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The verdict of Goertek v. Minxin is released: stop production immediately!

On June 15, Capital State learned that Minxin Co., Ltd. (688286.SH), a company on the Science and Technology Innovation Board, issued an announcement on the results of the first-instance judgment on litigation matters.

In April 2020, Goertek Co., Ltd. (hereinafter referred to as “Goertek” or the “Plaintiff”) filed a lawsuit with the Qingdao Intermediate People’s Court for the product claims with product codes “MB50R11G”, “HVWA1823” and “MB28H12F” The company and Weicheng Huayang Electronic Technology Center infringed its utility model patent No. 201220626527.1.

The specific claims include: (1) claiming that the company immediately stops infringing the plaintiff’s patent rights, including stopping the manufacture, use, sale, and offering to sell the accused infringing product, and destroying the special molds and equipment used to manufacture the accused infringing product; (2) claiming that Weicheng Huayang electronic Technology Center immediately stopped the infringement of the plaintiff’s patent rights, including stopping sales and promising to sell the accused infringing products; (3) claiming that the company should compensate the plaintiff for economic losses of RMB 10 million; (4) claiming that the company and Weicheng Huayang Yang Electronics Technology Center jointly bears the reasonable expenses of RMB 500,000 for the plaintiff’s rights protection.

Recently, the company received the first-instance civil judgment from the Qingdao Intermediate People’s Court (case number: (2020) Lu 02 Zhi Min Chu No. 65). The first instance verdict is as follows:

1. The defendant, Suzhou Minxin Microelectronics Technology Co., Ltd., immediately stopped the production and sale of the products that infringed the patent number ZL201220626527.1 of the plaintiff Goertek Co., Ltd. and the name “MEMS microphone” utility model patent right from the date when the judgment took effect;

2. The defendant Suzhou Minxin Microelectronics Technology Co., Ltd. should compensate the plaintiff Goertek Co., Ltd. for economic losses and reasonable expenses for rights protection totaling 4 million yuan within ten days from the date when the judgment takes effect;

3. The defendant, Weicheng Huayang Electronic Technology Center, immediately stopped selling the products that infringed the patent right of the plaintiff Goertek Co., Ltd. patent number ZL201220626527.1 and named “MEMS microphone” utility model patent right from the date when the judgment took effect;

4. The other claims of the plaintiff GoerTek Co., Ltd. were rejected.

The first-instance case acceptance fee was 84,800 yuan, 26,248 yuan was borne by the plaintiff Goertek Co., Ltd., and 58,552 yuan was borne by the defendant Suzhou Minxin Microelectronics Technology Co., Ltd.

If the parties disagree with this judgment, the parties may submit an appeal petition to the Qingdao Intermediate People’s Court within 15 days from the date of service of the judgment, and submit a copy according to the number of opposing parties, and appeal to the Supreme People’s Court.

The impact of this lawsuit on the company is as follows:

1. The impact of this lawsuit on the company’s core technology

The company is a semiconductor chip design company that develops and sells MEMS sensors. After years of technology accumulation and R&D investment, the company has core technologies and core technologies in MEMS sensor chip design, ASIC chip design, wafer manufacturing, packaging and testing. Independent research and development capabilities. The patent involved is the utility model patent right of Goertek, which does not involve the company’s core technology. The company focuses on high-speed iteration of product design, packaging and testing technology, process control and other technical fields, and covers microphones, pressure sensors, inertial sensors There are three major areas, which are significantly different from the utility model patent of the microphone structure as the patent involved.

2. The impact of this lawsuit on the company’s research projects

The company’s research projects include “high-performance digital MEMS acoustic sensor ASIC chip”, “micro pressure sensor project”, “three-axis MEMS acceleration application-specific integrated circuit research and development”, etc. There are differences between the research projects and the patents involved. The litigation matters It will not have a material adverse impact on the advancement of the company’s research projects.

3. The impact of this lawsuit on the production and sales of the company’s products

The company’s product codes involved in this lawsuit are “MB50R11G”, “HVWA1823” and “MB28H12F”. According to the above product code statistics, the company’s litigated products were only sold in 2018, 2019, and January to March 2020, and the sales 17,100 pieces, 148,000 pieces and 89,900 pieces respectively (255,100 pieces in total), corresponding to sales revenue of 19,200 yuan, 140,400 yuan and 46,400 yuan respectively Yuan (a total of 206,000 yuan). The products with the above product codes of the company are no longer produced and sold after the lawsuit is involved. In the future, the company may not use the technology corresponding to the product involved in the lawsuit, because the use of the patented technology involved is mainly mature technology that has been disclosed in the era of electret microphones more than 20 years ago. Articles related to MEMS microphones disclose the air intake characteristics of the sound hole. With the popularization of MEMS microphone products,

The protection measures corresponding to the patented technology involved in the lawsuit are no longer needed; the forward sound MEMS microphone products adopted by the company for the same technical purpose have a more advanced foreign body protection structure in the external environment from the wafer stack design, which fundamentally solves the problem. In order to avoid the protection of foreign objects in the external environment, the product design corresponding to the patented technology that affects the acoustic performance of the product is no longer required.

In addition to the patents involved, the company has a variety of different or even more optimized technical ideas to deal with the same technical purpose, and the company’s MEMS microphone product technology iterates rapidly, and the general product model will be upgraded within three years. Iteration, there are significant differences in the structure of the existing main MEMS microphone products and the products involved in the lawsuit, this lawsuit will not have a significant adverse impact on the production and sales of the company’s existing products.

4. The impact of the lawsuit on the company’s financial position

The actual controller of the company and its persons acting in concert have issued a commitment to the company’s patent litigation matters in the company’s “Prospectus for Initial Public Offering and Listing on the Science and Technology Innovation Board”: if the above-mentioned patent litigation eventually results in an adverse outcome to the company, I will bear the responsibility. Compensation or litigation expenses that should be borne by the company as determined by the effective judgment result, and compensate the company for the production and operation losses of the company caused by the above-mentioned patent litigation, so as to avoid any losses suffered by the company and the company’s public shareholders. Therefore, the above judgment result will not have a material adverse impact on the current financial situation of the company.

This judgment is the result of the first-instance judgment. At present, the judgment has not yet come into effect. The company will appeal in accordance with the law as soon as possible. There is still uncertainty about the final result of this patent litigation matter.

In addition to the litigation cases announced this time, the company currently has a number of pending litigation cases and patent invalidation applications. The company will continue to attach great importance to it in the follow-up, and take relevant legal measures to actively respond to the lawsuit and assert its legitimate rights and interests in accordance with the law. Effectively safeguard the interests of the company and all shareholders. At the same time, the company will also fulfill its information disclosure obligations in a timely manner in accordance with the relevant information disclosure regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange. Investors are advised to pay attention to investment risks!