Supreme Court of China Concludes Trade Secret Infringement Case in New Energy Vehicle Industry
TapTechNews June 14th news, according to the news of the Intellectual Property Tribunal of the Supreme People's Court official account, recently, the Intellectual Property Tribunal of the Supreme People's Court concluded an appeal case of trade secret infringement dispute over new energy vehicle chassis technology caused by a large number of employees' 'job-hopping' between two well-known domestic auto enterprises.
TapTechNews learned that the plaintiff in this case claimed as much as $3.1 billion. The Supreme People's Court applied a 2-fold punitive damages in the second instance and judged the infringer to compensate for the economic loss and the reasonable expenses for rights protection totaling approximately $930 million, setting a new high in the amount of judgment for compensation in intellectual property infringement litigation in China. Although the court did not disclose the specific names of the enterprises involved in the case, based on reasonable speculation, the so-called 'two well-known domestic auto enterprises' in this case are Geely Holding Group and WM Motor.
According to the announcement, nearly 40 senior management and technical personnel of Chengdu Gao XX Automobile Industry Co., Ltd. (hereinafter referred to as Chengdu Gao XX Company), a subsidiary of Zhejiang Geely Holding Group Co., Ltd. (hereinafter referred to as Geely Group), successively left their jobs and went to work in WM Auto Technology Group Co., Ltd. (hereinafter referred to as WM Group) and its affiliated companies, and 30 of them joined immediately after leaving their jobs in 2016.
In 2018, Geely Group found that WM Group, WM Smart Mobility Technology (Shanghai) Co., Ltd. (hereinafter referred to as WM Smart Mobility Company), using the technical information about the application technology of new energy vehicle chassis and the 12 sets of chassis parts drawings and the technical information carried by the digital models that they came into contact with and mastered in the original unit (hereinafter referred to as the involved trade secrets) applied for 12 utility model patents, and without any technical accumulation or legal technical source of the WM Group, WM Automobile Manufacturing Wenzhou Co., Ltd. (hereinafter referred to as WM Wenzhou Company), WM Smart Mobility Company, WM New Energy Vehicle Sales (Shanghai) Co., Ltd. (the foregoing four companies are collectively referred to as WM Party), they launched the WM EX series of electric vehicles in a short period of time, suspected of infringing the involved trade secrets of Geely Group and Zhejiang Geely Automobile Research Institute Co., Ltd. (the foregoing two companies are collectively referred to as Geely Party).
In 2018, Geely Party filed a lawsuit with the first-instance court, requesting that the WM Party stop the infringement and compensate its economic loss and the reasonable expenses for rights protection totaling $3.1 billion. The first-instance court, after hearing, held that WM Wenzhou Company had infringed the technical secrets of 5 sets of chassis parts drawings of Geely Party and discretionarily determined that WM Wenzhou Company should compensate Geely Party for the economic loss of $7.3 million and the reasonable expenses for rights protection of $2.9 million.
Both Geely Group, Geely Research Institute and WM Wenzhou Company were not satisfied with the first-instance judgment and appealed to the Supreme People's Court.
The Supreme People's Court, after hearing, held that this case was a case of infringing trade secrets caused by a large-scale, organize d and planned poaching of new energy vehicle technical talents and technical resources. After calculation, the WM Party should compensate the Geely Party for the economic loss and the reasonable expenses for rights protection totaling approximately $930 million.
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