The Intellectual Property Court of the Supreme People's Court: Leveraging the "Oriental Experience" of Combining Mediation and Judgment to Facilitate a Global Package Settlement of Standard Essential Patent Disputes

Case Brief

A certain foreign company is the right holder of six standard essential patents involved in the case, which relate to broadband voice signal processing. It is alleged that mobile phones produced and sold by a certain technology company in Chongqing and a certain technology company in Shenzhen fell within the scope of its patent protection, thereby constituting patent infringement. The foreign company filed lawsuits in two jurisdictions regarding the six patents involved: first, it sued the technology company in Chongqing and a certain equipment store in Taijiang before the Intermediate People's Court of Fuzhou City, Fujian Province, requesting a ruling that the technology company in Chongqing compensate for its economic losses and reasonable expenses for rights protection in the amount of 70.6 million yuan; second, it sued the technology company in Shenzhen and a certain trading company in Nanjing to the Higher People's Court of Jiangsu Province, requesting a ruling that the technology company in Shenzhen compensate for its economic losses and reasonable expenses for rights protection in the amount of 18.6 million yuan. The six patents involved were the same as the patents involved in the six cases (hereinafter referred to as the previous six cases) where a certain foreign company sued a certain technology company in Guangdong for infringement on invention patent rights, as adjudicated by the Intellectual Property Court of the Supreme People's Court in 2023. The courts of first instance, referring to the previous six cases adjudicated by the Supreme People's Court, rendered rulings that the technology companies in Shenzhen and Chongqing should compensate the foreign company for economic losses and reasonable expenses for rights protection. The parties, dissatisfied with the original rulings, filed appeals. After more than three months of patient mediation and continuous communications by the collegial panel of the second instance of the Intellectual Property Court of the Supreme People's Court, the two parties to the two cases reached a global package settlement. This settlement resolved all existing and potential disputes at once, and an agreement was reached on the settlement amounts for the two cases based on the rate determined in the previous six cases. After receiving the mediation statements issued by the court of second instance, both technology companies in Chongqing and Shenzhen fulfilled the settlement agreements within the agreed timeframe.

Typical Significance

Firstly, the collegial panel accurately perceived and addressed the core concerns and potential worries of the parties. It guided both parties to jointly examine the overall picture behind the disputes, pursuing a win-win outcome rather than a zero-sum game. Secondly, the collegial panel elucidated legal principles and adjudication rules to the parties, highlighting both opportunities and risks in the litigation process, guiding them to form reasonable expectations regarding the litigation results, thereby promoting a shift from "resolute confrontation" to "rational negotiation". Thirdly, from a global perspective, the collegial panel guided the parties to transcend individual disputes and, through strategic negotiations, seek comprehensive and fundamental solutions to both existing and potential disputes worldwide.

(Case source: the Supreme People's Court)