*AI-generated translation, for reference only.

[Basic Facts]

N [REDACTED] Company, a European company, is one of the world's leading providers of professional computer numerical control (CNC) systems. The N Computer Software, a comprehensive software developed by N [REDACTED] Company, is used for producing and re-sharpening precision tools. Having obtained a computer software copyright registration certificate in China, N [REDACTED] Company is the copyright owner of the N Computer Software. In 2021, N [REDACTED] Company filed a lawsuit alleging that JIA Grinding Machine Co., Ltd. had, without permission, installed the N Computer Software on the machine tools it manufactured, and YI Precision Tools Technology Co., Ltd. used the machine tools produced by JIA Grinding Machine Company containing the infringing software for its production and operation. N [REDACTED] Company claimed that the former was the producer and the latter was the user of the infringing products, and requested the court to order the two defendants to immediately cease infringement and bear joint and several liability for economic losses of 5 million yuan and reasonable expenses for enforcing rights of 172,000 yuan. Upon application by N [REDACTED] Company, the court of first instance preserved evidence of 14 machine tools of different models in the workshop of YI Precision Tools Technology Co., Ltd., and the alleged infringing software was fixed in some of the sampled machine tools. The court of first instance held that the infringement by YI Precision Tools Technology Co., Ltd. was established, ordered it to cease the infringement and pay 500,000 yuan in compensation for economic losses. Both N [REDACTED] Company and YI Precision Tools Technology Co., Ltd. appealed against the judgment. The collegial panel of the Intellectual Property Court of the Supreme People's Court, through careful review of the case files and multiple inquiries with the parties, found intense antagonism between them and significant disputes regarding both fact-finding and the amount of compensation. To fundamentally resolve the conflicts between the two parties and equally protect the lawful rights and interests of both Chinese and foreign parties, the collegial panel accurately pinpointed the focal points of their disputes and restored the case facts to the greatest extent possible. After each court session or inquiry, they communicated with both parties to ease the adversarial atmosphere. After months of repeated efforts, they eventually guided the parties to understand and voluntarily accept a settlement plan of "compensation + legalization" that better served their fundamental interests. This plan entailed both defendants ceasing the infringement and making a one-time payment of compensation to N [REDACTED] Company, while simultaneously reaching a five-year procurement agreement with N [REDACTED] Company for the computer software and hardware involved in the case. They also agreed on procedures for handling subsequent disputes and on cooperating to combat piracy in the Chinese market. The parties ultimately signed a settlement agreement, and the case was concluded by mediation.

[Significance]

The mediation of this case not only completely resolved the existing disputes between the two parties in a package but also, by leveraging the advantages of China's super-large market, facilitated the Chinese and foreign parties in reaching follow-up cooperation for the next five years. It transformed their litigation struggle into a cooperative bond, turning the parties from "opponents" into "partners." This fully reflects the judicial philosophy of Chinese courts, which values harmony and mutual benefit, and demonstrates the sound legal environment in China for promoting high-standard opening up.