Karku's "337 investigation" finally won the case. How can overseas companies "harden" 337?-Industry News-Shenzhen deep trust patent Agency Co., LTD

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Karku's "337 investigation" finally won the case. How can overseas companies "harden" 337?

Release Time：

2022-09-07

"This article interprets the whole story of the Karku '337 investigation' incident." On August 29, 2022, the ITC judge issued a final ruling: upholding the conclusion of the preliminary ruling, that is, the US NOCO Company's 024 patent does not meet the requirements of the domestic technology industry and is stuck. Carku does not involve infringement of the 024 patent, that is, Carku products do not infringe. This means that Karku won the US "337 investigation" with a winning rate of only 5.2%, that is, the final ruling won. However, behind the seemingly simple "final victory", there are risks that many overseas companies are unaware of. This article explains the whole story of the Karku “337 Investigation” incident.

“This article explains the whole story of the Karku’s ‘337 Investigation’ incident.”

On August 29, 2022, the ITC judge issued a final ruling: upholding the conclusion of the preliminary ruling, that is, the US NOCO Company's 024 patent does not meet the requirements of the domestic technology industry, and Carku is not involved in the infringement of the 024 patent, that is, Carku's products do not infringe. This means that Karku won the US "337 investigation" with a winning rate of only 5.2%, that is, the final ruling won.

However, behind the seemingly simple "final victory", there are risks that many overseas companies are unaware of. This article explains the whole story of the Karku “337 Investigation” incident.

1. “337 Investigation”: a crisis that export companies often ignore

The U.S. 337 investigation is an application by U.S. companies to the U.S. International Trade Commission (ITC) to initiate investigations and take sanctions against overseas companies based on unfair practices in import trade based on the U.S. Tariff Act of 1930. Once a company exporting to the United States loses the lawsuit, it will at least pay high legal fees, or at worst, the products will be permanently withdrawn from the U.S. market.

In addition, most of the "337 investigations" are aimed at patent or trademark infringement, and only a few involve copyright, industrial design, integrated circuit layout design infringement and other unfair competition behaviors. It is different from intellectual property litigation in U.S. courts, and the investigation process is relatively fast. Generally, it takes 12-18 months, while the trial time for intellectual property litigation in U.S. courts is 3-4 years.

Therefore, many trade experts believe that the essence of the Section 337 investigation is a trade protection measure set up by the U.S. government to protect local companies. It is also the most economical and time-saving legal way for U.S. companies to prevent competitors from entering the U.S. market.

Shenzhen Hua Sixu Technology Co., Ltd. (hereinafter referred to as "Hua Sixu") was established in 2011 and is a professional global supplier of multi-functional vehicle emergency starting power supplies. It is understood that Hua Sixu's brand "CARKU" is the inventor of lithium-ion car emergency starting power supply. During its overseas expansion, its car emergency starting power supply products accounted for one-fifth of the world's sales by virtue of high quality and advanced technology. The share of left and right.

According to Hua Sixu, the American company NOCO visited Hua Sixu's headquarters in Shenzhen in the name of "cooperation" in early January 2014. During this period, the American company NOCO obtained samples and technology, and applied for U.S. 9,007,015 (015 patent) and U.S. 10,604,024 (024 patent) in July 2014.

Hua Sixu believes that the purpose of the US NOCO company's move is to prevent competitors from entering the market, but the US NOCO company's target is not only Hua Sixu, but also nearly 110 companies in the power supply industry.

According to reports, in January 2021, the US company NOCO launched a 337 investigation against 110 automotive emergency starting power supply companies at the US International Trade Commission (hereinafter referred to as "ITC"). The investigation case (ITC-337-TA-1256) involved Two U.S. NOCO company patents from the same family - U.S. 9,007,015 (015 patent) and U.S. 10,604,024 (024 patent). At the same time, this case also became the single case with the largest number of companies involved in the history of the "337 Investigation".

However, before the ITC filed the case in March 2021, the US company NOCO withdrew its charges against 66 companies. Since then, the ITC investigation has involved 44 companies including Shenzhen Carku Technology Co., Ltd. ("Canku"), 13 of which are Chinese companies.

When some companies with insufficient funds or weak awareness of intellectual property protection face high litigation fees and cumbersome litigation procedures, most of them will choose to give up participating in the "337 investigation", and giving up will bring the risk of absence to the company. ——Forced to withdraw from the US market. However, even if they choose to pay high fees and respond proactively, Chinese companies have very little chance of winning.

According to historical data, the probability of responding Chinese companies being found not to infringe in the Section 337 investigation is only about 5.2%: from 2012 to 2021, there were a total of 599 Section 337 cases, of which 101 were found not to be infringing, accounting for 18%; A total of 558 Chinese companies were defendants, and a total of 29 Chinese companies were found not to infringe. The probability of a company being found not to infringe was about 5.2%.

In this context, Hua Sixu decided to face this "337 investigation" head-on. Hua Sixu believes that winning the case is not only of great significance to the company itself, but also can actively play the role of an industry leader - it can not only demonstrate the R&D capabilities and trade strength of Chinese companies, but also set a good example for national enterprises to enter overseas and encourage national enterprises to expand overseas. Enterprises have the courage to take up legal weapons to protect their property rights.

2. Karku is tough and tough, all because he is confident

In order to regulate the development of the industry, prevent the American NOCO company from monopolizing the industry, and stimulate domestic enterprises to pay attention to and protect intellectual property rights, Hua Sixu President Lei Yun contacted the American law firm Perkins Coie as soon as possible after the American NOCO company applied to initiate a 337 investigation. Lawyers Bing Ai and Kevin Patariu of (Perkins Coie LLP) started working closely to prepare to actively respond to the lawsuit, spending millions of dollars in lawyers and litigation fees, and spent nearly 20 months negotiating with the US NOCO The company mediates the dispute. But it was not just money ability that allowed Karku to win the case, but also strategy.

1. Strengthen intellectual property legal awareness

Hua Sixu said that before the US company NOCO launched the Section 337 investigation, Hua Sixu had already realized the importance of intellectual property rights. Although it is difficult to obtain evidence that the US company NOCO plagiarized Hua Sixu's technology through cooperation, according to the investigation, there are major problems in the patent application process of the US company NOCO. Therefore, after learning that the US NOCO Company applied for the 015 patent, Hua Sixu’s intellectual property team responded quickly and launched a lawsuit against the US NOCO Company 015 at the US Patent Trial and Appeal Board (PTAB) in May 2020. Patent Invalidation (IPR) proceedings, and in November 2021 successfully obtained a PTAB ruling that 22 claims of the 015 patent were invalid.

This invalid ruling caused the US company NOCO to initiate the "337 investigation". Shortly after, the US company NOCO took the initiative to withdraw the investigation of the 015 patent.

2. Unite the strength of Chinese enterprises and form an enterprise alliance

It is reported that Karku has invited 13 Chinese companies involved in the 337 investigation to form an automotive starting power supply enterprise alliance to play the role of an industry leader, share information, help each other, jointly respond to the 337 investigation, and help some small and micro enterprises to circumvent Risks caused by insufficient manpower and funds. Since then, the enterprise alliance has gained the attention of leaders of the Guangdong Provincial Government, the Guangdong Provincial Overseas Rights Protection Center and other units, and has received policy guidance from government leaders, which has contributed to Karku’s eventual victory in the lawsuit and the resolution of the industry crisis.

3. Strong technical research and development capabilities

The success of this 337 investigation is also inseparable from the company's emphasis on technology research and development. According to reports, Hua Sixu has been in the automotive emergency start industry for 11 years and has never lowered its emphasis on technology research and development. The company invests tens of millions in R&D expenses every year to establish a first-class R&D laboratory and has obtained 429 global patents since its establishment.

Recently, Hua Sixu has launched another new product based on the development of lithium battery technology - Karku outdoor power supply, which can be widely used in self-driving travel, outdoor camping, photography and aerial photography, rescue and disaster relief, power outage emergency, medical rescue, outdoor operations and other fields.

According to reports, Hua Sixu has been interviewed by CCTV, Shenzhen Satellite TV and Guangdong Satellite TV as a national-level specialized and new "little giant" enterprise and a national high-tech enterprise. It is undeniable that Hua Sixu has delivered a satisfactory "ten-year answer" in technology research and development.

On April 29, 2022, the ITC judge issued a preliminary ruling: The US NOCO Company’s 024 patent does not meet the requirements of the domestic technology industry, and Carku does not involve the infringement of the 024 patent, that is, Carku’s products do not infringe, while Boltpower, which was also investigated However, it was confirmed by the ITC as product infringement. On August 29, 2022, the ITC judge made a final ruling and upheld the conclusion of the preliminary ruling.

The victory of this "337 investigation" confirms the truth that forging iron requires one's own strength. Enterprises must have strong technological research and development capabilities and a complete corporate intellectual property protection network to protect the development of enterprises. This phenomenon also serves as a disguised warning to purchasers. They must be cautious when choosing cooperative suppliers and pay attention to the property rights of the partners. IPRdaily Chinese website (iprdaily.cn)

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