Appeal in Hanwha Q-Cells patent litigation: Penalty payment against Longi Solar and REC confirmed

The Düsseldorf Higher Regional Court, in Germany, has ruled that Longi Solar and REC have to pay a fine because they have not fully complied with the court order to recall their solar modules affected by the patent dispute in Germany.

November 4, 2021 Sandra Enkhardt

Hanwha Q Cells' building in Germany.

Image: Hanwha Q Cells

From pv magazine Germany

South Korea-based photovoltaic manufacturer Hanwha Q Cells has announced in a press release that the Düsseldorf Higher Regional Court, in Germany, has upheld a previous decision taken by the Düsseldorf Regional Court to impose a coercive penalty payment against competitors Longi and REC Solar.

“Despite the Regional Court of Düsseldorf’s judgement of June 16, 2020, in which the ruling stated that the defendants were legally obliged to recall specific solar products that have been considered patent-infringing (and since January 30, 2019, were sold via … distribution channels with respect to commercial customers in Germany), Longi and REC – the Higher Regional Court ruled – failed to fully meet the requirements of the recall obligation,” the Korean company said. “Hence, the regional court’s decision to impose each company … pay a penalty for this failure was justified.”

The amount of penalty payment remains unclear.

The patent dispute between the photovoltaic manufacturers dates back to spring 2019. In March 2019, Hanwha Q-Cells filed a patent infringement lawsuit in both Germany and the United States, and shortly afterward in Australia, against Longi, REC and a third defendent, JinkoSolar. According to the company, its three competitors have illegally used its patented technology in their products. In June 2020, the Regional Court of Düsseldorf, in Germany, ruled in favor of Hanwha Q-Cells in the first instance. REC and Longi Solar appealed against the decision, whereupon Hanwha Q-Cells initiated the preliminary enforcement of the decision. In Hanwha Q-Cells' view, Longi Solar and REC, subsequently, did not take sufficient measures to comply with the court-ordered recall obligation, which is why Hanwha applied for a fine.

“The court emphasized in its decision that the debtor of a recall obligation – both Longi and REC – have to make a serious request to their commercial customers to voluntarily return the infringing product,” Hanwha Q Cells went on to say. “If either Longi or REC, in their recall requests, imply that compliance with the recall request is at the discretion of the customer, the debtors have to clearly inform their customers that they are at risk of being directly held responsible by the patent owner to meet the requirements for the recall obligation.”

The judges also ruled that Longi Solar and REC had to submit copies of all letters sent, or a list of recipients, to Hanwha Q-Cells in order to verify compliance with the recall obligation.

The patent dispute between the manufacturers has, meanwhile, also reached the Netherlands. According to information from Hanwha Q-Cells, a court there imposed upon Longi Netherlands Trading B.V. a requirement to refrain from any activity that constitutes patent infringement in the countries in which Hanwha Solutions Corporation is a registered patent holder. That legal dispute, by which Hanwha Q-Cells wants to prevent the distribution of patent-infringing solar modules in European third-party countries, has been swelling since the summer of 2021. At that time, a court in Rotterdam ordered the seizure of a delivery of Longi solar modules. According to the Chinese photovoltaic manufacturer, that seizure was lifted shortly afterwards.

pv magazine asked Longi Solar and REC for a statement on the decision of the Düsseldorf Higher Regional Court. We will add this as soon as we have it.

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