Samsung made to pay real damages in China

Issue 8 of the Kangxin IP Journal carries a short but significant note on a recent damages award in Eastern China. The feature states:

"Samsung Electronics Co. of the Republic of Korea has been ordered to pay 50 million yuan (7.3 million U.S. dollars) to Zhejiang-based Holley Communications for infringing Holley's dual-mode cell phone patent. The rule was made by the Intermediate People's Court of Hangzhou, capital of Zhejiang Provinces on December 20th, 2008.

Holley Communications alleged in 2007 that cell phones made by Samsung violated its patent which allowed cell phones to operate on both CDMA and GSM networks. The patent pertaining to a dual-mode CDMA/GSM mobile communication method and its communication equipment was obtained by Holley in 2002.

The 20-month patent dispute started when Holley filed the lawsuit in April 2007, calling for compensation and cease and desist action. A month later, Samsung requested that China's SIPO declare that the patent was invalid. The court opened the session in May, 2008 after SIPO declared Holley’s patent valid.

This has been the largest compensation in China's cell phone industry, but officers of Holley said they would continue to seek more compensation".

While Chinese courts have been criticised for making damages awards that hardly make it worth suing in the first place, the award here looks solid enough -- though no indication is given as to its relation to Holley's actual loss or the basis on which it claimed damages.  A cynic however might say that, with a Canadian claimant and a Korean defendant, this was a dispute the outcome of which was never likely to hit local industrial interests very hard.