CARKU won the final ruling of “337 investigation”，How can enterprises respond to 337 investigation?
China — On August 29, 2022, ITC judge issued final judgment that CARKU won the US “337 investigation”.The NOCO Company in the United States doesn’t meet the requirements of the US technology industry, and CARKU doesn’t infringe on the 024 patent.In other words, CARKU’s products are not infringing.
Behind the seemingly simple “final ruling victory”, there is a crisis that many companies are not aware of. In this article, we will explain the circumstances of CARKU’s “337 investigation”.
✦PART ONE ✦
“337 Investigation”: A Crisis Often Overlooked by Export Companies
337 investigation refers to the investigation conducted by the U.S. International Trade Commission (ITC) in accordance with Section 337 of the U.S. Tariff Act of 1930 and related amendments regarding illegal and unfair competition in the US market. Once the company loses the lawsuit, it will pay high lawyer fees, or the product will be withdrew from the US market forever.
Shenzhen Carku Technology Co., Ltd.(hereinafter referred to as “CARKU”), was founded in 2011, which is a professional supplier of emergency jump starter for multi-function vehicles. CARKU is the inventor of the emergency jump starter for lithium-ion vehicles. In the process of global sales, its automotive emergency jump starter products have occupied about one-fifth of the global share with high quality and advanced technology.
According to CARKU, the NOCO Company sought for cooperation with CARKU in early 2014 and made a trip from the United States to visit CARKU headquarters in Shenzhen. After NOCO obtained samples and technology from CARKU Company, NOCO applied for U.S. Patent No. 9,007,015 (“the ’015 patent”) and U.S. Patent 10,604,024 (“the ’024 patent”) in July 2014.
CARKU believes that the purpose of this move by the NOCO Company was to prevent competitors from entering the US market, but NOCO’s target is not only CARKU, but also nearly 110 companies that produce jump starter.
According to the report, the NOCO company in the U.S. filed a complaint at the U.S. International Trade Commission (USITC) in Washington DC requesting for a Section 337 investigation on the jump starter industry for patent infringement of NOCO patents. The investigation, ITC-337-TA-1256, involves two NOCO patents of the same patent family, U.S. 9,007,015 (“the ‘015 patent”) and U.S. 10,604,024 (“the ‘024 patent”). The scale of the 337 investigation is very large, involving more than 110 domestic and foreign companies, creating the single case with the largest number of companies involved in the history of 337.
However, NOCO withdrew the charge against 66 companies before the ITC instituted the investigation in March of 2021.Since then, the ITC investigation has involved 44 companies, including CARKU.
In the face of high litigation costs and cumbersome litigation procedures, most companies with insufficient funds or weak awareness of IPR protection will choose to give up participating in the “337 investigation”, which will bring the risk of absenteeism to the enterprise–Forced to withdraw from the US market.
According to historical data, the probability of responding Chinese companies to be finally found to be non-infringing in the 337 investigation is only about 5.2%.
Historical data shows that from 2012-2021, there were 599 ITC-337 cases, of which 558 Chinese companies were accused, accounting for 93%, and 29 Chinese companies were found to be non-infringing, with a non-infringing win rate of only 5.2%.
In this context, CARKU still decided to actively respond to this “337 investigation”. CARKU believes that winning the lawsuit is not only of great significance to CARKU, but also to actively play the role of an industry leader, which can encourage more enterprises to be brave and take up legal weapons for property rights protection.
✦PART TWO ✦
CARKU takes on the challenge with confidence because of its strength
In order to regulate the development of the industry, prevent NOCO from monopolizing the industry, and stimulate enterprises to attach importance to and protect intellectual property rights, Charles LEI, President of CARKU, contacted lawyers Bing Ai and Kevin Patariu of Perkins Coie LLP for the first time to actively respond to the lawsuit, even at the cost of millions of dollars and took 20 months to mediate and entangle with NOCO, and finally launched a strong counterattack against NOCO in the US. It was not only confidence but also strategy that allowed CARKU to win the final ruling.
CARKU was aware of the importance of intellectual property rights even before NOCO launched its 337 investigation in the United States.
Although it is difficult to obtain evidence that NOCO has plagiarized the technology of CARKU through cooperation, but according to the investigation, NOCO has significant problems in the patent application process. After learning that NOCO applied for the 015 patent, the CARKU intellectual property team responded quickly and launched an Inter Partes Review (IPR) administrative trial proceeding challenging the validity of NOCO’s 015 patent in the US Patent Trial and Appeal Board (PTAB) in May 2020. In November of 2021, CARKU successfully obtained the final written decision from the PTAB that 22 claims of the 015 patent are invalid.
This invalid ruling made NOCO subsequently withdrew its assertion of patent infringement of the 015 patent in the 337 investigation.
Unite the strength of enterprises and form an enterprise alliance
CARKU invited 13 companies involved in this 337 investigation to form the Car Jump Starter Enterprise Alliance, to play the role of industry leaders, share information, help each other, jointly respond to the 337 investigation, and help some small and micro enterprises avoid the need for manpower and capital risk of insufficiency.
The enterprise alliance has got the help of Guangdong Overseas Intellectual Property Protection Promotion Association(GDOIP) and other units, and received suggestions and guidance from GDOIP, contributing to the final victory of CARKU and the resolution of the industry crisis.
Strong technical R&D strength
The final victory of CARKU in the 337 investigation, can not be separated from the enterprise’s attention to technology research and development. CARKU has been in the car jump starter industry for 11 years and has never lowered its emphasis on technology research and development. CARKU invests tens of millions of dollars in research and development each year to set up a first-class R&D lab, and has obtained 429 global patents since its establishment. Recently, CARKU launched another new product around lithium battery technology development – CARKU portable power station, which can be widely used in self-driving travel, outdoor camping, photography and aerial photography, rescue and disaster relief, power outage emergency, medical rescue, outdoor work and other fields.
CARKU has been honored as Specialized, Special and New “Little Giant” Enterprise, National High Tech Enterprise, etc. and has been interviewed by CCTV, Shenzhen TV and Guangdong TV. It is undeniable that CARKU has delivered a satisfactory “ten-year answer sheet” in technology development.
The ITC judge made an Initial determination on April 29, 2022 that NOCO’s 024 patent doesn’t meet the requirements of the domestic technology industry, and CARKU does not infringe on the 024 patent, that is, CARKU’s products are not infringing, while the products of some companies whose investigations were launched at the same time were identified by the ITC as product infringement. On August 29, 2022, the ITC judge issues final judgment which maintains the conclusion of the initial decision.
CARKU’s victory of this “337 investigation” proves that enterprises must have strong technical research and development strength and a complete enterprise intellectual property protection network in order to escort the development of enterprises.
This phenomenon also brings a warning to the purchaser to be cautious when choosing a cooperative supplier and pay attention to the property rights of the partner.
In addition to obtaining the favorable final determination at the USTIC, a German court also determined that Carku’s products accused by NOCO for patent infringement do not infringe NOCO’s asserted German patent. Furthermore, Carku also launched forceful defenses and counterattacks against NOCO in other courts in United States, Canada, United Kingdom, Germany, and China.
✦PART THREE ✦
Shenzhen Carku Technology Co., Ltd. is a high-tech enterprise specializing in the research and development, production and sales of lithium battery technology application products, a specialized, special and new “Little Giant” Enterprise，and the drafting unit of the industry standard for Car Jump Starter.
CARKU’s business has expanded to more than 50 countries on 6 continents around the world, its markets are mainly concentrated in the United States and Europe. Therefore in 2021 NOCO launched the 337 investigation (ITC-337-TA-1256) in the US International Trade Commission (ITC) against the jump starter industry, aiming to suppress CARKU.
CARKU actively responded and provided abundant evidence, expert testimonies and other significant materials refuting NOCO’s allegations. After exchange of motions and evidence，the ITC judge made an Initial determination on April 29, 2022 finding that accused CARKU emergency car jump starter products do not infringe NOCO’s patent.
On August 29, 2022, ITC judge issues final judgment which maintains the conclusion of the initial decision. This case was rated as one of the top ten work highlights by Shenzhen Intellectual Property Center, and it has great reference significance for Chinese enterprises.
Company Name: Shenzhen Carku Technology Co.,Ltd
Contact Person: Jony Chan