by Kira Xia
Recently, the Intellectual Property Court of the Supreme People's Court received a plaque of appreciation from NetEase Youdao Information Technology (Beijing) Co., Ltd. (hereinafter referred to as NetEase Youdao) and iFlytek Co., Ltd. (hereinafter referred to as iFlytek), marking the end of their four-year-long patent dispute.
The Beginning and Development of the Dispute: Four Years of Patent Defense
NetEase Youdao and iFlytek are both leading enterprises in the AI education sector, with intense competition in the translation pen market. Since 2017, NetEase Youdao has developed a series of translation pens, launching four generations of products and obtaining several design patents.
In February 2021, NetEase Youdao filed a lawsuit against iFlytek, accusing them of infringing on the design patent (hereinafter referred to as the disputed patent) for the third-generation translation pen.
The core dispute focused on the "protection of the iterative product design," a legal gray area—current intellectual property laws lack clear provisions for protecting products that are continuously updated.
The Judicial Battle:
First Instance Judgment: The Beijing Intellectual Property Court ruled in the first instance that iFlytek had infringed the patent, ordering a compensation of over 5 million yuan.
Appeal and Counterattack: Dissatisfied with the ruling, iFlytek appealed to the Beijing Higher People's Court. In April 2021, iFlytek also filed a petition for a patent invalidation declaration, citing the design of NetEase Youdao's first and second-generation products as comparative designs.
Patent Invalidity Dispute: the CNIPA upheld the validity of the disputed patent, but iFlytek disagreed and filed an administrative lawsuit In the Beijing Intellectual Property Court, who ruled to revoke the decision of CNIPA, and NetEase Youdao subsequently appealed to the Intellectual Property Court of the Supreme People's Court.
At this point, the case had become entangled in a complex situation involving civil lawsuits, patent invalidation petition, and administrative litigation.
Breaking the Deadlock: Prioritizing Mediation to Resolve Patent Disputes
Tracing Technology Origins to Identify Mediation Opportunities: The collegiate panel systematically reviewed the evolution of four generations of translation pen designs, compared existing design features in the market, and analyzed relevant legal issues, concluding that mediation was the optimal solution.
Clarifying Legal Principles to Facilitate Settlement Intentions: A dual-track negotiation approach was adopted, addressing both civil compensation and patent validity review simultaneously. Starting from the interests of both parties, providing legal insights and encouraging a return to rational competition.
Multiple Rounds of Negotiations Leading to a Settlement Agreement: After eight months of mediation, both parties reached a comprehensive settlement, withdrawing all related lawsuits and putting an end to the four-year-long dispute.
Industry Insights: Strengthening IP Protection and Promoting Fair Competition
Prioritizing Mediation: Litigation is not the only way to resolve patent disputes. This case demonstrated that judicial mediation provides an efficient and cost-effective dispute resolution mechanism, helping enterprises avoid prolonged legal battles while maintaining market order and fostering industry development.
Improving Legislation: The case highlighted a legal gap in protecting the design patents of iterative products, prompting discussions on legislative and judicial improvements. In response, NPC deputy Zhou Di proposed a motion at this year's National People's Congress to strengthen design patent protection for iterative products.
Enhancing Corporate IP Strategy: Companies should establish comprehensive IP management systems, strategically plan patent applications, and build stronger patent barriers during product iteration. Shifting from passive rights defense to proactive protection can help enhance market competitiveness and industry influence.
Conclusion: The Delicate Balance Between Patent Protection and Innovation
This four-year patent battle was not only a legal contest between two companies but also a profound reflection on the balance between intellectual property protection and innovation across the industry.
As technological iteration accelerates, the pressing challenge lies in effectively safeguarding innovation while ensuring that legal frameworks keep pace with rapidly evolving market dynamics.
This successful mediation not only resolved the patent dispute between the companies but also provided a valuable precedent for handling similar cases in the future, fostering fair competition and sustainable industry growth.