| Synopsis Settlement of IP dispute between On Track Innovations and Smartrac NV |
| Firm |
Client |
Role |
| Orrick, Herrington & Sutcliffe |
On Track Innovations |
International counsel |
| Beijing UniTalen |
On Track Innovations |
PRC counsel |
| Guangdong Guoxin |
On Track Innovations |
PRC counsel |
| Proskauer Rose |
Smartrac NV |
International counsel |
| King & Wood |
Smartrac NV |
PRC counsel |
On Track Innovations (OTI), a leader in contact-less microprocessor-based smart card solutions, has reached a landmark patent settlement agreement with Smartrac, a leading manufacturer and supplier of RFID transponders. This secures OTI’s delivery of products and projects as well as confirming Smartrac as its exclusive supplier for wire-embedded and dual interface inlays.
The case began in August 2007 when OTI filed a patent invalidation before the China Patent Re-examination Board against Smartrac’s Chinese invention patent. Smartrac then filed a customs action and patent infringement suit against OTI’s subsidiary Millennium Card Technology (MCT) in Shenzhen. It was critical for OTI to win this case as MCT is the primary Chinese manufacturing base for OTI smart cards.
The dispute was challenging for Orrick because OTI had no intellectual property in this particular battle to take a counter-action, and had to depend on the success of patent invalidity and non-infringement. “The patent at issue was a Chinese invention patent substantively examined by the China Patent Office, therefore, invalidating such a patent was not an easy task,” said Xiang Wang, partner and head of Orrick’s China IP practice. “Orrick lawyers made a great effort to find prior arts that led to the invalidation of most of the claims – including the claim used by Smartrac to sue OTI in Shenzhen court.”
The success of this claim led to OTI’s ultimate victory over Smartrac. “We believe that the victories in the various Chinese legal actions provided OTI with significant leverage and were, in fact, pivotal to its multi-jurisdiction disputes with Smartrac in China, the US, Germany, Holland and other jurisdictions, which ultimately led to the settlement,” said Wang.
The settlement allows OTI to access Smartrac’s patented technology and secure production network as well as enjoy its high-volume production capacity in Europe.
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