May 24, 2012


Xinfu Pharmaceutical awarded compensation for trade secrets violation lawsuit


Zhejiang Hangzhou Xinfu Pharmaceutical Co Ltd (Xinfu), one of the world's largest producer of vitamin B5 products, has been awarded compensation in its lawsuit against Jiang Hongmei, Ma Jifeng and Xinfa Pharmaceutical Co., Ltd for violating its trade secrets.

Xinfu filed the lawsuit at the Hangzhou Intermediate People's Court in Zhejiang province on January 6, 2010 for violation of the company's trade secrets and received the civil judgment on May 21.

In the judgement, Xinfa Pharmaceutical has been ordered to stop its violation of trade secrets of Xinfu. The area of violation includes Xinfu's microbiological method of producing D-calcium pantothenate, production methods, technical information including handling of special circumstances, and the technical information from the production flowchart of 5000T calcium pantothenate.

Secondly, the three defendants - Jiang Hongmei, Ma Jifeng and Xinfa Pharmaceutical Co., Ltd are to make compensation of RMB31,557,903.87 (US$497,5703) to Zhejiang Hangzhou Xinfu Pharmaceutical for its economic loss and another RMB100,000 (US$157,66.90) as reasonable expenses. The compensation will be the shared responsibility of the three defendants.

Thirdly, the other claims by the plaintiff are rejected.

In the case where the three defendants fail to make the compensation as stated in the judgement, they are to pay the interest for the late compensation. The administrative court fee is RMB226,092 (US$35,683), of which Xinfu will be responsible for RMB15,950 (US$2,517). The remaining amount is to be shared among the three defendants.

With the judgment, the company's current or future profits may increase by RMB31 million (US$4.9 million), and the company's future production and management would improve. However, should the defendant make a successful appeal within 15 days of the judgement, the impact on the current or future profits of the company is unknown.