On March 19, 2024, the Supreme People’s Court handed down the final judgement in the long-battled patent infringement case Novozymes A/S & Novozymes (China) Biotechnology Co. Ltd (collectively Novozymes) vs. Longkete and Longda. Affirming the Beijing IP Court’s judgement of the first instance, the Court found Longkete liable for infringement of Novozymes’ patent and awarded Novozymes, a biotech company headquartered in Denmark, RMB 23 millions (over 3 million USDs) in compensation (22 million of damages and 1 million reasonable expenses)
Novozymes A/S owns the Chinese Patent ZL98813338.5 entitled “thermostable glucoamylase”, which claims, among others, a fungus-derived enzyme capable of hydrolyzing starch to produce glucose under high temperatures.The patent was filed in 1998 and granted in 2006, providing protection of Novozymes’ glucoamylase products in China.
First Round: Novozymes vs. Longda
In March 2011, Novozymes learned that Longda, a major Chinese company based in Shandong province, along with a number of other smaller firms, was marketing unauthorized copies of its glucoamylase product.Novozymes sued Longda for infringement of ‘338 patent in Tianjin municipality.
Based on the conclusion of judicial appraisal, the Tianjin No. 2 Intermediate People’s Court found that Longda’s glucoamylase product literally infringed the 338 Patent, granted permanent injunction, and awarded one-million statutory damage to Novozymes. Longda appealed, and Tianjin High Court affirmed on October 31, 2013.
Battle over Patent Validity
In the course of the patent infringement case, Longda filed for invalidation of the ‘338 patent with the Patent Reexamination Board (PRB) of Chinese Patent Office.
The main issue was the support of the claims, in particular the percent identity limitation of the amino acid sequence of the enzyme, which serves to extend the claim broader than the specific enzyme sequence disclosed in the specification. The Chinese Patent Office used to be relatively lenient on sequence identity, making it possible for the claims to be granted with sequence identity languages. However, by the time the invalidation proceedings were initiated, the Chinese Patent Office had long tightened the support requirement and percent identity had become all but unallowable. To make the matter worse, the claims would not cover Novozymes’ enzyme - and hence Longda’s – but for the sequence identity.
The PRB decided to maintain the patent in amended form. In the maintained patent, the enzyme was defined, inter alia, by its origin (the fungal species) and a very high sequence identity (over 99%). Though much narrower than those granted, the maintained claims could still cover Longda’s product.
Longda appealed the Decision to the Beijing No. 1 Intermediate People’s Court. On December 20, 2013, the court overturned the decision, ruling that the remaining claims still lack support by the description and should be invalid. Novozymes appealed the judgment to the Beijing High People’s Court, who affirmed on January 26, 2015.
Novozymes sought the last resort to file a petition for retrial with the Supreme People’s Court. In a rare move, the SPC granted the petition on June 6, 2016, and after hearing, the SPC ruled on December 30, 2016 to vacate the judgements of the two lower Courts and sustain the PRB’s decision, thus concluding the disputes over the validity of the ‘338 patent.
Second Round: Novozymes vs. Longkete & Longda
In 2017, Novozymes noticed that unauthorized copies of its glucoamylase products were still on the market. They turned out to be made and sold by the company of Longkete, a subsidiary of Longda. On October 8, 2018, Novozymes sued Longkete and Longda for patent infringement before the Beijing IP Court.
While the case was going on, the ‘338 patent expired in November 2018, so Novozymes dropped the claim for permanent injunction. Unlike in the first round, Novozymes sought damages based on Longkete and Longda’s illegal gains from infringement during the period of December 16, 2016 through the expiration date of the ‘338 patent, November 25, 2018.
On October 9, 2021, the Beijing IP Court ruled that Longkete should solely be liable for infringement. The court rejected Longkete’s defense of non-infringement, and essentially agreed with Novozymes’ method of calculation of Longkete’s illegal gains.
With the SPC’s affirmation of the Beijing IP Court Judgement, Novozymes’ 14-year fight to protect its IP finally came to fruition.
Ms. Amy Feng and her team at the law firm of Wu, Feng & Zhang handled the two rounds of infringement and four episodes of validity battle for Novozymes.
