case(（2015）高民（知）终字第02707号), the patent in suit is ZL200510105502.1. The Beijing superior people’s court made a final call on that case (本裁定为终审裁定。
Accordingly, I’m a little skeptical about the patent number in the report.
See link: http://wenshu.court.gov.cn/content/content?
Thanks, I pulled the number off of other reports. Perhaps the reports were erroneous…will need to update with the actual case info.