This civil patent dispute was heard by the Ningbo Intellectual Property Court. It focuses on utility model patent infringement involving cross-border supply chain merchants, a typical dispute frequently occurring among Chinese manufacturers and 1688 wholesale sellers. All real enterprise names are replaced with aliases as requested: the patentee is Horizon Hardware Technology Co., Ltd., and the respondent infringer is Summit Trading Firm. The case clarifies the application of the doctrine of equivalents under the current Chinese Patent Law and delivers practical guidance for factories engaged in OEM production and domestic wholesale e-commerce.
Horizon Hardware Technology Co., Ltd. is a manufacturer focusing on household storage supplies. The company filed an application for a utility model patent named “a detachable multi-layer storage rack” in March 2023, and obtained official patent authorization in September 2023. The enterprise has continuously paid annual fees to maintain the validity of the patent and applied to the China National Intellectual Property Administration for a patent evaluation report. The evaluation report confirmed that no prior art could completely cover all technical features of the patent, and the stability of the patent right was preliminarily verified. The patented product adopts an innovative combined connection structure, solving the problem of unstable assembly of traditional household storage racks, and the product is supplied to cross-border e-commerce sellers for overseas sales.
In early 2025, the intellectual property team of Horizon Hardware conducted market monitoring and found that Summit Trading Firm operated multiple wholesale stores on China’s 1688 platform. The firm publicly sold smart storage racks with nearly identical internal connection structures at low prices. Through notarized purchase and technical disassembly, the plaintiff confirmed that the core assembly structure of the accused infringing product adopted basically the same technical means, achieving equivalent technical effects. Summit Trading only carried out minor adjustments on the surface decoration panels and adjusted the number of single-layer partitions, claiming such modification could avoid patent infringement.
The patentee first issued a cease-and-desist letter and initiated platform complaint procedures, demanding Summit Trading remove all commodity links, stop sales and promised sales activities, and negotiate compensation for economic losses. Summit Trading Firm put forward two core defenses. First, the company claimed it sourced all goods from an unknown factory and could provide purchase invoices, so it should enjoy the lawful source defense stipulated by the Patent Law. Second, the respondent argued that the difference in the number of partitions and decorative panels constituted obvious technical differences, and the product failed to fall within the protection scope of the utility model patent.
Negotiations completely broke down. Horizon Hardware filed a lawsuit with the Ningbo Intellectual Property Court, requesting the court to order Summit Trading Firm to immediately cease selling and promising to sell infringing products, destroy all existing infringing inventory, and compensate economic losses plus reasonable rights protection expenses including notarization fees, technical appraisal fees and attorney fees.
During the trial, the core controversy focused on two legal issues. First, whether the accused product implemented all essential technical features of the patent, or met the standard of the doctrine of equivalents. The court adopted the all technical feature comparison method, the basic judgment rule for utility model patent infringement in China. Professional technical investigators compared the patent claims and disassembled samples. The judgment pointed out that surface decorations and partition quantity belong to non-essential additional technical features; the core connecting locking structure remains unchanged. Minor partial adjustment cannot form substantive technical innovation, which conforms to the equivalent feature judgment standard.
Second, the court reviewed the effectiveness of the lawful source defense. According to Article 77 of the Chinese Patent Law, lawful source defense can exempt the seller from compensation liability only if two conditions are satisfied: the seller does not know the goods are infringing, and complete, traceable supply channel evidence can be provided. The judge found that Summit Trading only provided simple invoices without supplier contact information, product drawings and formal supply contracts. As a professional wholesaler of storage hardware products, the enterprise bore higher obligation to conduct intellectual property review. Insufficient source materials meant the lawful source defense could not be supported.
In June 2025, the Ningbo Intellectual Property Court issued the first-instance judgment. The court confirmed that Summit Trading Firm’s acts of sales and offering for sale infringed Horizon Hardware’s utility model patent right. The court ordered the respondent to delete all online commodity links, stop all relevant sales behavior, and pay compensation of RMB 142,000, covering economic losses and all reasonable litigation costs. The infringer did not file an appeal, and the judgment has entered into enforcement procedures.
This case brings important references for industrial merchants. First, enterprises holding utility model patents shall actively apply for a patent evaluation report before litigation, which significantly improves judicial acceptance. Second, partial superficial adjustment cannot bypass patent protection; modification must target core technical structures to avoid infringement risks. Third, wholesale operators cannot rely on incomplete purchase vouchers to claim lawful sources; standardized supplier qualification review and IP risk investigation must be embedded in daily procurement procedures. For domestic factories supplying goods to cross-border platforms, advance patent clearance can effectively prevent large-scale infringement lawsuits.
1. China National Intellectual Property Administration Official Website: https://www.cnipa.gov.cn
2. China Judgments Online Verdict Inquiry Platform: https://wenshu.court.gov.cn
3. Supreme People’s Court IP Court Guidance Documents: https://ipc.court.gov.cn
4. National IP Public Service Platform: https://cip.com.cn
