Zhejiang Higher People's Court issued a second instance judgment, ruling that Philips' manufacture and sale of safety outlets did not constitute patent infringement.
On 31 October 2001, a patent was granted in respect of a safety outlet invented by Ao Qianping, Vice-General Manager of Ningbo City Saleisi Electric Co., LTD (Saleisi). In August 2005, Ao Qianping licensed Shenzhen D&S Industries Limited（D&S）to use the invention. Since 2009, Philips (China) has appointed D&S its agent to manufacture and sell various Philips products. Last July, Ao Qianping found that three types of PHILIPS branded safety outlets infringed his patent. At the end of this year, he filed a lawsuit at Ningbo Intermediate People's Court, claiming damages of 800,000 Yuan damages (approx. US$127.000)
Ningbo Intermediate People's Court held that the trade mark, enterprise' name and bar code indicated on the disputed products showed that Philips was the manufacturer, D&S having manufactured the products after receiving Philips' authorization. Philips did not, however, obtain Ao Qianping's permission and manufactured the infringing products through D&S, thereby infringing upon Ao Qianping's patent right. D&S's acts of instructing its subsidiary to produce the disputed products under the PHILIPS brand also constituted infringement. The court ruled that the Defendants, Philips and D&S, should jointly pay the plaintiff 800,000 Yuan (approx. US$127,000) in damages.
However, on appeal, the Zhejiang province Higher People's Court, overruled that decision and held that Philips had not infringed by entrusting Huizhou D&S to process the patented products and later selling them directly to Shenzhen D&S for further sales.
Reportedly, Ao Qianping may apply to the SPC for a retrial.
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