China’s top court, the Supreme People's Court, has set a new precedent in intellectual property enforcement by ordering WM Motor to pay Geely approximately 640 million yuan for theft of trade secrets and technological infringement.

In its second-instance ruling, the Supreme People’s Court applied double punitive damages and ordered WM Motor to compensate for economic losses and reasonable expenses totaling approximately 640 million yuan. This ruling marks the highest compensation ever awarded in China's intellectual property infringement lawsuits.

Disputes between the two sides date back to 2016 when nearly 40 senior management and technical personnel from a Geely Automobile Holdings Limited unit resigned and subsequently joined WM Motor Technology Group Co., Ltd. and its affiliated companies. Among them, 30 individuals joined WM Motor immediately after resigning.

In 2018, Geely discovered that WM Motor and its affiliated companies had filed applications for 12 utility model patents. These applications listed some of its above-mentioned former employees as inventors or co-inventors and utilized the chassis application technology for new energy vehicles, including 12 sets of chassis component drawings and digital models, which they had accessed and acquired at their previous employment.

Meanwhile, WM Motor and its affiliated companies were found to launch the EX series electric vehicles in a short period a short without any prior technical accumulation or legitimate sources of technology. This action raised allegations of infringing upon the trade secrets of Geely.

Geely filed a lawsuit in the Shanghai High People’s Court, requesting WM Motor and its affiliated companies to cease the infringement and compensate for economic losses and reasonable expenses totaling 2.1 billion yuan.

The Shanghai High People’s Court, in its first instance ruling, determined that WM Motor had infringed upon the technical secrets of five sets of chassis component drawings owned by Geely, awarding Geely 5 million yuan in economic losses and 2 million yuan in reasonable expenses.

Both Geely and WM Motor were dissatisfied with the first-instance judgment and appealed to the Supreme People's Court.

The Supreme People's Court, after thorough review, concluded that this case involved an organized and planned effort, using improper means, to systematically poach talent and technological resources in the new energy vehicle sector, leading to the infringement of trade secrets.

The court ordered that Motor and its affiliated companies, along with all current or former employees, and suppliers of WM EX series electric vehicle chassis and components holding or controlling any documents, models, or other technical data containing the implicated trade secrets, shall proceed to destroy or transfer them to the trade secret rights holder.

The court also imposed double punitive damages on WM Motor. WM Motor was ordered to compensate Geely approximately 640 million yuan for economic losses and reasonable legal expenses.

Source: China IP