u-blox, a publically listed global provider of positioning and wireless communication technologies and services, has been handed a favourable decision in its copyright infringement suit against Chinese rival Techtotop Microelectronic Technology Co. Ltd (TT). u-blox was represented by Rouse's strategic partner, Lusheng.
The decision, handed down on 20th July 2021 by the Hangzhou Intermediate Court, ordered TT and its distributor, Ebest, to cease distribution of its infringing TD1030 chip and modules and to pay u-blox compensation of CNY 10 million (approx. US$1.6M), as well as legal costs.
u-blox GNSS chips are widely used in devices such as vehicles and smart watches to provide satellite positioning. u-blox filed the lawsuit in 2019 after it discovered close similarities between TT’s TD1030 chip and modules and its own M8 GNSS receivers that could only have arisen through copying of u-blox source code. A Chinese court-appointed expert conducted analysis on the functionality of the TD1030 and reached the same conclusion. Despite TT refusing to submit its source code to the court to conduct a direct comparison, the court concluded that there was no other explanation than that copying had taken place.
This award puts u-blox into the top three rankings for highest damages awards for copyright infringement of software in China, based on research published in 2020 by CIELA, a litigation analysis service of Rouse. u-blox’s litigation counsel in this suit was Chinese law firm Lusheng.
This decision demonstrates that courts in China are more willing to reverse the burden of proof, and draw a negative inference against a defendant. In the case the evidence pointed strongly to infringement, but the defendant refused to provide any evidence to the contrary. The reversal of the burden of proof, particularly important for software disputes, where comparison of source code can be very burdensome or even impossible to conduct due to the inability to access the other party’s source code.
Sharon Qiao, Senior Partner, Head of Litigation Group & Principal at Lusheng Law Firm, a strategic partner of Rouse, commented:
"The Hangzhou court handled the highly technical issues very competently. The large damages award reflects a trend in Chinese courts towards higher damages in cases like this, where the commercial impact on the IP owner is significant.”