—Selected into the "Top 10 Cases Promoting Rule of Law Progress in the New Era for 2024"

Case Brief

Ji Companies filed a lawsuit with the first instance court on the grounds of infringement of technical secrets by Wei Companies, requesting to order Wei Companies to stop the infringement and compensate for its economic losses and reasonable expenses for stopping the infringing acts, totaling 2.1 billion yuan.

After trial, the first instance court held that Wenzhou Wei X Automobile Manufacturing Co., Ltd. infringed upon Ji Companies' technical secrets of the five sets of chassis component drawings involved in the case, and ordered Wenzhou Wei X Automobile Manufacturing Co., Ltd. to compensate Ji Companies for economic losses and reasonable expenses for rights protection of 7 million yuan. Ji Companies and Wenzhou Wei X Automobile Manufacturing Co., Ltd. were both dissatisfied with the judgment and appealed to the Supreme People's Court.

The Supreme People's Court held in the second instance that this case was an infringement of technical secrets caused by the organized and planned large-scale poaching of new energy vehicle technical personnel and technical resources by improper means. Through overall analysis and comprehensive judgment, it can be determined that Wei Companies committed the acts of obtaining all the technical secrets involved in the case by improper means, illegally disclosing part of the technical secrets involved in the case by applying for patents, and using all the technical secrets involved in the case. The judgment of the second instance court, on the basis of the overall judgment ordering that Wei Companies shall immediately stop disclosing, using, or allowing others to use the technical secrets involved in the case, further refined and clarified the specific methods, contents, and scope of stopping the infringement, including but not limited to: unless the consent of Ji Companies is obtained, Wei Companies shall stop disclosing, using or allowing others to use the technical secrets involved in the case in any way, and shall not implement, license others to implement, assign, pledge or otherwise dispose of the 12 patents involved in the case by itself; and all drawings, digital models and other technical materials containing the technical secrets involved in the case shall be destroyed or handed over to Ji Companies; by means of public announcements and internal notices, etc., the judgment and the requirement related to cessation of the infringement shall be notified to Wei Companies and all its employees as well as affiliated companies and suppliers of relevant components, and the relevant personnel and units shall be required to sign a letter of commitment to maintain the trade secret and not infringe on them. Considering that Wei Companies had obvious intention to infringe, the circumstances of the infringement were egregious, the consequences of the infringement were serious, etc., double punitive damages are applied to Wei Companies' infringement profits from May 2019 to the first quarter of 2022, and Wei Companies should compensate Ji Companies for economic losses and reasonable expenses of about 640 million yuan. To ensure the performance of non-pecuniary payment obligations, the judgment of the second instance court further clarified that if Wei Companies violates the non-pecuniary payment obligation of stopping infringement determined by the judgment, Wei Companies shall pay a delayed performance fee of 1 million yuan per day; and if Wei Companies disposes of the 12 patents involved in the case without authorization, Wei Companies shall pay a one-time payment of 1 million yuan for each of them.

Case Significance

The "new energy vehicle chassis" technical secret infringement case is the intellectual property infringement dispute with the highest damages awarded in China. The People's Court, based on its comprehensive judgment of the acts of infringement of technical secrets, not only applied the legal provisions on punitive damages to determine the amount of damages but also actively and effectively explored the specific methods for assuming civil liability about the cessation of infringement and the criteria for payment of penalties related to delayed performance of non-pecuniary obligations. The final judgment in this case garnered widespread attention from the media and various sectors of society.

(Source: Supreme People's Court of the People's Republic of China)