Record Compensation Judgment of 50 Million RMB Made by Beijing Intellectual Property Court (Dec-2016)

On December 8, 2016, the Beijing Intellectual Property Court rendered a ruling in favor of the plaintiff, Beijing Watchdata System Co., Ltd. (hereinafter referred to as Beijing Watchdata), at the first instance of the proceedings for infringement of the patent right of the "USB key."  It was ruled that the defendant, Hengbao Co., Ltd. (hereinafter referred to as Hengbao), has to pay Beijing Watchdata compensation of 49 million RMB and 1 million RMB for attorney's fees.  The amount of compensation is the highest since the establishment of the Beijing Intellectual Property Court, in which the principle governing the proceedings to compensate for attorney's fees was acknowledged for the first time.

The USB key is one of security keys used as security measures for payment in internet banking, etc. and is called USB key due to its appearance resembling USB flash disk.

Beijing Watchdata sued Hengbao on February 26, 2015 on the ground that the USB key manufactured by Hengbao for internet banking of a dozen Chinese banks and the authentication method by the USB key pertain to the scope of protection of patent right concerning the USB owned by Watchdata, demanding the cessation of the infringing acts by Hengbao and compensation of 49 million RMB for economic loss and 1 million RMB for attorney's fees.

Even though Hengbao did not admit the alleged infringement of right, the Beijing Intellectual Property Court ruled that Hengbao infringes the plaintiff's patent right and supported the contents demanded by the plaintiff in the lawsuit.

After the conclusion of the trial, Watchdata expressed their satisfaction with the judgment, whereas a person in charge of intellectual property of Hengbao declared to appeal soon against the first instance.

(Beijing Daily, revised version)