On November 16th, Xiamen Farah Electronics Co., Ltd. (hereinafter referred to as “Ferrar Electronics”) issued an announcement about the litigation, showing that it received a notice of response to the lawsuit (2021) Yue 03 Min Chu No. 5020 from the Shenzhen Intermediate People’s Court of Guangdong Province, etc. In related documents, Matsushita Electric Industrial Co., Ltd. believed that Farah Electronics manufactured, sold and offered to sell “C36 dry-type DC filter capacitors” without permission for the purpose of production and operation, which infringed its patent rights, and demanded Farah Electronics to compensate 35 million yuan, Immediately stop the manufacture, sale, and promise to sell the accused infringing products, and require Farah Electronics to bear the reasonable expenses of RMB 500,000 for the plaintiff’s rights protection.

(Sourced from Farah Electronic Bulletin)

The announcement shows that the basic situation of the lawsuit is as follows. The plaintiff is Panasonic Electric Industrial Co., Ltd. (hereinafter referred to as “Panasonic”), the first defendant is Farah Electronics, and the second defendant is Shenzhen-Hong Kong Law Technology (Shenzhen) Co., Ltd.

Panasonic claimed that it had the patent right of Invention Patent No. 200380101061.7 in China, and believed that the defendant had infringed its patent right by manufacturing, selling and offering to sell “C36 dry-type DC filter capacitors” for the purpose of production and operation without permission.

Panasonic’s claims include:

1. Order the defendant to immediately stop the infringement of the plaintiff’s patent for invention No. 200380101061.7, including stopping the manufacture, sale, and promise to sell the accused infringing product;

2. Order the second defendant to immediately stop infringing the plaintiff’s invention patent No. 200380101061.7, including stopping sales and promising to sell the accused infringing products;

3. Order the first defendant to compensate the plaintiff for economic losses of RMB 35 million;

4. The defendant is ordered to bear the reasonable expenses of RMB 500,000 for the plaintiff’s rights protection.

Farah Electronics stated that this lawsuit will not affect the company’s daily production and operation. The company has hired a team of professional intellectual property lawyers to respond to the lawsuit. The company and the lawyer team believe that the product involved does not infringe the patent involved. The company will actively seek a reasonable response plan to safeguard the legitimate rights and interests of the company and its shareholders. The progress of the Company will fulfill the obligation of information disclosure in a timely manner. Investors are advised to pay attention to investment risks.

It is understood that the main business of Farah Electronics is the manufacturing of electronic components, accounting for 98.04% of its revenue. According to the three quarterly reports disclosed by the company, the company achieved a total operating income of 2.02 billion in the first three quarters of 2021, a year-on-year increase of 51.2%; a net profit attributable to the parent of 550 million, a year-on-year increase of 50.1%; earnings per share It is 2.45 yuan.

At the same time, the company’s operating costs rose sharply during the reporting period, and operating cash flow rose sharply. Specifically, the company’s operating cost in the third quarter of 2021 was 1.16 billion, a year-on-year increase of 55.2%, higher than the 51.2% growth rate of operating income, resulting in a 1.5% drop in gross profit margin. The period expense ratio was 10.5%, down 1.5% from the previous year. Operating cash flow rose sharply by 145.7% to 570 million.