This utility model patent infringement civil case was closed by an intermediate people’s court in Jiangsu Province in August 2025, selected as a typical intellectual property case for judicial protection by the Jiangsu Higher People’s Court中国知识产.... The plaintiff is Bright Tech Equipment Co., Ltd., a high-tech enterprise engaged in the R&D and manufacturing of industrial mixing equipment. The company obtained the utility model patent titled Low-noise vertical stirring cylinder with anti-adhesion scraper (Patent No. ZL202220356789.X) through independent research and development, and completed patent right evaluation and infringement risk assessment before market launch. The patent covers core structural features of industrial stirring equipment, with stable market sales and obvious economic benefits.
The defendant constructed a three-layer shell corporate structure to separate property and evade patent infringement compensation, hiding the actual controller’s identity behind multiple nominal companies:
1. Blue Ocean Trading Co., Ltd.: A shell trading company with zero production equipment, only responsible for receiving online orders and collecting sales funds; the company’s registered address is a shared virtual office without on-site staff.
2. Green Factory Processing Workshop: A sole proprietorship nominal processing plant with no independent sales channels, only accepting processing orders assigned by Blue Ocean Trading; all production equipment is leased under the name of a third unrelated individual.
3. Silver Star E-commerce Studio: An individual online store registered on mainstream industrial e-commerce platforms, responsible for product display, customer consultation and pre-sales communication; the studio’s legal representative is a low-income temporary worker with no actual control over business decisions.
The whole infringement operation was controlled by one natural person who held no legal representative or shareholder position in any of the three shell entities. From February 2024 to April 2025, the three shell companies coordinated to manufacture, sell and promise to sell stirring equipment that fully reproduced all technical features of the plaintiff’s utility model patent. Blue Ocean Trading uniformly received all sales revenue and transferred most profits to the actual controller’s personal private account, leaving only small fixed processing fees to Green Factory and Silver Star Studio to create the illusion of independent decentralized operation.
Blue Ocean Trading, Green Factory and Silver Star Studio all submitted separate defense arguments in court. Each shell entity claimed it only undertook a single link of the industrial chain and did not participate in the overall infringement planning. Blue Ocean Trading stated it only engaged in order transfer without product manufacturing; Green Factory argued it only accepted passive processing orders without independent sales behavior; Silver Star Studio claimed it only provided information display services and had no right to decide product production or pricing. All three defendants requested the court to divide infringement liabilities according to their respective business links and exempt each other from joint compensation obligations.
The court conducted a comprehensive review of bank transaction records, platform operation background data, factory surveillance video, internal chat records between the actual controller and each shell’s staff, and notarized purchase evidence submitted by the plaintiff, and confirmed multiple key factual points: First, all product design drawings, production parameter standards, online product pricing and promotional copy were uniformly formulated by the hidden actual controller and distributed to three shell entities; no single shell company independently made any business decision related to infringing products. Second, the profit distribution model was fully controlled by the actual controller: all customer payments flowed into Blue Ocean Trading’s corporate account first, then more than 85% of the total sales profit was transferred to the actual controller’s personal bank card, and only less than 15% of the total revenue was allocated to Green Factory and Silver Star Studio as fixed labor costs, without profit sharing based on sales volume. Third, the three shell entities had no independent ability to operate the complete industrial chain alone. Without coordinated cooperation among the three parties, the manufacturing, sales and online display of infringing products could not be completed. The establishment of multiple separate shell companies was a deliberate arrangement to split legal subjects, isolate assets and evade infringement compensation liabilities.Based on the above complete evidence chain, the court made a key judicial finding: The three shell companies are essentially different functional tools controlled by the same actual controller to implement patent infringement. Their coordinated production and sales actions constitute joint patent infringement. The court shall apply the doctrine of piercing the corporate veil to identify the hidden actual controller and all three shell entities as joint and several liable subjects for all infringement damages.
The three shell defendants jointly put forward the technical feature difference defense, claiming that the stirring cylinder produced by Green Factory had different scraper installation angles and cylinder wall thickness compared with the patent technical scheme, and did not fully reproduce all technical features of the patent right claim 1, so it did not constitute infringement.
The court entrusted a professional intellectual property appraisal institution to conduct a technical comparison appraisal of the plaintiff’s patent drawings and the sealed infringing stirring equipment purchased by notarization. The appraisal conclusion confirmed that all essential technical features recorded in claim 1 of the plaintiff’s utility model patent were completely covered by the structure of the accused product. The minor differences in scraper angle and cylinder wall thickness proposed by the defendants belonged to insignificant equivalent replacement technical features, which could not avoid the identification of patent infringement under the patent infringement equivalent judgment standard. The court ultimately ruled that the accused product fully fell within the protection scope of the plaintiff’s utility model patent and constituted manufacturing, selling and promising sales infringement.
Combined with the sustained infringement cycle of more than 14 months, the defendant’s subjective malicious act of setting up multi-layer shell companies to evade liability, the large sales volume of infringing products, and the plaintiff’s reasonable rights protection expenses including patent appraisal fees, notarization fees, attorney fees and product sealing preservation fees, the court issued the following formal judgment:
1. Blue Ocean Trading Co., Ltd., Green Factory Processing Workshop, Silver Star E-commerce Studio and the hidden actual controller shall immediately stop all acts of manufacturing, selling and promising to sell products infringing the plaintiff’s utility model patent, and destroy all inventory infringing products and special production molds within 10 working days after the judgment takes effect.
2. All four liable subjects shall bear joint and several liability to compensate Bright Tech Equipment Co., Ltd. for economic losses of RMB 620,000 and reasonable rights protection expenses of RMB 98,000, with a total compensation amount of RMB 718,000.
3. The judgment document clearly issued judicial guidance for similar intellectual property cases: Enterprises or natural persons shall not set up multiple shell companies without independent complete business capacity to split infringement responsibilities and transfer operating profits to hide actual control relations. When the court finds that multiple corporate subjects are only tools for the actual controller to implement infringement, the court shall pierce the corporate veil, identify all related shell entities and the actual controller as joint infringers, and order joint and several compensation for all infringement losses.
1. China National Intellectual Property Administration Official Patent Typical Cases Library: https://www.cnipa.gov.cn/art/2026/4/26/art_3668_19.html国家知识产...
2. Supreme People’s Court Intellectual Property Court Official Case Inquiry Platform: https://ipc.court.gov.cn/最高人民法...
3. China Judgments Online Official Full Text Judgment Retrieval System: https://wenshu.court.gov.cn/法律快车
4. Jiangsu Higher People’s Court Intellectual Property Judicial Protection Typical Cases Release Page: https://jsfy.jscourt.gov.cn/col/col1008/index.html
