Verdict of the Paris Tribunal de Grande Instance (2010/01/28)

On April 10th, 2009, the Paris Tribunal de Grande Instance announced that the Wenzhou Huarun Electrical Machinery Company (ACHR) had won the lawsuit against the French TI Group Automotive Systems S.A.S.(TI SAS), in which the latter accused the former of infringing upon its patent rights and engaging in unfair competition. The court made the announcement after concluding its 8th trial of the case that had dragged on for up to four years.

According to the verdict of the Paris Tribunal de Grande Instance, TI SAS’s patent-related charges were invalid and ACHR had not violated patent rights of TI SAS, or engaged in any unfair competition. The Verdict also decided that ACHR would not be responsible for any lawyer fee or expenses or the lawsuit and that the plaintiff instead should pay 8,000 Euros of lawyers’ fee to ACHR.

After the verdict was made following the first instance, TI SAS did not lodge an appeal within the legal deadline, so that the verdict became final.

The story can be traced back to Oct 18th, 2005, when the automotive show EQUIP 2005 was underway in France. Representatives of TI SAS and Judiciary officers emerged all of a sudden at the ACHR booth and took away two sample products on account of “patent infringement” and without showing any order of freezing from the court. Then on Oct 31, TI SAS sued ACHR at the Paris Tribunal of Grande Instance for what it called involvement of “patent violation” and “unfair competition”. It accused ACHR of violating parts 1 to 4 and 6 to 13 of its patent coded FR86 02420 which constituted a case of “unfair competition”. It asked the court to stop ACHR from continuing such acts, producing or selling relevant products, and to pay TI SAS 400,000 Euros in compensation and another 30,000 Euros as the attorney fee. It further asked the court to demand ACHR publish the verdict in five designated publications, the expenses of which were to be paid by ACHR.

ACHR is a well-known Chinese company specializing in designing and producing electronic fuel injection pumps. Most of its products are exported to such international markets as Europe and North America. As a new and hi-tech enterprise, ACHR has all along stressed innovation and patent application and maintained a group of patent consultants and IPR lawyers. It so far owns 35 patents. When we worked on our own product, we believed that the FR8602420 patent of TI SAS is not an advanced design. Our product is based on a brand-new design, which differs greatly from that of TI SAS in both structure and theory. Our product is more advanced in that it is more simpler in structure and easier to produce. So we were certain that ACHR had not violated any copyright of TI SAS and that the company’s lawsuit against our company aimed at suppressing ACHR, undermining its reputation and preventing its products from entering into the European market.

Facing such an overseas lawsuit for the first time and the likelihood of enormous court costs and compensation, some people would choose to be passive and shy away and some others would opt to seek a compromise via a lawyer by paying TI SAS a certain amount of money. But such reactions would seriously hurt the reputation of ACHR and tarnish the overall image of Chinese products. ACHR then decided to take an active approach and respond to the charges squarely. It was clear that such a lawsuit, which often drags on incessantly in a foreign country, would incur huge expenses and involve a certain level of a risk. But to facilitate future development of ACHR, and to demonstrate to the world that China is moving from “Made in China” to “Created in China”, and also because ACHR was confident that it had not infringed on TI SAS’s patents or involved itself in any unfair competition, it therefore decided to respond actively to the charges no matter how many obstacles it would have to get over and how much costs and time it would have to spend.

In doing so, our company selected well-known law firms that had accumulated experience in dealing with overseas IPR-related cases, as its domestic agents. It also hired noted French patent lawyers and process attorneys to make preparations for and appearances in court proceedings. It was determined to win the case.

The French attorneys that ACHR hired asked the court to make the following judgments.

1) All TI SAS’s requests in relation to FR8602420 are invalid.

2) ACHR has not violated any part of TI SAS’s FR8602420 patent.

3) The plaintiff does not provide any proof showing that ACHR has caused it any loss. ACHR’s activities do not constitute unfair competition.

4) The lawsuit has caused losses to ACHR and the company demands compensation for its court costs.

After a total of eight trials, the Paris Tribunal de Grande Instance finally issued the verdict under which ACHR won the case against TI SAS. In the course of the lawsuit which lasted for nearly 4 years, we accumulated plentiful experience in confronting IPR issues raised by international giant companies and realized even further the importance of innovation and IPR building for an enterprise. Our company will continue to explore the international market and make our due contributions to China’s efforts to develop into a strong and powerful nation.