IP court helps appliance giants settle dispute

Two global home appliance giants — one a foreign company — were able to settle more than 20 intellectual property disputes through mediation by a Chinese court.

The settlement through the Intellectual Property Court with the Supreme People's Court, China's top court, played a crucial role in solving the conflict and demonstrated Chinese judicial endeavors in protecting IP rights, according to the companies.

Dissatisfied with a lower court ruling, Dyson, a world-renowned manufacturer of household appliances that originated in the United Kingdom, appealed to the SPC last year, claiming that its patent for a vacuum cleaner had been infringed by Dreame, an intelligent technology company in Suzhou, Jiangsu province.

The SPC's IP Court said in a statement that its panel reached a consensus after carrying out sufficient inquiries, investigations and technical comparisons of the patent, which resulted in a final judgement.

The collegiate bench, however, did not announce details of the verdict, which entailed over 20 civil and administrative IP lawsuits — not only in China, but also in European countries such as Germany.

"Both litigants are well-positioned enterprises, each with a technical research and legal team, and have their own expectations and evaluations for each dispute," said Ke Xuning, the judge responsible for hearing the case.

He said that if the court handed down its own ruling, it would not be able to substantially end the conflict between the parties, and it might even intensify their problem or produce more disputes, he explained.

In his view, such perennial disputes take lots of manpower, material resources and financial costs for the enterprises. Once a company's product is identified as an infringement, its related sales profits will likely be the basis of compensation, bringing uncertainty to business decisions, he said.

Therefore, he said, the panel decided to help the two litigants solve the root of the conflict, making them realize the importance of technological innovation and fair competition.

It set up a platform for the pair to communicate with each other, acting as a third-party to mediate and guide them to look at the overall development and long-term benefits while focusing on their own interests.

The solution was welcomed by the companies.

"There is no doubt about the determination of protecting IP rights," said Miao Gujin, lawyer for Dreame. "But we would rather find a good way to thoroughly solve the conflict as soon as possible."

Wu Xiaoqu, lawyer for Dyson, also lauded the IP Court's move, saying that the judge was patient and professional during the mediation, asking both sides to consider their conflict comprehensively and calmly.

After repeated communications between the panel and the litigants as well as negotiations between the companies, the two companies signed a settlement agreement on the case heard by the IP Court and other disputes around the world in May.

The two sides agreed that they will first fully communicate and negotiate, rather than directly initiate lawsuits, if meeting patent-related problems, or they will focus more on businesses.

Dyson highlighted the significant role of the mediation in solving the disputes.

"It gave my client a new understanding of the Chinese court," Wu said, adding that the IP Court's settlement this time has proved that it's possible to keep interests at a lower economic cost and with less business pressure.

Dreame also said that the settlement was made based on long-term interests of both sides, and it has helped root out the conflict between the pair.

In recent years, Chinese courts have seen a rapidly growing IP cases involving foreign affairs, with more overseas litigants who have preferred to choose Chinese courts to solve their disputes, according to the SPC.

Data released by the top court in April showed that courts nationwide concluded about 9,000 foreign-related IP lawsuits last year, and judges have always upheld the principle of giving equal protection to litigants, no matter where they come from.

Every court has been required to respect international conventions during case handling, trying their best to serve high-quality opening-up and create a sound business environment by rule of law, the top court added.