KANGRUI Law Firm
★ FlagshipWon

SPC Top-Ten IP Case — Battle Over an Air-Conditioner Custom-Curve Invention Patent for a Global Appliance Leader

Vigorously contested on three focal issues: patent validity, the doctrine of equivalents and a breakthrough on the statutory damages ceiling. The 2-million-RMB damages award at first instance was affirmed on appeal; the case was selected as one of the Supreme People's Court's Top-Ten IP Cases of the year.

Outcome
Won
Tracks / Procedures
Administrative litigation (1st instance) / Civil litigation (1st & 2nd instance)
Forum
Beijing No. 1 Intermediate People's Court
Year
2014
01 · Background

Case Summary

The client is a leading global Chinese appliance company, owner of an invention patent titled "Method for Controlling an Air Conditioner to Operate Along a User-Defined Curve". The patent had been previously challenged before the Patent Reexamination Board and held valid; the challenger then sued for administrative review at the Beijing No. 1 Intermediate People's Court. Kangrui represented the client as a third party in the administrative proceedings, defending against attacks on claim clarity, eligibility, novelty and inventive step.

Following the affirmation of patent validity, the patentee sued a leading industry competitor and third-party retailers for infringement at the Zhuhai Intermediate People's Court (Guangdong), based on multiple split-type air-conditioner models.

02 · Legal Issues

Key Issues

  • Do the two "characterized in that" clauses in the claims render scope unclear?

    The opposing side argued the two clauses created scope ambiguity. We needed to show that the two clauses respectively define the overall method steps and the specific configuration of the "user-defined sleep curve" — two levels of progressive limitation, not unclear.

  • Is replacing non-volatile memory with control-chip RAM equivalent infringement?

    The patent stored parameters in non-volatile memory chips; the accused product stored them in volatile control-chip RAM. In ordinary use, users typically do not remove the remote's batteries, so the effect is substantially the same — does this constitute equivalent infringement?

  • Can the three un-sampled models also be found infringing?

    The plaintiff obtained physical evidence of only one model, but the accused product installation manual expressly stated it applied to the other three models. In the absence of contrary evidence, can the other three also be presumed infringing?

  • How are damages set when infringement profits clearly exceed the statutory ceiling?

    The defendant refused to produce sales data for the other three models at first instance. Could profits of the proven model be used to infer that profits of the other models were no less than that figure, supporting an award above the statutory cap?

03 · Kangrui Strategy

Approach

In the administrative proceedings, we obtained the patent prosecution history and argued that the two "characterized in that" clauses in the first claim respectively define the overall method steps and the configuration of the "user-defined sleep curve" — two progressive layers of limitation, with clear scope. We responded point-by-point to all novelty and inventive-step attacks.

In the civil proceedings, on the doctrine of equivalents we argued that "substituting non-volatile memory with control-chip RAM" required no inventive thought to a person of ordinary skill in the field, with substantially the same effect in normal use. The appellate court ultimately adopted this argument.

For the three un-sampled models, we combined the express statement in the defendant's installation manual that "this manual applies to all four models" with the industry convention that the series differs only in power, not function, to support a presumption that the other three models also implement "Sleep Mode 3" and infringe.

For damages, drawing on the verified-model profit figures and the defendant's refusal to produce sales data for the other models, and invoking the SPC's Provisions on Evidence in Civil Litigation, we sought damages above the statutory ceiling at the court's discretion.

04 · Outcome

Results & Impact

Administrative proceedings: The Beijing No. 1 Intermediate Court affirmed the Patent Reexamination Board's decision upholding patent validity.

Civil first instance: The Zhuhai Intermediate Court found all four models within the patent's scope and, based on the defendant's refusal to produce evidence, presumed that the other three models' profits were no less than the verified figure — awarding RMB 2 million above the statutory ceiling at the court's discretion.

Civil appeal: The Guangdong High People's Court affirmed the equivalent-infringement finding and the damages amount, dismissing the appeal.

Recognition: The case was selected by the Supreme People's Court as one of the Top Ten IP Cases of the year.

05 · Significance

Practical Insights

The case offers in-depth analysis of equivalent-feature determination, the calculation of infringement damages, and the relationship between damages and the statutory ceiling — with strong reference value for similar matters.

For judicial practice, the case established the path: "where proven infringement profit clearly exceeds the statutory damages ceiling and the defendant refuses to provide full evidence, damages may be awarded above the cap at the court's discretion" — providing rights holders an institutional lever for more reasonable damages on the basis of available evidence.