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A jury in the U.S. District Court for the Eastern District of Wisconsin found that Chinese furniture maker Minhua Holdings infringed multiple patents of U.S. furniture maker Raffel and deliberately misappropriated the trade dress of its products, requiring it to pay more than $100 million in damages. The technology covered in these patents is related to multifunctional illuminated cup holders that are mounted on furniture. The jury awarded Raffel approximately $9.3 million in compensatory damages for mislabeling, patent infringement, and trade dress infringement, and an additional $97.5 million in punitive damages for malicious misappropriation of the trade dress of Raffel's cup holders. Compensation totaled 106.8 million US dollars, or about 708 million yuan.

It is understood that Man Wah Holdings was established in 1992 and is now headquartered in Hong Kong, China. Its main products include functional sofas, technology mattresses, sponges and panel furniture. Its products are exported to overseas markets such as the United States and Europe, and overseas market revenue accounts for more than half of the group's total revenue, and it is also sold through direct-operated stores and franchised stores in mainland China. The company owns two major brands, "Chivas" and "Nordic Livable".

Man Wah Holdings was originally a customer of Raffel. At the end of 2017, Man Wah Holdings hired a company to imitate and produce Raffel's luminous cup holders. Its design and appearance are almost the same as Raffel's products. At the same time, Man Wah Holdings still buys genuine products from Raffel, but in decreasing numbers. In 2018, due to the failure of the imitation product, some American users directly contacted Raffel to request a replacement, and the imitation product was discovered.

In November 2018, Raffel sued Manhua Holdings in the U.S. District Court for the Eastern District of Wisconsin, accusing it of infringing seven patents. The first five patents are all named "illuminated cup holder in seat device", and the last two are design patents named "cup holder" and "switch". Raffel filed a total of 15 claims, in addition to patent infringement, other claims include: false labeling, trade dress infringement, unfair competition and false designation of origin, trade dress dilution, trade secret misappropriation, unjust enrichment, Breach of contract, breach of duty of good faith and fair dealing, etc.

Raffel believes that in 2018, Man Wah Holdings sold a total of about 60,000 counterfeit goods, and there are still about 14,000 counterfeit goods in circulation, which means that Raffel may continue to suffer brand damage in the next few years. Man Wah Holdings believes that from 2016 to 2018, the total sales revenue of Raffel's light-emitting cup holders was only US$24.4 million, so the amount of compensation it requested was too high.

"Under U.S. law, U.S. patent infringement is determined based on internal evidence and external evidence. Internal evidence consists of the patent's claims, description, and patent examination file. Courts require that all internal evidence records be used to consider attribution of rights. Extrinsic evidence Evidence ranges from dictionary definitions to expert evidence. The trial court judge has the discretion to decide whether to admit extrinsic evidence, but it need not take extrinsic evidence into account if it can reasonably explain the attribution of rights.” in Chen Xingcheng, a lawyer from Ang Law Firm, told reporters.

U.S. patent infringement is generally determined according to the literal infringement theory. Chen Xingcheng introduced that literal infringement refers to the alleged infringing product or method compared with the claims of a patent, the accused infringing product or method has every technical feature in the claim; Every limitation or element can be found in the alleged infringing product or method, then the alleged infringing product or method constitutes a literal infringement of the patent.

At the same time, the situation of equivalent infringement should also be considered. "Infringement equivalent is defined relative to literal infringement, and means that the alleged infringing product or method is compared with the claims of a patent, and one or more elements of the alleged infringing product or method, although inconsistent with the limitations or The elements are different, but there are only insubstantial differences between the two. In other words, one or more elements of the alleged infringing product or method are equivalent to one or more of the limitations or elements in the claims, then the alleged infringing product or method constitutes an equivalent infringement of the patent." Chen Xingcheng said.

In this case, the issue of trade dress infringement is also involved. Chen Xingcheng said that under US law, trade dress, like trademarks, is protected by the Lanham Act. Because trade dress is generally not easy to determine in advance through trademark search, it has become a common method used by American manufacturers to suppress Chinese products that compete with them. Chinese enterprises should attach great importance to such infringement issues.