On September 23 Beijing time, a ruling from the US International Trade Commission (ITC) came as the first stage result of the Sucralose 337 Investigation brought about by the UK-based Tate & Lyle PLC and its US subsidiary (jointly called Tate & Lyle hereinafter) against Hebei Sukerui Science and Technology Co., Ltd and others (all together 25 Chinese and foreign companies). ITC determines that Sukerui does not infringe Tate & Lyle’s 463 patent; that Claims 1-3 and 16-18 of the 463 patent at issue are invalidate; and that there is no 463 patent related domestic industry. (i.e. The patent is not exploited in the U.S.) This is the first-stage success of one more 337 investigation that Lifang represent.

Back on April 6, 2007, Tate & Lyle complained at the US ITC that Sukerui and the others had infringed five of its patents for sucralose and related intermediate compounds manufacturing technology. On May 5, 2007, ITC decided to initiate the 337 investigation. Beijing Lifang & Partners have been entrusted by Sukerui, Beijing Forbest Trade Co., Ltd., Beijing Forbest Chemical Co., Ltd. and Forbest International USA, LLC to respond to the charge together with Kenyon & Kenyon LLP.

After more than a year’s hard work, we obtain the initial ruling in favor of the Chinese enterprises. In addition to ruling that Sukerui do not infringe any patent rights, ITC also announce that the US patent at issue invalid and that there is no domestic industry. Other respondents are also discharged from the allegation. However, as for those companies which did not respond to the investigation, ITC rule that they have infringed Tate & Lyle’s patent rights and recommend the order of limited exclusion against them, which means that the alleged products of these companies will be excluded from the US market. Mr. Jiabin Wang from Lifang & Partners who represents Sukerui and other respondents holds the view that Chinese companies should be confident and affirmative to face US 337 investigations. Otherwise, they will lose not only the lawsuit, but probably the future market.

Lawyer’s Note:

No suit is bound to lose. What one needs is the resolution to act. At the time when Chinese companies are repeatedly affected by US 337 investigations, the strategy to respond has become an issue to be faced by Chinese enterprises or even the whole export community. Before long, the 337 investigation concerning semi-conductor lighting represented by Lifang & Partners reached global settlement between the plaintiff and defendants. Now we again win a significant victory over this one on sucralose. These indicate that, as part of their global development strategy, Chinese enterprises must have the courage to confront international IPR litigations in order to brave the present troublesome time. In the meantime, they also need to pay more attention to IPR and build up an effective estate of patents or patent pools. In order to have prior advantage in market competitions, they can take care to have necessary IPR investigations done by specialized IPR agents before signing export contracts.

Contributed by Yongyuan Liu, Lifang Partner