Facts
In April 2004, Xuzanyou initiated two litigations against Jiangsu Baite Import & Export Trading Co., Ltd (“Baite”) and Huaian Kangbaite Carpet Co., Ltd (“Kangbaite”) for infringing the same design patent. In the first litigation, the Nanjing Intermediate People’s Court (“Nanjing Court”) ruled to freeze $40,000 (USD) savings of Kangbaite. In the second litigation, upon the request of Xuzanyou, the Nanjing Court granted a PI ordering Baite and Kangbaite to immediately cease production and sale of products the same or similar with the alleged design patent.
Subsequently, Baite ignored the PI and proceeded to export a batch of infringing goods to Hongkong for performing one of its contracts. However, such goods were seized by Nanjing customs for infringement and later on, upon Xuzanyou’s request, were held by Nanjing Court pending further proceedings. In August of 2004, Nanjing Court ruled in the first litigation that Kangbaite shall compensate Xuzanyou $25,000 (USD) and cease infringement. In February of 2005, Nanjing Court ruled in the second litigation that Baite and Kangbaite shall compensate Xuzanyou $170,000 (USD). While on appeal during a separate invalidation proceeding, the alleged design patent was held invalid by the State Intellectual Property Office (“SIPO”). Therefore, as a result of the invalidation the appellate court, Jiangsu High People’s Court (“Jiangsu Court”), reversed the rulings made by Nanjing Court in both litigations and dismissed Xuzanyou’s claims. As a result, Baite and Kangbaite sued Xuzanyou in Nanjing Court claiming various damages in the amount of $280, 000 (USD).
