A Texas U.S. District Judge doubled a jury award to $24.5 million and added $4.75 million in attorneys’ fees and expenses for a toy company that won a case against Telebrands Corporation. In doing so, the judge found that Telebrands infringed two patents on a water balloon device. The judge also found that Telebrands’ intentionally copied the patented product and used obstructionist tactics throughout the case. The product “Bunch O Balloons” is produced by toy manufacturer ZURU pursuant to a license with Tinnus. Telebrands copied the product and released an “As Seen on TV” infomercial-style ad campaign calling its product “Balloon Bonanza."
In 2015, Tinnus and ZURU sued Telebrands, claiming that Telebrands’ product infringed their patent. Judge Robert W. Schroeder III issued a 64-page opinion in which he added to the plaintiffs’ trial victory by doubling the jury award to $24.5 million. He also awarded plaintiffs $4.75 million in attorney fees and expenses and denied Telebrands’ motions for a new trial.
UPDATE: For those having problems accessing the podcast, it is available directly from this blog at this link.
My firm recently launched a new podcast, Blackletter Podcast. On the most recent podcast, Tom Dunlap interviewed my partner, Dragon Wang, and me regarding protecting and defending intellectual property in China.
On 4 January 2019, the National People’s Congress published a draft amendment to the Patent Law (the “Amendment”). See the Chinese version here. The Amendment is open for public comments through February 3, 2019 via the NPC website.
I wanted to expand here on the article I recently published at CGTN. In that article, I pointed out that as of January 1, 2019, the Supreme People’s Court (“SPC”) enacted a national appellate court for civil and administrative IP cases. However, it is important to note that the new Intellectual Property Rights Court for Appeals (“IPRCA”) is not just an appellate court, as it can also serve as a trial court.
In addition to hearing appeals in cases concerning invention patents, utility model patents, design patents, new plant varieties, layout design of integrated circuits, know-how, computer programs, and antitrust, the new IPRCA can also hear “major” and “complicated” first instance civil and administrative cases, as well as other cases that the SPC considers should be tried before the IPRCA. Exactly what the SPC considers “major” and “complicated” is not clear. Further, there is a catch-all category including “[o]ther cases that the SPC considers should be tried before the IP Court.”
China's Supreme People's Court in Beijing
Until the new court has some cases under its belt and/or the SPC provides additional interpretations, on Dec. 28, 2018, the SPC issued the Provisions on Issues Concerning IP Tribunal (the “Provisions”) providing details regarding the IPRCA. See here for the Chinese version of the Provisions or here for a (quite imperfect) Google-translated English version.
Article 2 of the Provisions states that the IPRCA shall have jurisdiction over the following:
Appeals of first instance civil judgments or rulings made by the Higher People’s Court, IP court or Intermediate People's Court in cases concerning invention patents, utility model patents, new plant varieties, layout design of integrated circuits, know-how, computer programs and antitrust;
Appeals of first instance administrative judgments or rulings made by the Beijing IP Court in cases concerning invention patents, utility model patents, design patents, new plant varieties, layout design of integrated circuits;
Appeals against first instance administrative judgments or rulings made by the Higher People’s Court, IP court or Intermediate People's Court in cases concerning invention patents, utility model patents, design patents, new plant varieties, layout design of integrated circuits, know-how, computer programs and antitrust;
Major and complicated first instance civil/administrative cases referred to in paragraphs (1), (2) and (3) of this article;
Cases in which the judgment, adjudication, or mediation decision of at first instance (of the cases referred to in paragraphs (1), (2), and (3) of this article) has already come into effect, against which the retrial or protest has been filed according to law or to the judicial supervision procedures;
Cases in which the application for extending the time limit for case hearing or for reconsideration of the jurisdictional disputes, fines, or the detention decisions has been filed regarding the first instance decisions (of the cases referred to in paragraphs (1), (2), and (3) of this article);
Other cases that the SPC considers should be tried before the IP Court.
Other than jurisdictional issues, the Provisions also provide some additional details. For example, Article 4 provides for electronic service and disclosure (hallelujah!). Article 5 allows for electronic and online evidence exchanges, pre-trial meetings, and other court functions to maximize efficiency (again, wonderful!). Article 6 states that the IP Court may, if needed, travel to the location of the original trial or case. Article 8 states that case filing information may be inquired through the electronic litigation platform and the China Trial Process Information Open Network. Although this seems to anticipate a structure not in existence yet, it is certainly cause for excitement because one of the most limiting features of Chinese litigation is the lack of a full electronic case management system.
I will continue to provide updates as we learn more about the new IP Court. For now, I am a huge fan and see this as a real game-changer. I look forward to finding out for what cases the new court will act as a trial court, and what resources will be available to ensure that the new organizational structure does not create a paralyzing bottleneck in an already-overloaded system.
This will be a short post, as I just wanted to point out that the Supreme People’s Court very recently granted InterDigital’s petition for a retrial in a case involving royalties to be paid by Huawei. The high court’s ruling overturns a decision by the Guangdong Province High Court decision that certain InterDigital Chinese patents should not exceed 0.019 percent of the actual sales price of each Huawei product.
I will try to get the raw data shortly, but the English-language report saying this is here: https://news.bloomberglaw.com/ip-law/interdigital-granted-huawei-patent-case-retrial-by-china-spc This is a big deal, as it will make it nearly impossible for Chinese and other companies to cite IDC v. Huawei for the purpose of supporting a 0.02% royalty rate. Indeed, Chinese damages law is quickly evolving to catch up with the rest of the progressive patent law and procedure we continue to see coming out of China. This is great news for innovation, for China, and for the innovators worldwide.
Because not everyone can read Chinese, here are downloadable PDF copies of the bilingual versions of both orders from the Fuzhou court regarding the injunction against Apple requested by Qualcomm:
Order No. 1208
Order No. 1209
Note that in China, each patent requires a different "case." Here, because there are two patents, there are two separate orders: one for Patent No. ZL201310491586.1 and one for ZL200480042119.X. I encourage you to read both orders, although they are largely the same.
Interesting facts from these documents:
Qualcomm provided an injunction bond of RMB 300,000,000 (US $43,481,553).
Claims 1 and 17 of the '586 patent and claims 1 and 7 of the '119 patent were found infringed.
The claim language in English is provided in the orders.
For the '586 patent, Qualcomm did not accuse products manufactured by Pegatron Corporation and for the 119 patent, Qualcomm did not accuse products manufactured by Pegatron Corporation and Compal Electronics Inc.
The order in both cases is effective immediately and until remains effective until the judgment of each case comes into effect (i.e., after trial).
Apple may apply for reconsideration once within 10 days after receiving the order, but the enforcement of the order will not be suspended during the period of reconsideration.
Both orders state that the four defendants (Apple Computer Trading, Apple Beijing, Apple Shanghai and Apple Fuzhou) are likely to infringe patent rights or aid the infringement and that the Court holds that the accused acts exist actually and continuously, and the trial of this case will last a certain period until the final judgment is rendered. Further, during this period, Qualcomm is likely to suffer irreparable losses due to the accused acts of Apple Computer Trading, Apple Beijing, Apple Shanghai, and Apple Fuzhou.
Qualcomm is represented by LexField Law Offices and local counsel, Fuzhou Zhanhui Patent Office.
I have officially joined the U.S. law firm of Dunlap, Bennett & Ludwig (DBL) as a Partner. DBL is a leading full-practice law firm with offices in 17 cities in the United States, China, Europe, Canada, and Puerto Rico. I will also be working with IntellStrategy, a Chinese patent agency. IntellStrategy is closely affiliated with, but separate from, DBL. The DBL-IntellStrategy alliance allows our team in North America, Europe, and China to achieve goals for our clients that other law firms, patent agencies, and consultancies cannot. For example, unlike many international firms which "cannot assist clients with Chinese IP law," IntellStrategy can directly represent Chinese and international clients in China's courts and before the Chinese patent office and Patent Reexamination Board.
I will continue to split my time between Beijing and Houston. One of the biggest advantages is that I can represent clients in both the U.S. and China now! I am still technically a consultant in China because I am not Chinese and cannot be admitted to the Chinese bar (but thanks to IntellStrategy, my colleagues can!). However, I will continue to manage all types of IP issues in China, focusing on patent licensing and litigation.
Further, I can use my Texas and New York bar cards again! I love my Chinese practice, but I miss arguing in court, taking deposition, and even (gulp!) managing discovery! Also, because DBL has an office in Europe, I can help companies enforce their patents simultaneously in the most important patent courts in the world.
Joining me in my move will be my entire Chinese team, including patent litigation superstar, Dragon Wang.
In case you are wondering, my short stint at my prior firm did not work out for reasons mostly related to conflicts. It is what it is, and I am very excited to work with my new colleagues!
The Fuzhou Intermediate People’s Court in China has granted Qualcomm's request for two preliminary injunctions against four Chinese subsidiaries of Apple Inc. The affected Apple products are the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X.
The patents at issue enable users to adjust and reformat the size and appearance of photographs, and to manage applications using a touch screen when viewing, navigating and dismissing applications on their phones.
I have not seen the order, but Apple is saying that the injunction only includes older versions of iOS. This is a developing issue and I will provide information as I receive it. What is clear, though, is that because this is a preliminary injunction, the injunction should NOT be stayed pending appeal. Also, there may be some political issues at play because whereas Qualcomm has paid its dues in China, Apple has never been a friend of China. One need only consider that Qualcomm is a supplier to some of the most important companies in China, whereas Apple is a competitor to those same companies.
FYI: Here is a good article on some of the details as they are known to Reuters.
Stay tuned - this one is big and could get bigger. I need to go now because I have to go file a bunch of cases in Fuzhou!
A very interesting article was recently published in China on why NPEs are good for China. It focuses on iPEL, an NPE that has over 1000 Chinese patent families. The article was published by IP House, a Chinese publisher that has a contract with the Chinese government and courts to publish the most database of IP-related court decisions in China. For a PDF of the article in Chinese and English, click here.