As you may have heard, electrical goods firm Schneider was dinged with a US $45 million adverse judgment in a Wenzhou court recently - this was a patent infringement suit brought by a Chinese company from Wenzhou. I think the news of this came out during the National Day holiday. The newspapers had the normal writeups, plus as usual IP Dragon covered the basics - check that out here.

I have avoided posting on this until I discovered if there was anything exciting to talk about. My usual practice is not to announce every single IP decision involving a foreign litigant, but to discuss those cases that are interesting. In this instance, I waited until I got back to the office and checked out the facts in a little more detail.

So far, I have not been able to get a copy of the judgment, and the facts of the case as presented third-hand in the press are, as usual, bereft of the details I want. What I have read is that these two companies have been fighting over IP in several jurisdictions since the late 1990s, and the Wenzhou decision was the latest in this long struggle. Trying to unravel those sordid details in the hopes of using this case as some sort of precedent does not seem possible.

So anything interesting here? Well, the judgment is big — gigantic and unprecedented for China. But this was a local court in Wenzhou that may have been, shall we say, a bit favourably inclined towards the local plaintiff. No idea whether that judgment is going to ultimately stick and whether it may be enforced some day against the specific defendant, which was the Schneider JV in Tianjin (they own 75%).

The one question I am left with here is how the hell that court came up with that $45 million profit number. What sort of sales records was it using? How did it get those records? Important questions, I think, given that China does not have a U.S.-style system of discovery in civil litigation. It’s not easy to get these kinds of documents, and I’m wondering if the plaintiff petitioned the court to discover this stuff on site; the law allows for this, but it doesn’t happen very often. Other possibilities include a prior raid action by AIC that confiscated sales records, or perhaps some public or quasi-public records that the plaintiff/court were able to get.

Until I get some answers, this story is going to remain in the “aberrant decision” file and will not bother me too much.

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