American petroflex on 337 investigation of Shandong Sinorgchem Chemical Co. Ltd (two)

 337 case of Chinese Shandong Sinorgchem chemical Limited by Share Ltd USA FlexSys
                         Author:Li Hongjiang

 

 

A series of lawsuits, the single
  
  In February 23, 2005, Flexsys America LP filed 337 applications to the ITC survey, that a total of 5 companies Chinese, American and South Korean exports to the United States and in the United States sales of rubber anti degradation agent and its products infringed three patents the company (America patent 5117063, 6140538, 5608111) before 2005, January, Flexsys has been in the USA Ohio Northern District Court filed a patent infringement lawsuit against the and other related enterprises.
  As everyone knows that, America federal district court litigation is difficult, time is usually two to three years, full of variables. If the final decision is not conducive to the company ITC, it will definitely appeal, while the Northern District of Ohio, the court of appeal is American Federal Circuit Court of appeals, therefore in the superior court for trial of the case, the local court may not accept the trial. The appeals procedure on appeal will last 1.5 to 2 years. Even after the appeal of Flexsys company in the local court started to tire factory procedure, then in accordance with the USA law, changes of trace amounts of chemical properties will be difficult to identify the tire of infringement, there is also evidence is difficult, the problem of long time. Therefore, according to the provisions of clause 337 of Flexsys America LP at the same time, bring a lawsuit to the court and the International Trade Commission would be "weaknesses", jointly play to improve the China rubber industry launched a fierce attack success rate.
  In the field of international trade in general, in the high-tech industry, the international intellectual property disputes is very common, many of the causes is the market share change. Causes of the two USA litigation and investigation, mainly with the company rising rapidly in recent years, in the product technology, quality, price, service and other aspects have the advantage in the international competition, causes the rubber industry at home and abroad about the rise to fame. The company at the beginning of the establishment of the domestic market share of about 10%, and has now reached more than 40%, and America Flexsys company in recent years has faced in China market share decreased year by year of crisis. A few years ago, American Flexsys company in the domestic market share reached 30% when the maximum, however by 2005 almost quit the China rubber antioxidant market.
  The rubber anti ageing agent case involving patents, mainly for the development of the RT base continuous catalytic hydrogen chemical new technology. With this technology, the company in 2004 won the two prize of national scientific and technological progress award. According to the reports, from 2002 to 2005, Shandong Sunon capacity from 5000 tons to 50000 tons, the product quality is also synchronous lifting. In 2003, the company's rubber antioxidant obtained the quality certification, French Michelin America Goodyear, Japan Bridgestone, the world's three largest tire manufacturer, it began selling market mainstream American and Europe two. Concomitantly, Shandong Sunon's annual sales revenue in 2004 was RMB 420000000 yuan, the domestic market share reached 50%, in the top three positions in international market.
  So far, rubber antioxidant "337 investigation" case involves two simultaneous action: one is in 2005 January, the plaintiff American FlexSys in America Ohio Northern filed a patent infringement lawsuit against China Shandong Sinorgchem chemical Limited by Share Ltd and other related enterprises; two is the FlexSys as appeal direction America International Trade Commission (ITC) application on the basis of USA tariff law article 337th investigation, allegations of enterprise China the company violated the 538 3 patent with the patent application, intermediate system into Anti old agent 6PPD and its downstream products to enter the market USA tire a permanent injunction.
  As you can imagine, this is a common method of Usa Inc filed a patent infringement lawsuit against foreign companies, namely, the patent infringement litigation in court and filed survey, 337. It has two goals: one is "double thread combat" may make the company to obtain the maximum benefit -- to obtain compensation in the Federal District Court, and by the ITC general exclusion order and a ban on imports, quickly stop infringing products, the exclusion of competitors crowding the trade Yao America field share their; two through multiple lawsuits arising from the huge cost pressure, caused to the other party in the economic. In short, each other no matter what kind of form, is in the opponent will be the future market competition out of the market.
  In the America patent litigation before the start, in 2004 June, Flexsys announced further expand to the two benzene amine antioxidant intermediate 4- amino two aniline production capacity of 30%, to meet the market demand for growth and new product QDI to expand production capacity requirements. At the same time, Flexsys company announced in South Korea formally charged Kumho petroleum chemical company (KKPC), the reason is the production process of antioxidant intermediate 4- amino aniline the company purchased from Shandong Caoxian Sinorgchem chemical Limited by Share Ltd two violations of the Flexsys company in Korea patent. This is a strategy to prevent KKPC kill two birds with one stone: the international famous antioxidant producer price killer infringement behavior, and deter other low price competitors (especially Crompton) continues to play the price war of confidence. As the alleged infringement of the other party, Shandong Sunon even without prosecution, but also made a positive response, in South Korea has proposed Flexsys patent invalid litigation request. Results one can imagine, to 2004 October - closed, the Korean court ruled against Flexsys company, is considered the Korean patent can not be implemented, the use of the products of South Korea Kumho not tort. Flexsys's appeal, the second instance court of Korea in the second half of 2005 ruling against.
  Obtained fraudulently patent ("injustice") improper use and patents are important reasons that patent unenforceable. In the process of the patent right is granted, the patent applicant has the obligation to the knowledge of all the "important information" disclosure to patent examination, including patent examiner that any information associated with patent. If the applicant fails to perform the duty of disclosure, constitutes a "injustice", thus becoming a reason not to be the implementation of the patent. Improper use of patent is that it does not have to be another reason. Improper use and the patent may violate antitrust law. A patent is a permitted monopoly, the patentee must make their patent rights in professional time and range, but if the right people attempt to implement patent beyond the rights granted, the patent is not enforceable.
  Enter the release stage in American evidence for rubber antiagers "337 investigation" case at the same time, the company also respectively in Shandong and South Korea in the Chinese FlexSys patent invalid complaints, so far, the international patent dispute case has entered the three case serial litigation status. While the European Patent petroflex have also been mentioned Bayer of Germany's patent invalid litigation. Chinese State Intellectual Property Bureau issued search opinion is FlexSys related patents do not meet the China Patent Act twenty-second provisions of the third paragraph of creative.
  It is based on the "USA FlexSys rubber antioxidant 337 investigation" and made the appeal case. The patent appeal after the start, China State Intellectual Property Office patent retrieval consultation center through detailed retrieval, the retrieval report issued by the. The retrieval report on the opinion is: FlexSys related patents do not meet the Chinese Patent Act twenty-second provisions of the third paragraph of creative[6]. This is the second American Ohio Northern District Court announced a permanent suspension of infringement American petroflex company of Shandong Sinorgchem chemical Limited by Share Ltd, has made phased achievements.
  In the Kindu law firms and America Arno. Joint efforts of Potter law firm, and actively cooperate in the company, the rubber antioxidant 337 survey evidence release work is everything in good order and well arranged expansion, has made a series of achievements.
  Because of the company in South Korea for the patent invalid petroflex appeal also has been accepted. Patent dispute that saint and FlexSys has been transferred to serial state in three case and complex. Either case in three case and will have an important impact on the other two.
  In June 29, 2005, the China rubber industry news again from China CCCMC comes out, because China enterprises to actively respond[7]Chinese, relates to the tire industry in the progress of the new American patent disputes existing. Shandong Sinorgchem chemical Limited by Share Ltd are not petroflex momentum scare, but to respond. As can be seen, the company's courage, not just stand in their position to fight to protect their own rights and interests, is more important to win the honor for the China domestic rubber industry, the maintenance of the entire Chinese rubber industry interests, also won the honor for the China domestic enterprises, from the "soft" good pinch of the title will be gone for ever.
  Do not experience wind and rain, how can see the rainbow, no one can casually succeed! In 2005 April, America District Court in northern Ohio approved Shandong Sinorgchem chemical Limited by Share Ltd sued defense and proposal, announced a permanent suspension consideration. What's more, the company has already or ready in South Korea, India and other countries, Chinese in FlexSys related patent invalid complaints. Domestic enterprises such as triangle, Chengshan, key tire Zhongce, Fengshen also began with the well in the future work of investigation and evidence collection procedure.
  
  "Punched Nanshan tiger, Beihai dragon kick"
  
  Thus, create a great sensation and caused widespread concern China tire industry USA rubber antioxidant "337 investigation" case was finally appeared in the company's efforts against the next turn. In September 27, 2005, active defense in the company and South Korea under the Kumho, complete the evidence in the case, on the eve of the upcoming session, USA FlexSys suddenly offered to cancel the 6140538 patent and the China Shengao company under the patent claims, and take the initiative to propose a motion to terminate with the patent infringement on all survey.
  Where is the reason? It is understood, causes the complainant USA FlexSys voluntarily withdraw is mainly found in Shandong St. Austrian company to grasp about the 538 patent technology does not have the evidence that implementation of. The 538 patent is one of the three patents, Flexsys filed 337 investigation in 2005 September, the lawyer was flawed evidence 538 patent, then the patent does not have a summary judgment motion can be implemented. The complainant that continue to maintain these charges will be to their disadvantage, so the request to withdraw the charges. After the company and South Korea Kumho active defense, in October 28th the same year the plaintiff has confirmed not to seek for the downstream products (including rubber tire, rubber belt, rubber tube, pipe and other products) prohibition and elimination of relief. This means that the global use of St. Austrian company rubber antioxidant as raw material and the production of tires and other rubber products manufacturer, the product can continue to USA market sales, and not subject to the 337 investigation ultimately whether tort or whether to issue an injunction and exclusion constraints.
  This shows that Shandong Sinorgchem chemical Limited by Share Ltd have their own intellectual property rights, has the market share; FlexSys retreat that infinite power with independent intellectual property rights of the new product market development. The lawsuit also corresponding advice of the industry, the so-called patent infringement, the so-called anti-dumping, the international market there will always be those who trouble you, if you want to enter the international market, seek the development of space, they have to face, dare to fight to defend their lawsuit, also is to establish himself in the field, the industry authority, otherwise it will cause "bullied", "Ma Shan was riding" situation. At the same time, the international market situation also requires China rubber industry together, establish section 337 investigation emergency early warning mechanism as soon as possible, to prevent the possibility of the next attack.
  However, a small turning is not equal to the Everything will be fine. Flexsys company Beijing office Chen Yongyue said, at present Flexsys still retain the other two patent lawsuits, of which 063 belong to the basic patent, in America award. He said, although the Flexsys in the district court for the Northern District of Ohio lawsuits are unlimited delay, but the main reason is ITC proceedings pending. Once the ITC determine the infringement, Flexsys will immediately in the local court to trial. In the local court litigation, Flexsys requires the tort damages and an injunction, banned the import of 6PPD (in Shandong Sunon RT base as raw material) and other products containing 6PPD, including tires. "Flexsys will to defend their own patents, including the use of legal means to appropriate." Chen Yongyue said, "so may involve the other tire companies claim."
  According to the schedule, November 7, 2005 to 10 and 14 to 15 days, American ITC administrative law judge hearing the case to the trial. Although the company has experience in many aspects has made some positive results, but in some positive bias in the company, America ITC administrative judge in February 17, 2006 made is not conducive to the company's preliminary.
  In February 17, 2006, America International Trade Commission administrative law judge (Administrational Law Judge) in a rubber antioxidant 337th investigation, preliminary judgment: Shandong Sinorgchem chemical Limited by Share Ltd (hereinafter referred to as the company) with patent infringement and USA Sovereign company, and the other accused South Korea Kumho chemical company (hereinafter referred to as South Korea Kumho) no infringement. In the preliminary suggestion on the administrative law judge, ITC company and Sovereign company American issued a limited exclusion order (limited exclusion order). The administrative judge suggested limited exclusion order, even if be ITC members to accept, is only in view of the above mentioned were exported to American 4- ADPA and 6PPD, and downstream not for export to USA. That is to say, to the downstream products, containing the company involved in the products such as tires, are not affected by the exclusion restrictions.
  Publish the preliminary ruling, the parties caused different reactions. Subsequently, the parties to the different parts of the preliminary ruling administrative judge America International Trade Commission in 2006 4 month 13 to the ITC for review, of course, America International Trade Commission also immediately made a review the preliminary ruling all the content of the decision.
  According to the relevant provisions of "USA tariff law" 337 clause, if USA International Trade Commission final judge did not violate the terms of the 337 , to accept the ruling party may immediately appealed to the America Federal Circuit Court of appeals. If the ITC final decision in violation of the 337 terms and to issue an exclusion, case submitted within the USA president in 60 days to review, America presidential policy according to whether the damage to the public interest and related grounds, overthrow any ITC give relief. In the remedy measures issued by the circumstances, if the president can veto, ITC decision and the relief measures to take effect. Presidential review period after any party dissatisfied with the ruling may be appealed to the America Federal Circuit Court of appeals. In the above-mentioned cases, many cases the court of appeal was dismissed, for example in Chinese battery enterprises in 337 case, a federal court rejected the appeal USA tour ITC all members of the final, so far, the results are unclear, therefore can only wait for the time to test, if the companies to actively take the initiative to end the war of words, the results are likely to change is not.
  To 2006 May 11 day, USA International Trade Commission issued a notice, notice that ITC will continue the review since 2006 29 May to July 12th. The results may be sent to administrative law judge make the re award, maintain the preliminary ruling or change some or all of the initial decision. If USA International Trade Commission finds "unfair import" was established, may decide to issue "the ban on imports" and / or "stop order". Results are now unable to determine, America International Trade Commission to preliminary decision of administrative law judge is not to change the precedent, therefore, now that the results may be too early......
  
  Domestic media focus
   [China grinding
  In February 28, 2006, antioxidant Flexsys company executive vice president Mr. TimWessel ITC on behalf of the company announced, the administrative law judge recently made the final trial, sentenced to the company and America chemical company Sovereign in violation of the relevant provisions of Section 337 of the tariff act of 1930 in USA.
  South Korea Flexsys company will Kumho situation and request for review.
  Involved in the investigation of 337 of Flexsys patents cover the production of 4 amino two aniline and benzene two amine antioxidant revolutionary new technology. In addition to the American patent, Flexsys, also in many countries of the world have related patents. This invention won the award of green chemistry president challenge USA Environmental Protection Association as early as 1998, in recognition of his contribution to environmental protection.
  Mr. TimWessel noted that: the technology has important significance for Flexsys company. Flexsys found, developed and commercialized the award-winning technology invention patent protection, and the relevant process, behind all this is a huge cost of years of hard work and technical personnel. We have been successful in Europe and USA defended the basic patent to us, and will continue to defend it in the world. Flexsys filed 337 the purpose of the investigation is to protect our intellectual property, is not targeted at any country, enterprises or individuals. This action is what we in the global range maintenance one step of own intellectual property.
   [Shandong St. Austrian company net]
  Shandong Sheng'ao chemical Limited by Share Ltd deputy general manager Du Zibin: Although ITC administrative judge of cutting is not conducive to the company, but ITC preliminary and final does not represent the final, final result still cases have variable. Resilience is only one aspect of the case in the process of development, there are many links to continue. First of all, the final administrative judge preliminary not ITC. ITC will decide whether to review. If you do not review, administrative law judges ruling is the final ITC. If the review, by all six members of the ITC preliminary modification (modify), (RE / ject) or refused by (adopt) after the promulgation of the final ITC. ITC review the overthrow of the administrative judge decides cases are not uncommon, relates to Chinese battery enterprises such as in the case of 337 investigation before. Therefore, the situation will be the final is preliminary and ITC ITC administrative judge of all members of the inconsistent results. Second, if the ITC final decision not in violation of Section 337, to accept the ruling party, immediately appealed to the America Federal Circuit Court of appeals. If the ITC final decision to violate Section 337 and give relief measures, then case American president for a 60 day review, USA president from according to whether or not to harm the public interest, the overthrow of any ITC issued the relief measures. In the case of relief measures issued only after 60 days to review, the president, the ITC ruling and relief measures in order to become the final award. Presidential review period, any party dissatisfied with the ruling, may appeal to the America Federal Circuit Court of appeals.
   [Chinese chemical daily]
  Rubber additives professional committee Chinese rubber industry association chairman Xu Chunhua: Although ITC preliminary results on the companies, but this is just a program development process in the case, the future is full of variables. From look at present, preliminary results do not affect the company's products in the domestic sales, and the company has exported directly to the USA products is not much also; in addition, the ITC preliminary not for export to the downstream products America, so to see results from the overall impact on the rubber industry response will not be great. If the final outcome of the benefit of the company, then the company will develop faster, continue to drive the product structure adjustment process industry, to meet the domestic tire industry especially the development of radial tire industry requirements.
  We look forward to the law will have a fair decision. But whatever the result, believe that the company will adhere to independent innovation, continue to make due contributions to the development of rubber auxiliary industry nation.
  Of course, the intellectual property rights disputes but also to the domestic enterprises sounded the alarm. Facing the perplexing international trade environment, the domestic enterprises in the development and at the same time, must have awareness of the law; pay attention to the issue of intellectual property rights, in respect of intellectual property rights of others at the same time, also must be resolutely defend their intellectual property rights; to adhere to independent innovation, and try to avoid this kind of dispute, to create a good environment for the enterprise development, to achieve sustained and stable development.
   [Oriental Morning Post]
  Intellectual Property Institute of Shanghai Univer President Tao Xinliang told reporters, "337 investigation" is following the anti-dumping, safeguard the US ban "for a sword China manufacturing". But this sword power stronger, because once that imported products do constitute infringement, ITC can permanently the product to America outside. In addition, the American enterprises, put forward "337 investigation" lower the threshold; while the Chinese enterprises in the "337 investigation" when responding to anti-dumping is significantly larger than the cost of litigation is particularly high.
  Professor Tao pointed out that, along with the "China manufacturing" on the world stage scenery infinite, disputes with developed countries Chinese intellectual property also entered a period of high. In the intellectual property rights exchange, do exist illegal act China enterprises, but also there is no lack of "make groundless accusations" phenomenon.
  Pens enterprises Ningbo BEIFA last month won the first case of intellectual property rights, China beauty pen industry survey. BEIFA's legal adviser Zhou Jie told reporters, in the past a few "337 investigation", few China enterprises involved, because they often are deterred by the cost of litigation, "but not to the words, China pens industry will be forced to withdraw America market".
  Zhou Jie introduction, BEIFA to spend in responding to the litigation costs $1200000. "Domestic another successful case of intellectual property rights is Fujian Nanfu 18 companies to beat back the America 'energizer' cell, but Chinese enterprises pay $about 4000000 in legal fees."
  Industry experts told reporters that the United States, faced with "337 sword", the domestic enterprises should consider themselves to the United States exports, the product is enterprise's flagship product, to consider whether or not responding, or it may The loss outweighs the gain.
   [engineering rubber network China]]
  USA petroflex company is the world's largest fertilizer production enterprises, but in recent years, because of rapid development Chinese new additives, its products not come. Last year the new technology for the production of Shandong Sinorgchem chemical Limited by Share Ltd RT base was named the two national science and technology progress award, petroflex company sent a letter to the relevant state ministries and commissions, said that the company's products infringed its intellectual property, not the awards. China Rubber Industry Association issued by America proved facts, petroflex company did not apply for a patent in China, does not affect the Shandong Sinorgchem chemical Limited by Share Ltd won the two prize of national scientific and technological progress. Also last year, petroflex is RT base production process of intellectual property lawsuits in South Korea, is also said to be Shandong Sinorgchem chemical Limited by Share Ltd infringed its intellectual property, but finally ended in failure.
  In 2005 January, and in American FlexSys Ohio Northern filed a patent infringement lawsuit against China Shandong Sinorgchem chemical Limited by Share Ltd and other related enterprises, to USA International Trade Commission (ITC) application basis America tariff law article 337th investigation, allegations of enterprise China the company violated the 538 3 patent of its own, issued a permanent injunction to apply for the patent system into the middle of antioxidant 6PPD and downstream products into the American tire market. In the case of great concern China rubber industry due to millions of tires will involve China annually to the America export fate. Shandong Sinorgchem chemical Limited by Share Ltd are not petroflex momentum scare, but to respond.
  In September 27, 2005, FlexSys suddenly put forward to revoke its on China the company under the patent claims, and take the initiative to propose a motion to terminate with the patent infringement on all survey. It is understood, because the plaintiff voluntarily withdraw is mainly the company has about 538 patents do not have strong evidence that implementation of. The plaintiff that continue to maintain these charges will be to their disadvantage, so the request to withdraw the charges. Since October 28th, the plaintiff has confirmed not to seek to the downstream products (including rubber tire, rubber belt, rubber tube, pipe and other products) prohibition and elimination of relief.
  This shows that Shandong St. Austrian company has its own intellectual property, have market; FlexSys retreat, the development of new products with independent intellectual property rights market infinite power. The lawsuit also advice industry, the so-called tort, the so-called dumping, the international market there will always be those who trouble you, if you want to enter the international market, seek the development of space, they have to face, dare to fight to defend their lawsuit, at the same time, the international market situation also requires Chinese rubber industry unity again, as soon as possible to establish the anti-dumping early warning mechanism.