Big News! China's Enterprise is Fighting Back-SMOORE Launched Selection 337 Investigations in the U.S.

Recently, SMOORE is getting attention again for it has independently launched 337 investigations in the U.S.

In the morning of April 27^th, Guangdong Administration for Market Regulation (Guangdong Intellectual Property Administration) published a list "Guangdong Province's Ten Big News related to Intellectual Property in 2021". The news that Shenzhen Customs helps a local company (SMOORE) open 337 investigation is selected, which is also listed on Shenzhen's corresponding leaderboard.

According to related reports, in 2021, to respond to the leading high-tech enterprise, SMOORE's appeal to protect its intellectual property, Shenzhen Custom innovated the joint intellectual property protection mechanism, worked out a protection scheme. After months of efforts, the authority seized 4 shipments of over 1.8 million allegedly infringing goods. In October 2021, based on the evidence offered by Shenzhen Customs, SMOORE launched selection 337 investigation into 38 companies in America, which is the first time a Chinese enterprise, as the prosecutor, has independently opened such an investigation in the U.S. against foreign-related infringement of the intellectual property right of Chinese firms. As of January 2022, 15 defendants had signed a letter of consent or a settlement, making a groundbreaking achievement in helping China's enterprise with intellectual property protection abroad.

"Make in China" starts to take the driver's seat and give up the passive role

The main reason why the case attracts strong attention maybe because it is that SMOORE is the first Chinese company that opens 337 investigation as an accuser against foreign companies.

Before that, SMOORE found that the US market was full of infringing products and then began to investigate the criminal activity, working with Shenzhen Customs to conduct infringing products seizures. According to Shenzhen Customs, right after receiving SMOORE's request of safeguarding overseas intellectual property, it immediately established a protection plan. In 2021, the authority conducted a campaign to protect the emerging electronic atomizer industry.

In October 2021, SMOORE opened 337 investigation in America thanks to the infringing products seized by China's Customs. Xu Chi, the head of SMOORE's Intellectual Property and Law department, has said through the investigation opened at ITC (International Trade Center£) the company aims to implore the organization to issue exclusion order and injunction against the infringers.

He also revealed, the accused is suspected of infringing 3 of SMOORE's patents related to FEELM: the "623 patent" (United States Patent Nos. 10,357,623) which involves cotton-free liquid storage technology, the "763 patent" (10,791,763) which has something to do with the structure of atomizer, the "762 Patent" (10,791,762) related to metal ceramic heater, and its trademark. Once the court rule against the 38 suspected companies after investigation, ITC will ban them from selling the infringing atomizer in the US. Meanwhile, an exclusion order will also be released to prohibit it from being imported to the US.

SMOORE revealed that as of April 20. 2022, 17 of the 38 companies has sign up a letter of consent of settlement. In addition, another 10 are having talks with SMOORE about the settlement or has released a signal of reconciliation.

Focusing on core layout, patent barrier is established in 4 aspects

Experts in intellectual property think that the reason why SMOORE dares to protect its rights abroad in global competition and sees a breakthrough is that it has kept investing in technology and science, and strengthening its innovation capacity. It is reported that the company has gotten patents in 20 countries or regions, most of which are the key markets or production bases of electronic atomizer, namely China, America and Europe.

According to statistic, as of the end of 2021, patent applications filed by SMOORE add up to 3,408, covering four types of technologies respectively related to temperature control, heating, leak proof, liquid storage. Last year, the company got 1187 newly approved patents, with 60% of increase from the previous year. Its patents largely cover heating technology, electron technology, technology related to the product's structure and appearance. There are more than 600 patents are associated with the core component of electronic atomizer-heater. What's more, It is said that most of them focus on FEELM, building the patent barrier for the core technology.

SMOORE said it has filed a certain amount of patent application for every single key product, preventing them from being copied illegally, so as to enhance the company's competitiveness. The core patented technologies related to liquid storage, heating, ceramic filter matching are all applied to the electronic atomizers equipped with ceramic filter. In addition, SMOORE also makes an input on other aspects of atomization technology and get a great number of patents for new atomization technology and new heater, facilitate the building of patent barrier in all respects.

SMOORE is going global by making joint effort on development and research

Overseas intellectual property dispute is always the main issue needed to be tackled for China's enterprises which eager to join international market. SMOORE is today's biggest electronic atomizer producer in the world, with a strong team behind, and greater advantages in IP protection and R&D. It has an IP department of 30 members. Among them, 20 members are qualified as professional patent agents in China, and 1 has gotten the patent agent's license in America. 13 have passed the exam to be qualified as professional lawyers in China. 1 is equipped with American lawyer's license. 2 have earned law degrees in foreign university. One of the members named Luo Ying even squeezed in a leaderboard which listed 40 Chinese elites of 2021 who work for IP-related enterprises and are under 40.

Xu Chi said SMOORE has built up a professional legal architecture to support intellectual property protection globally. In 2019, the company filed two lawsuits in U.S. district court against overseas e-commerce platforms which infringe on its intellectual property right, and won the two cases. The accused were ordered to pay over 9 million dollars to SMOORE. "for all this time, SMOORE has conducted business legally and globally. It is capable of and determined to defend its rights and interests as a legal supporting system for Intellectual property protection have been established globally." Xu Chi added.

It has been introduced that SMOORE reported 13,755 billion revenues in 2021. It will invest 1,68 billion on R&D, more than the total input of the last 6 years. Chen Zhiping, the chairman of the company's board of directors, said: "the seed we disperse today will bring in fruitful outcomes tomorrow."

"Only the core technologies, new industries, new concepts built upon basic science can ensure the marginal output of capital and labor force maintains positive momentum." Zhangying, the associate dean of Peking University's Guanghua School of Management said, "moving to a new scientific and technological innovation-driven economic development is a long process, for it requires the great efforts and continuing input of the the whole society."

SMOORE becomes the pioneer and trailblazer of Chinese enterprises

Over the past few years, the number of 337 investigations opened by the US against importers has been climbing, and the involved companies come from over 60 countries (regions) At the same time, the main target of American 337 investigation has changed from Japan in the 1970s, to Taiwan in the late 1900, to mainland Chinese since the 21th century.[1]

Facing with the soaring investigations, Chinese enterprises are rarely able to present their defense. They not only don't have a professional legal team to answer the charge, but also are not proactive enough to raise defence. What's worse, the two major challenges-the lack of the very expertise and high cost needed to deal with 337 investigations-cause many companies to directly give up the opportunity to defend themselves.

Passively giving up the chance to defence or settling for compromise may temporarily work, but will not serve as a solution forever. Under this situation, SMOORE makes great effort in its innovative products and fights back with determination, blazing a trail for Chinese companies in protecting intellectual property abroad.

Therefore, stepping up to answer the charge is an important strategy for China's companies to deal with 337 investigation. On one hand, Taking the initiative by engaging in all procedures of the investigation like submitting evidence, attending the hearing can protect our companies' intellectual property and legal interests. On the other hand, answering the charge involves having negotiation with accuser to reach a settlement or to get a consent order issued by ITC. A case may even be dropped by the plaintiff if our enterprises actively involve in the investigation, so that we can avoid being excluded from the US market because of the relief measures taken by ITC. The companies and the whole industry won't suffer a devastating blow in export business.[2]

It is reported that ITC will issue a preliminary decision on the 337 investigation opened by SMOORE in November 2022.

Reference:

[1]Yuan Hongling, and Wang Shiye. The Study on the Strategies for Chinese enterprises to deal with American 337 Investigations[J]. International Trade, 2018, (08) 17-21+39.

[2]Han Liangqiu. The Analysis on Chinese Enterprises' Strategies for Responding 337 Investigation in the Post-pandemic Era-Based on the Review of Chinese companies-related cases of 2019[J]. International Business and Economy, 2020, (05) 6-8.

Source: SMOORE

Editor: IPR Daily-selly