China’s top court hands down multimillion-dollar patent and trade-secret awards in chemical cases

China’s Supreme People’s Court (SPC) has highlighted a series of high-value patent and trade-secret cases involving chemical production, including related disputes that resulted in combined awards of more than RMB 200 million.

The cases also illustrate how Chinese courts can reconstruct allegedly infringing chemical production processes from evidence generated around a manufacturing facility, potentially overcoming what practitioners describe as the “process black box” problem.

An analysis published September 29 by Law.asia said that, in January 2026, the Intellectual Property Court of the SPC published details of 73 cases from 2020 to 2025 involving damages awards above RMB 10 million (approximately USD 1.4 million). The cases had combined awards of RMB 5.242 billion. Of those, 32 cases were concluded in 2025, with total compensation of RMB 2.54 billion.

Chemical, materials, and complex industrial-production disputes make up a significant part of the high-value cases highlighted by the analysis.

RMB 218 million in melamine cases

One of the most notable examples involves related patent and trade-secret disputes over technology for producing melamine.

The SPC’s Intellectual Property Court has identified the litigation as involving the same engineering project and awarded a combined RMB 218 million in damages.

In the patent case, Sichuan Golden-elephant Sincerity Chemical Co. Ltd. and Beijing Yejing Technology Co. Ltd. v. Shandong Hualu-Hengsheng Chemical Co. Ltd. et al., the SPC awarded RMB 120 million for infringement of an invention patent covering an energy-saving gas-phase quenching melamine production system and process.

In the related trade-secret case, the court awarded a further RMB 98 million. The SPC said the defendants had jointly committed the infringements and ordered them to pay the relevant losses jointly and severally. It also ordered the destruction of the infringing production system and relevant technical materials.

The underlying technology concerned a pressurized gas-phase quenching process for a 50,000-ton-per-year melamine production system.

The trade-secret judgment is particularly significant because the technical information included equipment selection and information concerning the structure, dimensions, shape, and process parameters of equipment used in the production system. The SPC found that this information played an essential role in constructing and operating the allegedly infringing system.

The patent and trade-secret claims therefore concerned different protected subject matter associated with the same production project.

Reconstructing the “process black box”

Chemical manufacturing disputes can present a particular evidentiary difficulty because the allegedly infringing process takes place inside a production facility and may not be directly observable by the rights holder.

The Law.asia analysis describes an “outside-in” approach in which evidence generated during the development, construction and operation of a chemical plant can help reconstruct the production process. Potential evidence can include environmental-impact assessments, safety assessments, engineering designs, equipment-procurement records, construction documentation, acceptance records, permits, and production-operation records.

In the melamine trade-secret case, for example, the SPC’s published judgment records extensive documentary evidence, including environmental-impact approvals, engineering drawings, piping and instrumentation diagrams, equipment drawings, and operating documentation.

The approach is also illustrated by a separate dispute concerning Cathay Biotech’s long-chain dicarboxylic-acid refining technology. According to Law.asia, the SPC considered publicly available investigation materials from the local ecological-environment authority when assessing whether an allegedly infringing producer had changed its production process after taking over an existing plant and equipment.

RMB 30 million patent award

The Cathay Biotech litigation also produced one of the SPC’s high-value patent awards.

In case No. (2023) Zui Gao Fa Zhi Min Zhong No. 3178, concerning an invention patent for a long-chain dicarboxylic-acid production process, the SPC upheld a RMB 30 million damages award against Shandong Guiyuan, with Shandong Hanlin held jointly and severally liable. The case is expressly listed by the SPC among its punitive-damages cases. The court maintained the RMB 30 million award after finding malicious infringement and serious circumstances.

The SPC’s January 2026 high-value-case list identifies the case as having been concluded on December 31, 2025. A related trade-secret case concerning the same long-chain dicarboxylic-acid technology was also revised on appeal at the end of 2025.

In case No. (2022) Zui Gao Fa Zhi Min Zhong No. 445, Cathay Biotech was awarded RMB 28,874,473.02 against Shandong Hanlin, with certain individuals also made jointly and severally liable for portions of the award. The SPC’s high-value-case list records the award as approximately RMB 28.87 million.

Patent and trade-secret protection can coexist

The cases also provide an illustration of how patent and trade-secret protection can operate alongside each other in relation to complex production technology.

In the melamine litigation, the patent case and trade-secret case produced separate awards because the rights covered different technical subject matter. At the same time, the SPC considered whether other IP claims concerning the same production system could result in overlapping compensation.

The SPC’s published judgment in the trade-secret case records that the rights holder had also brought the related patent proceedings and another patent action concerning the production system. The court considered the periods and subject matter covered by the different claims when assessing the appropriate damages.

This means that the existence of patent protection over part of a production system does not necessarily preclude trade-secret protection for distinct technical information associated with that system. The protected subject matter and the losses attributed to each claim must, however, be distinguished.

High-value and punitive damages

The chemical cases form part of a wider increase in the number of high-value awards identified by the SPC. The court’s January 2026 figures show that its Intellectual Property Court handled 58 cases involving punitive damages between 2020 and 2025, with total compensation of RMB 2.053 billion. Thirty of those cases were concluded in 2025, accounting for RMB 1.13 billion in compensation.

The long-chain dicarboxylic-acid patent case is included in that punitive-damages category. For chemical patent and trade-secret disputes, the cases highlighted by the SPC and Law.asia therefore demonstrate the importance of evidence extending beyond the allegedly infringing process itself.

Production capacity, plant configuration, engineering records, regulatory documentation, equipment, and operating information can collectively help establish how a production system operates and, where appropriate, support calculations concerning the scale and value of infringement.

The resulting awards, including RMB 120 million for the melamine patent infringement, RMB 98 million for the related trade-secret infringement, and RMB 30 million in the long-chain dicarboxylic-acid patent case, demonstrate the potentially substantial financial consequences of infringement involving complex chemical production technology.

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