Chinese Patent Litigation – Practice Tips for US Companies (Part 2)

Case Study (2): Holley Communications v. Samsung Electronics

On December 19, 2008, the Hangzhou Intermediate People’s Court, also in Zhejiang Province, ordered Samsung to pay $7.4 million (UDS) to Zhejiang-based Holley Communications (“Holleycomm”) for infringing Holleycomm’s patent directed to GSM/CDMA dual-mode handsets. This is the largest damage award for patent infringement in China’s mobile phone industry.

This ends the 20-month dispute, for now, as Samsung has indicated that it would appeal the decision after it receives the formal order. The case started on April 9, 2007, when Holleycomm sued Samsung for patent infringement. On May 8, 2007, Samsung requested China's State Intellectual Property Office (SIPO) to reexamine the validity of the patent. Under Chinese laws, the trial proceedings stayed pending SIPO’s reexamination result. On December 14, 2007, SIPO declared that Holleycomm’s patent was valid. The trial proceedings resumed, paving the way for the December 19, 2008 decision.

Encouraged by this result, Holleycomm indicated that it will start suing other companies. “This means Samsung won’t be the last to be prosecuted for the infringement of the dual-mode patent of Holleycomm,” the company said.

This is still a developing story, as details of the case have not fully emerged. It appears, however, that Holleycomm has fueled the nationalist sentiment by offering free licenses to wholly Chinese-owned companies, but seeking licensing fees from foreign entities.

(To Be Continued. Stay Tuned for Trends and Predictions, and Practice Tips for US Companies.)