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Chinese firms triumph in US battery suit

By Diao Ying (China Daily)
Updated: 2008-05-06 09:17

A US court's decision to shoot down the patent infringement claims of a US battery maker has ended a lengthy case against Chinese battery manufacturers and marks the first victory of Chinese enterprises in trade disputes such as this.

"It lasted five years and cost millions of dollars," the China Battery Industry Association said in a press release yesterday, "but the victory marks a perfect ending."

Experts said the win will put Chinese battery enterprises in a better position to tap overseas markets, the US in particular, which have seen an annual twofold increase in recent years.

According to Wang Jingzhong, spokesman for the association, battery from China costs only half that of the local ones in the US.

Energizer Holdings, the second largest battery maker in the US, in 2003 filed complaints against more than 20 companies, including nine Chinese manufacturers, claiming they had infringed on Eveready's zero-mercury-added patent.

According to an announcement by Hogan & Hartson, the law firm that helped Chinese enterprises with the case, the patent claims were unfounded.

The US Court of Federal Appeals for the Federal Circuit in late April affirmed a previous ruling by the US International Trade Commission (ITC) that Energizer's claim was not valid. It is the final decision on the case since this was the second time Energizer appealed.

Energizer used to ask Chinese manufacturers for $1 million as patent fees plus 2 to 3 cents on each battery sold. "That was unacceptable since we earn only 1 cent on each battery," said Wang from the association.

Chinese battery makers thus worked together to fight the suit initiated by Energizer. According to experts from the association, fees for Section 337 investigations are very high and therefore companies stand to gain when they work together and share the legal costs.

Under Section 337 of the Tariff Act of 1930, ITC is authorized to conduct investigations into claims of infringement on US intellectual property rights and other unfair trade practices in imports into the US, and take remedies such as issuing general or specific exclusion orders or cease and desist orders.

The US last year initiated 17 Section 337 investigations against Chinese enterprises. The products included recorders, digital TVs, memory cards and media players.

A recent report released by the Ministry of Commerce said Chinese enterprises are facing increasing trade barriers. Yu Benlin, deputy chief of the ministry's bureau of trade fairs for imports and exports, last week said enterprises should take the lead in dealing with these suits and protecting their interests.