INSIGHTS In April 2020, Contemporary Amperex Technology Co. Limited (CATL) initiated legal proceedings against Tafel, hinging on a utility model patent denoted as CN201521112402.7. This utility model patent was declared valid, and the patent owner CATL, in the ensuing patent infringement case, was granted compensation exceeding 22 million RMB for economic losses incurred. Notably, the technical framework of this utility model patent is straightforward. Thus, power battery-related companies can glean instructive lessons from this patent infringement litigation and the associated invalidation processes to shape their patent strategies.
Patent Infringement Litigation
Three pivotal factors underpin the success of CATL and received compensation exceeding 22 million RMB.
1. Meticulous Drafting of Patent Claims:
The primary reason is that the claims in the patent are written very clearly. The defendant's power battery is essentially the same as in claim 1 of the utility model. In patent infringement cases, claim 1 is often crucial, and the comparison between the allegedly infringing product and claim 1 is typically the key focus of the entire case. In this instance, because the technical details in claim 1 are so well-defined concerning the battery's components, how they connect, and where they're positioned, it's easy to figure out the structure and related components when we compare both battery models.
This clarity allowed even judges without technical backgrounds to easily see and measure the specific structural features of the battery covers and related components in the accused 100Ah and 120/135Ah models. After examining everything, the court concluded that both accused products literally matched all the technical features described in claim 1. Each technical feature outlined in claim 1 perfectly corresponded to the components in these products, meaning they exactly infringed on claim 1 and fell under its protection.
2. Encompassing Patent Protection:
The second key factor is that the defendant's power battery falls within the protective scope of utility model claims 1-8. This strongly suggests that the defendant has adopted the plaintiff's technical solution.
Claims 2-8 of the patent are articulated as follows:
Additionally, the court carefully examined the accused products and found that their battery covers matched the technical details described in claims 2 to 8 of the patent. This means the defendant's product infringed all the eight claims in CATL's patent.
3. A Structured Approach to Calculating Compensation:
The third crucial factor pertains to CATL's systematic approach in determining the compensation amount for the incurred losses. The calculation formula for this compensation can be summarized as follows: it involves multiplying the total stored energy of the infringing product (which amounted to 736,515.6388 kilowatt-hours) by the unit price per kilowatt-hour (set at 1300 RMB), followed by multiplication with a reasonable profit margin (specifically, the average operating profit margin of CATL, which stands at 24%), and ultimately, multiplication by the patent contribution rate (fixed at 10%). Under the guidance of this structured framework, the court concluded that CATL had indeed suffered losses amounting to 22,979,287 RMB due to Tafel's infringement.
Key Insights
First, when products that are alleged to infringe literally match the primary claim of the patent, it strongly supports the judges' belief and willingness to grant significant compensation. Exact infringement means that each technical feature mentioned in the primary claim is precisely replicated in the accused products. This eliminates the need to prove equivalence in terms of "means, function, effect," as per the “Doctrine of Equivalents”. In cases where the language of the primary claim is crystal clear, as it is here, with each technical aspect visible in the accused products, the defendant's ability to argue that the alleged infringement falls outside the scope of the primary claim is significantly reduced. Therefore, judges are more likely to confirm the literal infringement of the accused products, leading to substantial compensation awards.
Second, when products alleged to infringe also fall within the protection of claims 2 to 8, the judges tend to assume that these products are a direct copy of the patent, justifying significant compensation. Since these claims are usually secondary and often include non-essential technical elements, arguing that these additional technical features in the accused infringing products are purely coincidental becomes increasingly tricky. Judges are thus more inclined to confirm the deliberate infringement of the accused products, strengthening the likelihood of substantial compensation.
Third, the structured method for calculating infringement damages presented by CATL provided the judiciary with a reliable basis for determining compensation, thereby establishing a solid foundation for awarding significant economic restitution. In this case, CATL based the calculation on the total stored energy of the alleged infringing products and the unit price, combined with the average profit margin and the patent's contribution rate. This methodology received judicial approval and support.
These key takeaways emphasize the importance of meticulous patent drafting, comprehensive protection of dependent claims, and a structured method for determining compensation in intellectual property litigation, ultimately serving as a guide for companies seeking similar successes in patent infringement cases.
Author: Zidong Wang
