INSIGHTS Purplevine's IP licensing/dispute resolution team, together with external counsel, advised a leading photovoltaic components company in reaching a favorable global settlement agreement with its competitor. The settlement resolved the client’s global intellectual property disputes. Purplevine acted as the lead advisor and provided case management services, case analysis, and litigation strategies.
Case Background
The client’s competitor was poised to receive a large influx of financing which would have allowed it to greatly expand its production of products that infringed our client’s patent rights. If the financing deal and production expansion had gone forward, it would have caused our client incalculable business risk and losses.
Challenges
1.Coordination between both Chinese and US judicial proceedings.
2.Difficulty in obtaining evidence—In China, to establish the authenticity of the infringing product, the product must be purchased in the presence of a notary. However, the products concerned were business-to-business products that could not be purchased in this way. Travel restrictions and a need to expedite the litigation (for business reasons) added to the difficulty.
3.Complicated and time-consuming US service of process and Hague service of process requirements.
4.Cross-licensing issues involved—The competitor relied on a contract governed by US law to claim its rights to the IP in question. This raised novel extraterritorial legal issues under Chinese law.
Tough negotiations due to the technical nature of prior licensing agreements and surrounding business considerations.
How did Purplevine help
The Purplevine team formulated a litigation strategy to meet the client's core interests. It worked closely with external counsel, initiated patent infringement lawsuits, and administrative procedures for patent invalidation requests both in China and overseas.
With the team's in-depth knowledge of the photovoltaic industry and familiarity with financing procedures, it adopted the strategies that best suited the client’s interests.
Purplevine is one of the few firms in China that has background and experience in both Chinese and US IP law. The team quickly deployed Chinese and US-qualified lawyers to assist the client in identifying the competitor’s patents that were vulnerable to attack and meeting the prosecution requirements in both China and the US. This research and background work provided leverage for the licensing negotiations.
Unlike in China (where the service of process in civil cases is done by the court according to the defendant’s contact information provided by the plaintiff), the obligation to serve process in the United States lies with the plaintiff. In addition, in the case of foreign defendants, Hague service of process is required and such service can take up to six months. The Purplevine team discussed with external counsel various ways to expedite service. After researching the defendant's public documents, our team picked up on subtle details in the defendant's announcements that they used to successfully persuade the judge to allow alternative service, helping our client break through the Hague service dilemma.
The competitor argued that it might rely on a patent cross-license agreement it had entered into to claim that it had rights to the patent. The decision on whether the competitor had such licensed status would have been made by a US district court. The Chinese court would have then had to apply the principle of extraterritoriality to decide whether and how to apply the judgment in China. The team provided essential evidentiary support to its US counterparts. The team developed evidence and arguments to demonstrate that the competitor did not comply with the terms of the cross-license agreement and therefore had no rights to the patent under the agreement.
After about a year of contentious back-and-forths, Purplevine’s client was gaining considerable ground in the global litigation. After the competitor suffered a setback in obtaining hoped-for financing, Purplevine prompted the competitor to enter settlement negotiations with its client. Those negotiations bore fruit in August 2022 in the form of a global settlement between the parties.
Result
After exerting significant legal pressure on our client’s competitor by means of our persistent litigation strategy, the parties entered into a settlement agreement that preserved our client’s right to the IP in question. The settlement helped establish our client’s reputation in the market and sent other competitors a strong message that they should think twice before infringing our client’s IP.
As Frank Jeng, Vice President and Head of Licensing/Litigation of Purplevine commented,
"The value of IP to a company should not be quantified by the number of patents filed each year or the amount a company spends on R&D, but rather how the IP can be deployed to gain competitive leverage for the company in the business battlefield. Purplevine fights hard for its clients, combining its experience in IP, US-China litigation, capital markets, public relations, and its industrial network. Our unique capabilities help clients optimize the value of their business and seize market opportunities."
