Company A is a well-known brand holder of a washing machine in China, and Company B is a small and micro enterprise specializing in the production of washing machines in a certain place. Company B won the contract to produce a certain type of household washing machine for Company A, and it is estimated that the normal profit will be 500,000-700,000 yuan in three months. In the cooperation agreement, in addition to the normal commercial terms, the two parties also made the following agreement on the patent matters involved: "Party B guarantees that the products it produces will not infringe the patents or other intellectual property rights of third parties. If the related products are accused by a third party, all disputes shall be handled by Party A, and Party B shall unconditionally bear all legal consequences related to this and all losses suffered by Party A. "
Later, in the process of selling products, Company A was sued for patent infringement by a third party company. In order to maintain the market image, Company A quickly reached a mediation agreement with Company A under the auspices of the court, paying Company A a compensation of 800,000 yuan in one lump sum, and then notifying Party B, requesting Company B to bear all the losses of about 900,000 yuan according to the contract. After obtaining the case information, Company B found through analysis that the related products did not actually belong to the patent protection scope of Company A.. After negotiation, Company B actually paid 600,000 yuan to settle the matter.
Lawyer's statement
Most OEM contracts are comprehensive in nature, such as processing contracts, purchase and sale contracts and technology development or cooperation contracts, and their contents are often intertwined and highly professional. Under normal circumstances, the entrusting party often provides pre-made contracts, and this internal structure is quite stable, which inevitably includes detailed agreements on intellectual property-related issues. So it is difficult for non-professionals to find the problem. In addition, for processing enterprises, they are at a disadvantage in the negotiation process of licensing processing business cooperation, and often only pay attention to the game of commercial terms such as price, delivery time and method, product quality and so on. In the case that the negotiation of the above terms is often frustrated, it is easier to ignore or dare to review the intellectual property-related terms proposed by the entrusting party, laying a hidden danger for the possible risks in the follow-up cooperation.
The same is true in this case. Party B cooperated with well-known brand merchants for the first time and finally got the order, so it only filled in the agreed price and other contents in the blank space provided by the entrusting party and signed and sealed it. After being accused by Company A, the losses shall be borne by Party B according to the contract. It is also the natural result of Party A's choice to mediate the lawsuit without reasonable excuse for the relevant allegations.
In fact, if Party B proposes during the negotiation that if the product is accused of infringing intellectual property rights by a third party, the accused party shall immediately notify the other party and make every effort to deal with it actively. Then Party B will at least know something about this matter, so as to have the opportunity to participate in the settlement of the dispute, and take appropriate countermeasures such as invalid and non-infringement defense, so as to maximize the interests of both parties and not make concessions almost easily like this case.
In fact, in the subsequent cooperation, due to the intervention of professional lawyers, when Party B proposed amendments to the above terms, Party A accepted them without objection. Brand-fixing processing enterprises should pay attention to the communication and consultation of procedural matters of dispute resolution while paying attention to commercial contents such as price, so as to strive for their right to know, vote and handle disputes to maximize their initiative.
From the experience, a large number of brand-name processing enterprises are faced with intellectual property legal issues, in addition to patents, there are brand, copyright, trade secrets and other infringement and contract disputes, which should also strengthen audit and communication. In short, although the brand-fixing processing enterprises are objectively in a weak position in the negotiations because of their low popularity, weak R&D ability, fierce competition and low market profit, their awareness of legal risk prevention cannot be reduced. Of course, the involvement of professionals is also an important guarantee to protect the legitimate rights and interests of licensed processing enterprises.