Hypertherm Associates has achieved a significant legal victory in China’s Superior Court against Changzhou Termmei (TRM), a leading Chinese aftermarket consumable manufacturer. After a five-year legal battle, the court issued a definitive ruling in favor of Hypertherm Associates, ordering TRM to pay a substantial settlement for infringing on two of Hypertherm Associates’ patents.
Hypertherm Associates, a U.S.-based manufacturer renowned for its industrial cutting products and software, serves a global clientele. Its lineup, which includes Hypertherm plasma and OMAX waterjet systems, finds applications in diverse industries, from shipbuilding, aviation, and railcar manufacturing to steel construction, heavy equipment fabrication, and wind turbine installation.
Beyond cutting-edge systems, Hypertherm also offers CNCs, and software known for their performance and reliability, delivering heightened productivity and profitability for countless businesses. Established in 1968, the company stands out as a 100% Associate-owned enterprise, boasting a workforce of around 2,000 Associates and a global presence through its operations and partner network.
The patents in question are related to the Duramax Electrode and PowerPierce XD shield, and the infringement occurred between 2017 and 2019. Initially, the Suzhou IP Court awarded Hypertherm Associates a modest damages sum, which the company contested through an appeal. The appeal resulted in a remarkable 950% increase in damages awarded to Hypertherm Associates.
This victory has enabled Hypertherm Associates to recover several million RMB in profits that TRM obtained through its infringing activities, marking the largest damages award ever secured by Hypertherm Associates in China. TRM, a prominent manufacturer of aftermarket consumables for Hypertherm plasma machines, has been embroiled in a patent infringement dispute since 2011.
Despite numerous warnings from Hypertherm Associates, the company continued to produce and sell patent-infringing products, which were widely used by trading companies both within and outside China. TRM’s aftermarket consumables became the industry standard for many sellers, exerting significant influence in the market. In 2022, Hypertherm Associates uncovered crucial evidence indicating TRM’s intent to go public.
This evidence, found just before the initial court hearing, was submitted to the Chinese court overseeing the case. TRM had included financial details, including revenue from aftermarket consumable sales, in its IPO prospectus. However, TRM’s IPO application was rejected in 2023 due to its inadequate research and development (R&D) budget, which fell below government requirements.
Additionally, its annual revenue and growth rate did not meet the necessary standards. Despite efforts by the court to encourage a settlement between the two parties, TRM remained adamant, refusing to cease infringement or pay damages for years of patent violation. In December 2023, a court issued its final ruling in favor of Hypertherm Associates, awarding them a significant sum in damages.
This ruling stands as a strong message to other aftermarket manufacturers that Hypertherm Associates is committed to protecting its intellectual property (IP) assets globally and will not tolerate any violations. Brett Hansen, the Director of Intellectual Property at Hypertherm Associates, stated, “We invest substantial resources in developing technologically advanced cutting systems and consumables.”
He added, “Our decision to pursue legal action stems from our concern for our customers and their businesses.” Hansen emphasized that the counterfeit consumables lack the decades of experience and knowledge that Hypertherm puts into its products. He expressed satisfaction that their efforts and patents are recognized and upheld by the Chinese government.
