A Chinese low-voltage product company won a patent infringement lawsuit against France's Schneider Electric and its Chinese sales agent on Saturday. The suit involves 330 million yuan in compensation.

 

A court in east China's Zhejiang Province ordered that the Tianjin-based joint venture, in which Schneider holds 75 percent of stakes, and its authorized distributor Leqing Branch of Star Electric Equipment Co. Ltd. in Zhejiang, stop selling five models of products that are based on the technology owned by Chint Group, China's leading manufacturer of low-voltage electric apparatus.

 

In addition, the world's leading electric equipment maker should pay 334.8 million yuan (US$44.6 million) within ten days to compensate for Chint's economic losses due to the unauthorized production and sales of the apparatus, according to the verdict handed down by Wenzhou Intermediate People's Court on Saturday.

 

Court investigations show that Schneider earned 883.6 million yuan (US$117 million) by selling the five models of apparatus, which fell in the protected scope of Chint's patent right, from August 2004 to July 2006 and made a profit of 334.8 million yuan.

 

Chint filed the lawsuit against Schneider in August last year.

 

The amount of compensation is believed to be the highest in China so far in terms of intellectual property disputes.

 

The State Intellectual Property Office granted Chint with the patent for a utility model of "a miniature circuit breaker" in 1999. Schneider used it in the manufacturing of C65a, C65N, C65H, C65L and EA9AN products.

 

Before the court ruling, the State Intellectual Property Office had refuted Schneider's application to invalidate the patented technology, thus creating "a crucial step for Chint that confirms the legal foundation of the case," said Xu Zhiwu, Chint's legal representative.

 

Schneider's attorney Ding Chen said the company would possibly file a lawsuit against the verdict all the way up to the Supreme Court.

 

He noted that Schneider had sued for the validity of the disputed technology in Beijing No.1 Intermediate People's Court. The court began trial proceedings on Monday. The final ruling is yet to be made.

 

The two rivals have been accusing each other over patent infringement since 1999, which indicates fierce market competition.

 

Chint grew from a small workshop with only 50,000 yuan as initial investment into a competitive manufacturer of low-voltage electric apparatus in the world market. It has been trying to expand into Germany, Italy, France and some other countries once dominated by Schneider.

 

Suing business rivals for patent infringement is a common tactic that some transnational companies use to elbow out competitors and dominate the market, said Nan Cunhui, board chairman of Chint.

 

Nan attributed the fast growth of his company to technological innovation and intellectual property protection endeavors over the past 23 years.

 

He said that winning the case against Schneider would help boost the confidence of Chinese enterprises, encourage them to pursue renovation and pay more attention to intellectual property protection.

 

(Xinhua News Agency September 30, 2007)