Australian manufacturer is successful in asserting patent in China

Date: 2015-10-21
Author: Tracey Hendy

Lucas Mills made media headlines for its win of 2 million yuan ($430,000) against a Chinese company who infringed Lucas’ patent for its flagship product, a portable sawmill. The sawmill allows logs to be cut into milled timber on the spot, saving the cost of transporting the felled tree to a mill.

The win was the highpoint in a long relationship between Lucas Mill and Freehills Patent Attorneys, which began with preparing and filing patent applications around the world, including China. Tracey Hendy, Special Counsel of Freehills Patent Attorneys assisted Lucas and its Chinese lawyers to enforce the Chinese patent.

Tracey talks to Mr Lucas, owner of Lucas Mill about the win.

How did you first come by the copies?

Matt, one of my employees maintains a weekly online vigil. About 18 months ago, he found a Youtube clip from the Chinese manufacturer. They were even using the Lucas name!

Why was it important for you to enforce your patent?

We have a hugely successful product with over 15,000 units sold worldwide. We need to stop copies that pop up and cut into our market, especially when the Australian dollar is strong and we are at a labour cost disadvantage. We were also worried about safety - the sawmill in the Youtube clip was missing a safety barrier between the sawblade and the operator. Because the knock-offs looked the same as ours, even down to the green winch covers, there was a risk that the Chinese knock-offs could be confused with ours and damage our safety reputation.

What was the most difficult part of the case?

Getting the evidence to prove patent infringement in the Chinese court - court procedures and their requirements to run a case - were considerably difficult. We needed a sawmill to get us into court and the only place to buy one in China was the Chinese factory. But we couldn’t just knock on the door of the factory – that might have been risky for the buyer.

So what happened?

All members of our legal/patents team put their heads together and came up with a plan.  Chinese customs seized one of the knock-off sawmills at Qingdao port as it was being exported. This spring boarded us into the Chinese court in Qingdao - a court far away from the Chinese factory.

So was it an exact copy?

Not quite. The court carefully studied the seized sawmill and saw some differences from our patent. The Chinese court didn’t get hung up on the exact wording of the patent though. The court could see the identical functions.

And the outcome?

The Chinese court said the seized sawmill was an infringement of our patent and awarded us 2 million yuan [$430,000] in compensation.

Was justice expensive?

If we get the dollars [$430,000] from the Chinese manufacturer then we’d definitely be in front on our costs.

What value do you put on protecting and enforcing IP?

Over the years we’ve spent a lot of money on patents and we were probably lucky in China. But what a lot of businesses don’t talk about is the fear factor in having the patents in place in the first place. It’s hard to measure the impact of a negative - the absence of copycats and lookalikes.

Would you do it again?

Yes, most definitely. It’s about sending a strong message and I doubt they’ll do it again.

What three pieces of advice would you give to other Australian manufacturers?

Obviously registering your patent in the first place is essential. Secondly, I think our online vigil gave us early warning that copies were entering the market. Thirdly, you need skilled Chinese lawyers and good communication channels with them. Our Australian patent attorney provided a buffer to overcome the cultural and legal barriers and was essential to managing the process.

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