Sued for infringement! Shenzhen Dama paid nearly 1 billion yuan to settle

For cross-border sellers, intellectual property rights are a key issue that cannot be ignored if they want to develop smoothly in overseas markets.

Recently, the much-watched infringement case of Shenzhen-based TP-Link in the United States finally came to a conclusion.

1. Shenzhen big seller TP-LINK paid 980 million yuan in settlement

The final outcome of this infringement case that lasted more than a year was that TP-Link reached a settlement with US network equipment supplier Netgear .

As part of the settlement , TP-Link agreed to pay Netgear $ 135 million (approximately RMB 980 million) to end all legal disputes between the two parties and withdraw all pending lawsuits.

Netgear and TP-Link have very similar product lines and can be considered direct competitors.

It is understood that Netgear was founded in January 1996 by founder Patrick lo and co-founder Mark Merill in Silicon Valley, California, USA. Its main business is to provide innovative products and high-quality smart home wireless solutions for global commercial enterprise users and home individual users. Its products include whole-house Mesh WiFi, WiFi routers, USB WiFi adapters, etc. At present, Netgear has established branches in 34 countries around the world, and its products are sold through 59,000 dealers at 31,000 retail terminals around the world.

TP-Link is a brand of Shenzhen TP-Link Technology Co., Ltd., which was established in 1996. It is a mainstream manufacturer in the industry specializing in the research and development, manufacturing and marketing of network and communication terminal equipment, and is a leading global supplier of network communication equipment.

TP-Link products cover Ethernet, wireless LAN, broadband access, and power line communications. In addition to the existing core areas of transmission, switching, and routing, it is vigorously expanding into areas such as mobile Internet terminals, smart homes, and network security.

TP-Link is headquartered in Shenzhen, China, and has sales and service centers in 21 central Chinese cities including Beijing, Shanghai, and Guangzhou. It has also established overseas subsidiaries or representative offices in 39 countries and regions, and its products have been used in 128 countries around the world.

On e-commerce platforms such as Amazon and Walmart, TP-Link has many popular products that are selling well, with some single products selling tens of thousands of units per month.

Looking back at the dispute between TP-Link and Netgear, it all started in 2022.

This year, Netgear launched a 337 investigation against TP-Link , accusing TP-Link of infringing six US patents.

In April 2023, Netgear filed a complaint with the U.S. International Trade Commission ( ITC) , alleging that TP-Link 's products infringed certain Netgear patents.

The ITC investigated Netgear's allegations and assigned the investigation to Judge Doris Johnson Hines on May 8, 2023. Doris made a preliminary ruling that TP-Link violated Section 337 of the U.S. Tariff Act , determining that TP-Link 's products infringed Netgear's rights.

In order to counter Netgear's accusations, TP-Link filed a request for patent invalidation with the U.S. Patent and Trademark Office in September 2023, requesting the review and cancellation of two Netgear patents related to WiFi technology.

In the petition, TP-Link mentioned that the inventions covered by U.S. Patent No. 7,936,714 and U.S. Patent No. 10,327,242 are not patentable, have long been widely available in the public domain, and should not be considered exclusive patents.

But TP-Link's counterattack was unsuccessful.

On May 30, 2024, Doris Johnson Hines, administrative law judge of the U.S. International Trade Commission (“ITC”), issued a preliminary ruling that TP-Link’s multi-band Wi-Fi devices, routers, and Mesh network devices imported and sold in the United States infringed the patent rights of the U.S. company Netgear.

In response, Doris recommended that the ITC issue a limited exclusion order to the U.S. Customs and Border Protection to prevent further imports of TP-Link's infringing products, and issue a cease and desist order to TP-Link prohibiting further imports, sales, and marketing of TP-Link's infringing products.

It is reported that the ITC's preliminary ruling is subject to review by the entire committee, and the committee plans to issue a final ruling before October 3, 2024.

However, the patent dispute between TP-Link and Netgear ended with TP-Link paying a huge settlement.

This infringement case not only caused TP-Link to pay a huge amount of compensation, but also had a certain impact on the company's brand image.

TP-Link's patent dispute case also serves as a warning to cross-border companies that when entering overseas markets, they must fully understand local intellectual property laws and regulations, strengthen their awareness of intellectual property protection, and avoid infringement disputes.

2. Shenzhen Dama was sued for patent infringement by a global 3D printing giant

Some time ago, Shenzhen's Bambu Lab was sued for patent infringement by global 3D printing giant Stratasys, which also attracted widespread attention in the industry.

It is understood that Stratasys filed patent infringement lawsuits against six Chinese 3D printing companies in the U.S. District Court for the Eastern District.

The defendants include: Shenzhen Tuozhu Technology Co., Ltd. and its three subsidiaries ( Bambulab Limited, a Hong Kong company under Tuozhu, Tuozhu Technology Limited, a Hong Kong company under Tuozhu, and Shanghai Contour Technology Co., Ltd.), as well as Beijing Tiertime Technology Co., Ltd. and Beijing Yinhua Laser Rapid Prototyping and Mold Technology Co., Ltd.

In the lawsuit, Stratasys mentioned that these companies used many of its patented technologies without authorization, seriously infringing Stratasys' intellectual property rights.

Among them, the lawsuit against Bambu Lab mainly involved infringement of five patents, namely: U.S. Patent Nos. 9421713, 9592660, 7555357, 9168698, and 10556381, involving 3D additive printing technology using a cleaning tower, a building base in a method of additive manufacturing with high-temperature thermoplastic materials, a method for generating a build path for a three-dimensional object based on an extrusion-based layer stacking system, a method for detecting contact force between an extruder or other tool head and an independent structure in a 3D printer, and a 3D printer with an extruder or other tool head.

It should be noted that the scope of the patents that Stratasys sued Bambu Lab for alleged infringement is very broad, almost covering the more mainstream 3D printing technologies on the market, which means that many companies using these technologies may become potential targets of Stratasys' lawsuit.

Stratasys not only accused Bambu Lab of infringing its patents, but also accused Bambu Lab of having its servers in China and having security vulnerabilities.

According to the lawsuit, Stratasys requested the court to make the following ruling: requiring the defendant to compensate the company for the losses caused by patent infringement and to double the compensation according to the regulations. At the same time, the plaintiff also requested the court to issue a permanent injunction against the defendant and its respective company executives, agents, employees, etc., prohibiting them from infringing these patents and prohibiting them from inducing others or third parties to infringe these patents. In addition, the plaintiff also requested the court to order the defendant to pay the plaintiff's attorney fees and other appropriate expenses and compensation.

Who is Stratasys, the company that sued Bambu Lab?

Stratasys can be said to be a strong and established leading 3D printing company. Since 1988, Stratasys has entered the 3D printing industry, mainly providing innovative 3D printing solutions for industries such as aerospace, automotive, consumer products and healthcare. It has a large market share among all companies in the 3D printing industry.

As early as October 1994, Stratasys successfully IPOed on NASDAQ.

Currently, Stratasys owns approximately 2,600 global patents.

Since 2011, Stratasys has used its previously accumulated capital to complete a number of acquisitions to expand its business.

Initially, Stratasys' acquisitions were mainly focused on the polymer field. In 2021, Stratasys officially acquired Xaar 3D, Origin and RPS, adding three polymer technologies after the acquisition.

In 2022, Stratasys acquired Covestro's AM business unit, expanding its polymer material portfolio.

In addition, Stratasys is also accelerating its layout in the consumer market through acquisitions. It previously acquired MakerBot and merged MakerBot with Ultimaker in May 2023.

Despite this, Stratasys still faces market challenges, and the company has been in the red since the beginning of 2020.

In 2023, Stratasys' revenue was $626 million and its net loss reached $123 million. In the first quarter of 2024, Stratasys lost more than $20 million. Capital budget constraints continue to affect customers' purchase of new systems.

Stratasys, which is at a disadvantage in the market, began to turn its attention to other peers.

It is worth noting that as early as 2013, Stratasys had filed a patent lawsuit against a Chinese company. The company that sued at that time, TierTimes, is also suspected to be one of the defendants this time.

As a new company in the 3D printer industry, BambuLab has been developing rapidly in recent years.

BambuLab was founded in 2020 and is headquartered in Shenzhen, China. It is committed to revolutionizing the desktop 3D printing industry with cutting-edge robotics technology. The company has established R&D centers in Shenzhen and Shanghai, and an office in Austin, USA. It took Bambu Lab only three years to become the leader in the category.

According to the 2023 "3D Printer Brand Influence Report" released by domestic media , Chinese brands alone occupy 4 seats in the top 5 cross-border e-commerce 3D printer brand influence list, with Bambu Lab ranking third.

Industry insiders said that Tuozhu Technology's monthly sales revenue currently exceeds 100 million yuan. According to data from EqualOcean, Bambu Lab's revenue is expected to reach 1.5 billion yuan in 2023.

The rapid expansion of Bambu Lab's business also made Stratasys feel threatened by the market .

Currently, the latest development in the case is that Stratasys has withdrawn its charges against Beijing Yinhua Laser Rapid Prototyping and Tooling Technology Co., Ltd. and Beijing Tiertime Technology Co., Ltd.

It is worth noting that the two companies represent the same entity , TierTimes .

At present, the Marshall Division of the United States District Court for the Eastern District of Texas has accepted the dismissal decision , and all claims requested by Stratasys have been withdrawn, but this does not affect Stratasys ' subsequent claims. This means that Stratasys may sue these two companies in the future .

However, the highly-watched Stratasys lawsuit against Bambu Lab is still ongoing. Stratasys is requesting a jury trial to handle the two lawsuits it has filed against Tozoo Technology , hoping to rule that Tozoo Technology has infringed its patents, claim related losses and attorney fees, and request an injunction prohibiting Tozoo Technology from selling related products in the future.

If Bambu Lab loses the lawsuit, the subsequent impact will be very significant. Stratasys may continue to file lawsuits against other companies that use similar technologies, which will directly affect the sales of these companies' products in North America.

3. The two giants of sweeping robots launched a patent battle

It can also be seen from the above litigation cases that as competition among peers becomes increasingly fierce, companies are often sued for infringement.

This year, the infringement lawsuit between Roborock Technology and Dreame Technology, both leading companies in the sweeping robot market, came to a verdict.

Dreame Innovation Technology (Suzhou) Co. , Ltd. (hereinafter referred to as "Dreame Technology ") sued Roborock Germany GmbH, a subsidiary of Roborock Technology in Germany , claiming that Roborock Technology's two sweeping robots infringed Dreame's patents in "cleaning devices and cleaning equipment" .

In the end, the Düsseldorf District Court in Germany ruled that Stone Technology lost the case.

The Düsseldorf Regional Court ruled that Stone Technology:

1. Stop the sale, use and import of the patented products involved in the case in Germany. If violated, a single administrative fine of up to 250,000 euros may be imposed; if violated multiple times (within two years), the legal person may be detained for up to 6 months each time .

2. Provide information on suppliers and customers of relevant products sold in Germany from April 18, 2024, as well as sales volume, price and other information.

3. Provide production information of relevant products sold in Germany from April 18, 2024, relevant certificates of suppliers and customers, such as invoices, commercial promotion, cost and profit, etc.

4. The inventory of the products involved in the case will be handed over to the bailiff for destruction, and the relevant expenses will be borne by the client.

5. Recall products that have been sold and bear the related packaging and transportation costs.

6. Compensate for all losses that have been and will be suffered since April 18.

As a result of losing the case, Stone Technology also needs to bear the relevant costs of this lawsuit. In addition, the disputed amount of this lawsuit is 250,000 euros.

It can be foreseen that this judgment will inevitably have an impact on Stone Technology's German market.

Since 2023, the patent dispute between Dreame Technology and Stone Technology has been brewing.

In May 2023, Dreame Technology took the lead in launching the X20 series of sweeping robots equipped with bionic robotic arms .

In August of the same year, Roborock Technology launched the P10 Pro sweeping robot, which also features "robotic arm" technology.

The similar technologies of the new products also caused tensions between the two parties.

In October 2023, Guo Renjie, deputy general manager of Dreame Technology China, publicly accused a competitor in the industry of using Dreame 's own bionic robotic arm technology without the company's permission through social media , and issued a patent infringement warning letter.

Although Roborock Technology was not directly named , the market generally speculated that the competitor mentioned by Dreame Technology was Roborock Technology , because at that time only Dreame and Roborock had launched sweeping robots equipped with robotic arm functions , and the products were very similar.

By 2024, Dreame Technology was actively defending its rights.

In addition to overseas litigation disputes, Dreame Technology also sued Stone Technology for patent infringement in China.

In February 2024, Dreame Technology formally sued Stone Technology with the Nanjing Intermediate People's Court, accusing it of infringing its patent rights by implementing the technical solutions in its products that fell within the protection scope of the patent claims in question .

During the trial of the case, in order to promptly prevent the expansion of product infringement, Dreame Technology applied for pre-trial behavior preservation to the Quanzhou Intermediate People's Court on June 3, 2024, requiring Stone Technology to immediately stop manufacturing, selling, and promising to sell the two suspected infringing P10 Pro and P10 S Pro sweeping robots.

On June 5, 2024, the Quanzhou Intermediate People's Court ruled in favor of Dreame Technology's claims.

The successful implementation of behavioral preservation resulted in the temporary removal of two products of Stone Technology from the e-commerce platform.

Stone Technology was dissatisfied with the ruling of the Quanzhou Intermediate People's Court and applied for reconsideration to the Supreme People's Court , but its request was rejected on July 3.

Although sales of Stone Technology 's two related products eventually resumed, since the ban took effect on the eve of the "618 Big Sale", Stone Technology's estimated sales loss was more than 20,000 units.

4. How do cross-border sellers deal with infringement bans?

For cross-border sellers, daily store operations face many challenges, among which the most common are intellectual property infringement lawsuits and their accompanying temporary injunctions ( TROs) and preliminary injunctions (PIOs).

1. Temporary Restraining Order (TRO)

TRO (Temporary Restraining Order) is a temporary restraining order in the United States. Usually, the brand owner or intellectual property holder applies to the court through legal channels to temporarily restrict the sales rights of the suspected infringing sellers.

The validity period of TRO is generally 14 days. From the time the right holder files a lawsuit to the time the TRO is issued, the court will not notify the merchant of any information.

Generally speaking, when a seller receives a TRO, his store has often been frozen.

About 90% of the cases will apply for an extension of the TRO time limit. The initial extension usually ranges from 7 to 20 days. In a few cases, it may be extended multiple times and ultimately apply for PIO (preliminary injunction).

2. Preliminary Injunction (PIO)

A Preliminary Injunction Order (PIO) is a court order, also known as a permanent injunction, which is a longer-term prohibition on infringing behavior. It not only permanently prohibits the sale of related infringing products, but may also include severe penalties such as transferring account funds to the plaintiff and permanently freezing the account.

The application for PIO is usually submitted 5-10 days before the expiration of TRO. In the absence of objection from the defendant, the court will sign the PIO motion and it will take effect within 5 working days.

It is understood that the validity period of PIO can last until the end of the litigation and the defendant must be notified.

Sellers should note that once they receive a relevant ban, they should self-check the suspected infringing ASIN based on the TRO email and platform freeze email, and then determine whether it is trademark infringement, patent infringement or copyright infringement.

The response methods vary depending on the type of infringement.

1. Once a product is confirmed to be infringing, the seller should immediately stop selling all links in the store, because in the later settlement negotiations, the amount of compensation is often determined based on the store's sales during the freezing period. Stopping the sale of the store's products in a timely manner can effectively reduce the risk of compensation.

For infringement lawsuits, sellers can choose to settle or respond to the lawsuit. Because the product does infringe, the main purpose of responding to the lawsuit is not to win the case, but to lower the compensation. If the amount frozen by the store is small and the store is not valuable, the seller can consider giving up the store.

2. If the seller's product does not infringe the copyright and the lawsuit is caused by accidental injury or malicious prosecution by competitors, the seller should actively respond to the lawsuit and demand compensation for losses from the other party after the counterclaim is successful.

In general, cross-border enterprises must pay attention to intellectual property issues in their daily operations, conduct market research and risk prevention, and conduct early warning research on trademarks and patents to prevent infringement risks. If they find that there may be infringement of the patent rights of American companies, they should modify the products in a timely manner to avoid infringement of intellectual property rights.

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