(Yicai Global) July 19 -- With their dispute over air conditioning compressor patents seeing no end, Gree Electric Appliances recently took Chinese rival Aux Group to court for alleged infringement of commercial secrets, claiming CNY99 million (USD13.7 million) in damages.

The Guangzhou Intellectual Property Court has accepted the lawsuit filed by the Zhuhai-based appliance maker, the People’s Court announcement site disclosed recently.

As plaintiff, Gree has demanded that the seven defendants -- Aux, one of its subsidiaries, and five natural persons, including Gu Tangtang -- immediately stop infringing its commercial secrets. The company has asked the court to order Aux to transfer the ownerships of eight of its patents to Gree and compensate it CNY99 million for economic losses.

According to publicly available information, the five natural persons, including Gu, Wu Qingzhuang, and Huang Jiabai, are inventors of air con-related patents, with Aux registered as the owner.

It is relatively rare to see requests of patent ownership transfers in trade secret disputes, Securities Times reported today, citing Zhang Liang, director of Beijing Yunjia Law Firm. He said Gree may not have published evidence to prove that it used the patents first. So it can only sue on the grounds of trade secrets dispute.

Gu attended a roundtable symposium in December 2020 as vice president of Aux, information disclosed on the firm’s website showed.

About 50 researchers and developers led by Gu worked in Gree’s research and development department, the media reported in 2019. And all of them were poached by Aux with higher salaries when Dong Mingzhu succeeded Zhu Jianghong as Gree chairman.

Aux responded at the time that the 50 Gree personnel brought in never had any labor arbitration with their former employer on non-competition clauses. The firm had hired them through normal recruitment channels, the Ningbo-based company added.

Patent disputes between Aux and Gree have continued, with the row over air con compressors drawing most attention. The case began in December 2018, when Aux acquired the compressor patents from Japan’s Toshiba and later sued Gree for rights infringements.

Last August, a Hangzhou court ordered Gree to compensate Aux to the tune of about CNY55 million in a first-instance verdict. Together with the judgment rendered by a Ningbo court, Aux received total compensation of more than CNY220 million (USD30.5 million).

At present, Gree has refused to accept all verdicts in the case, while Aux is not satisfied with one of the judgments and has filed an appeal. The latest development is that the Supreme People’s Court held a public hearing on this series of disputes in April.

Editor: Peter Thomas