Shenzhen design company wins 3 million in compensation after patent was counterfeited and preemptively registered! How to defend your rights when intellectual property is infringed?

An industrial design company in Nanshan, Shenzhen, spent over six months developing a new product. Just one month after its launch, a factory in Longhua copied the design and set up molds for mass production. What's more infuriating is that the other party even applied for a design patent first and then filed a complaint against the original company for infringement. When the person in charge came to the law firm, their first words were: "How did my design become their patent?"
Business owners have more or less encountered this scenario: trademarks being squatted, patents being infringed, and core technical staff leaving with blueprints. Intellectual property cases in Shenzhen have been growing 15% annually in recent years, with the maximum compensation awarded reaching 5 million yuan. The money is one thing; what really hurts is losing market share, having products pulled from shelves, and seeing IPO plans disrupted.

There is a chance, but it depends on timing and evidence. According to Article 32 of the Trademark Law, an application for trademark registration shall not prejudice the existing prior rights of others, nor may it, by unfair means, preemptively register a trademark that another person has already used and that has gained certain influence.
If you can prove that you had been continuously using the mark and had accumulated a certain level of influence before the other party's filing date—such as through sales contracts, advertising records, exhibition photos, or customer orders—you can file for invalidation or opposition with the National Intellectual Property Administration. A company in Shenzhen successfully reclaimed its trademark in the 11th month after it was preemptively registered, relying on a stack of shipping waybills and WeChat chat records, and the whole process took about 8 months. The key is that the evidence must form a coherent chain; a single invoice or a single photo carries very weak evidentiary weight.
It depends on how you assert your claim and whether the evidence is solid enough. According to Article 65 of the Patent Law, the amount of compensation shall be determined based on the actual losses suffered by the right holder as a result of the infringement; if the actual losses are difficult to determine, it may be determined based on the profits gained by the infringer from the infringement. If both of these are difficult to determine, the court may, in light of the type of patent, the nature and circumstances of the infringement, award discretionary compensation ranging from 30,000 yuan to 5,000,000 yuan.
Zhiming Law Firm once represented a Futian design company in pursuing compensation for patent infringement. The infringing party had simultaneously operated mold factories in both Shenzhen and Dongguan, and their counterfeit products had been distributed to over 200 dealerships nationwide. We helped the client organize three years of sales decline data, purchase records from each dealer, and the pricing system for the infringing products. In the end, the court fully supported the 3 million yuan compensation claim and also ordered the opposing party to destroy their inventory molds and issue a public apology. This 3 million was not merely compensation—more importantly, it completely destroyed the opposing party's credibility within the industry.
This situation is very common in Shenzhen tech companies. The most frequent problem is "we know he did it, but we can't produce evidence." It is recommended to do three things immediately: seal off the employee's computer and work email records, retrieve the access control attendance records and exit handover forms, and conduct an infringement comparison of the technical solutions he is using at the new company.
Legally, the primary basis is Article 9 of the Anti-Unfair Competition Law: business operators shall not engage in acts that infringe upon trade secrets, including obtaining trade secrets of the right holder by theft, bribery, fraud, coercion, electronic intrusion, or other improper means. The key question is whether the company has adopted confidentiality measures for its technical information, such as confidentiality agreements, non-compete clauses, restricted area signage, and encrypted access permissions. Without these, it is difficult for courts to find that a "trade secret" exists. In Shenzhen, a company that failed to sign a confidentiality agreement saw its core technology taken by a departing employee. It sued for RMB 5.3 million in compensation but ultimately recovered only RMB 300,000, with the gap lying in the incomplete evidentiary chain.
Intellectual property cases in Shenzhen under ordinary procedures take approximately 6 to 12 months for first instance and 3 to 6 months for second instance. Including property preservation, evidence preservation, and appraisal, the overall cycle starts at around one year. However, there is a more efficient approach — applying to the court for behavioral preservation, i.e., an injunction, before filing the lawsuit, requiring the opposing party to immediately cease the production and sale of the allegedly infringing products.
Shen Jinlong, director of Guangdong Zhiming Law Firm, has practiced law for 26 years and has led his team in handling over 10,000 cases. He has a complete strategy for intellectual property rights enforcement: first assessing the probability of winning and the compensation range, then designing an evidence collection plan. When a lawyer's letter is necessary, the wording of the letter and the order of recipients are carefully considered, so as not to scare off the opposing party and prompt them to destroy evidence upfront. Many business owners in Shenzhen have chosen a strategy of negotiating before litigating, or litigating while negotiating, which both protects their market and secures reasonable compensation.
Businesses should establish trademark registration, patent strategy, and confidentiality systems as part of their daily operations. Waiting until infringement occurs to seek legal help means greater time costs and opportunity costs. If you are currently dealing with trademark squatting, patent infringement, or technology leakage issues, you can visit Guangdong Zhiming Law Firm for an in-person consultation. The address is Room 1802, Building A, Xintian Century Business Center, Beier Street, Shixia, Futian District, Shenzhen. Phone: 0755-25986969. For complex cases, bring your materials and deadlines, and the lawyers will help you evaluate which approach offers the best cost-effectiveness.