On Dec. 19, 2014, Jiangsu High People's Court upheld the
first instance ruling by Nanjing Intermediate People's Court
that dismissed an administrative lawsuit brought by Lotes Suzhou
Co., Ltd. (Lotes Suzhou). Lotes Suzhou had appealed the decision of
the Intellectual Property Office of Jiangsu Province (Jiangsu IPO)
that found that the company's USB 3.0 connector products
infringed the patent CN200810128623.1 (CN'623) held by Foxconn
Kunshan Computer Connector Co., Ltd. (Foxconn Kunshan).
In July 2012, Foxconn Kunshan filed a complaint before Jiangsu
IPO asserting that Lotes Suzhou's USB 3.0 connecters infringed
the CN'623 patent. Jiangsu IPO issued a decision in July 2013
finding that Lotes Suzhou's acts constituted infringement of
Foxconn Kunshan's patent rights and ordered Lotes Suzhou to
stop manufacturing the infringing products, destroy infringing
products in inventory, and destroy molds specially used for the
manufacture of the infringing products.
In the first instance of the administrative lawsuit, Lotes
Suzhou argued that its parent company, Lotes Co., Ltd. (Lotes) and
a third party, Hon Hai Precision Industry Company Ltd (Hon Hai),
which enjoys joint ownership of the CN'623 patent with Foxconn
Kunshan, are both contributors to the USB 3.0 Standards established
by international USB organization. And according to relevant
specifications, contributor agreements, as well as Hon Hai's
declarations, the CN'623 patent had been contributed and Hon
Hai had granted a license to Lotes and its affiliated entities to
use it, including its dependent claim 4. Jiangsu IPO argued that
Lotes Suzhou's products fall within the scope of both claim 1
and claim 4 of the CN'623 patent, while the USB 3.0 Contributor
Agreement did not cover the features defined in claim 4 of the
The first instance court held that neither claim 1 nor claim 4
of the CN'623 patent is an essential patent claim as defined in
the Contributor Agreement, as the Contributor Agreement provided
that the contributed scope shall not include any technology that is
related to the specification but itself is not a part of the
specification. In addition, the court found that the Contributor
Agreement does not automatically grant a license, and that an
authorization shall be obtained separately from a right owner.
However, Lotes Suzhou failed to prove that it had obtained such an
The first instance court rejected Lotes Suzhou's other
allegations that 1) Foxconn Kunshan had no right to initiate the
administrative proceedings due to a settlement agreement between
Lotes and Hon Hai; 2) Jiangsu IPO failed to add Hon Hai to the
administrative proceedings; and 3) the administrative proceeding
should have been suspended due to a pending civil litigation in the
U.S. The court based this decision on the grounds that 1) the
settlement agreement was to solve disputes between Lotes and Hon
Hai before 2006 and shall not be applied to the current case; 2)
Hon Hai, as the joint owner of the CN'623 patent, had made a
declaration to give up its right to file legal actions and such
declaration shall be valid; and 3) Lotes Suzhou failed to prove the
connection between the pending U.S. litigation and the current
The Jiangsu High Court upheld the first instance court's
decision in all respects.
The Jiangsu High People's Court's Decision for the case
filed by Lotes Suzhou is available
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