Two customers examine educational products made by Shenzhen-based Noah Education Holding Ltd at a department store in Beijing. Noah, the country's leading provider of digital learning devices (DLD), has lost the first round of a patent-violation lawsuit filed by Shenzhen-based Vanhon Information and Technology Development Co. Asianewsphoto

A TV ad for the latest educational product made by Shenzhen-based Noah Education Holding Ltd promises that "Touching the words on the screen of a Noah digital-and-pronouncing learning devices, it will perform the pronunciation of the words".

However, as a growing number of Chinese pupils enjoy such hi-tech digital learning devices (DLD), Noah, the country's leading DLD provider, has been involved in a patent-violation lawsuit.

Late last month, Noah Education Holding Ltd, together with its sales agency, lost the first round of a lawsuit filed by Shenzhen-based Vanhon Information and Technology Development Co.

Noah was accused of pirating Vanhon's patent of its digital-and-pronouncing learning equipment. Following the judgment in Shenzhen Intermediate People's Court, Noah was required to stop manufacturing and selling its NP12 DLD products, and to pay 500,000 yuan to Vanhon.

According to Vanhon lawyer Huang Wei, the company developed the technology of the digital-and-pronouncing learning device in 2001. And in 2005, Vanhon obtained a patent for the pronouncing DLD product from the National Intellectual Property Office.

As demand for hi-tech education products has grown in recent years, a large number of Chinese IT companies have pirated Vanhon's pronouncing DLDs and sold them across the country without considering intellectual property protection, the company claims.

"In the recent two years, we did a lot of negotiation with violating companies, urging them to stop the piracy," said a spokeswoman from Vanhon, surnamed Li.

She added that the driving force that made Vanhon finally file a lawsuit to fight patent piracy in 2007 was Noah's large-scale branding campaign through the TV advertisements, which helped Noah's DLD products win public attention and contributed in good measure to Noah's impressive sales revenue.

In response, Noah announced that compared with Vanhon's DLD products, Noah's NP12 DLD products contain additional and unique functions.

"So we will insist in fighting with Vanhon and will not stop manufacturing our products," a lawyer from Noah, surnamed Liu, was quoted as saying by China Intellectual Property News.

The recent lawsuit between Vanhon and Noah is not the first time that Noah Education Holding Ltd has been involved in a patent dispute.

In March 2008, a Beijing-based online e-book providing platform, ChineseAll.com, filed a lawsuit alleging that Noahedu.com (Noah's online learning materials platform) illegally provided links for its users to download learning materials.

In that case, Beijing Haidian District People's Court issued a judgment against Noah and the company was required to pay 840,000 yuan in compensation to ChineseAll.com.

In July 2007, Beijing Renai Education Research Institute twice filed lawsuits against Noah for pirating Ren'ai's online learning materials. Noah also lost those two lawsuits, and paid 160,000 yuan and 150,000 yuan, respectively, to Ren'ai as compensation.

Li Shunde, deputy director of the Intellectual Property Right Researching Center of China Academy of Social Sciences, said the country's huge potential in education-related business was the major driving force for the growing number of patent piracy cases.

The three lawsuits related to Noah Education are the best examples of this phenomenon, Li said.

Industry insiders estimate that the market volume of digital learning equipment in China will reach 57 billion yuan in the coming years, according to a Guangdong-based newspaper.

"So we have to make great efforts in China's anti-piracy works in the digital learning products market," Li said.

On the other hand, "although it is important to encourage domestic companies to use legal tools for protecting their intellectual property rights, I still think that to local firms, especially for the small and medium-sized firms, to deepen negotiation and cooperation in the IPR field is a more effective way when facing patent disputes," Li added.

(China Daily 04/20/2009 page11)