(Yicai Global) Dec. 9 -- Chinese white goods manufacturer Gree Electric Appliances has been ordered to pay rival Aux Air Conditioning CNY166.6 million (USD26.3 million) for infringing a compressor patent, according to a recent court judgement.

Gree should compensate Ningbo, southeastern Zhejiang province-based Aux in accordance with the patent’s contribution to the profit made from the sales of two air conditioning products that used the patent, according to the Ningbo Intermediate People’s Court of Zhejiang province.

Gree will appeal the decision, the Zhuhai, southern Guangdong province-based firm said yesterday.

Aux claims that two of Gree’s air conditioning products infringed its compressor patent, which it bought from Toshiba Carrier in 2018, and demanded the company stop producing and selling these products.

Aux could do with the extra income if it wins the suit, market analysts said. The firm’s net profit was less than CNY100 million (USD15.7 million) in 2019. Conversely, if Gree has to pay up the compensation would only account for 0.8 percent of its CNY22.2 billion (USD3.5 billion) net profit last year.

Aux and Gree have been at loggerheads for years. Gree was fined CNY10 million two years ago for other alleged patent infringements but the judgement was eventually overruled when it was found that Aux’s patents were invalid.

“Aux was judged by the court to have infringed 26 patents of Gree from 2016 to last year,” Gree said at the time. Aux bought a Japanese patent that was about to expire and filed a lawsuit against Gree for infringement. This goes against the purpose of patent law to protect innovation, it added.

Gree has had the most online sales in the Chinese airconditioner market this year to Dec. 5, with a 31.1 percent share of the market. It was the second-best seller in brick-and-mortar store sales, after Midea Group, while Aux did not feature in the top ten.

Editor: Kim Taylor