CPS: Reasonable Allocation of the Burden of Proof in Patent Infringement Cases to Protect the Legitimate Rights of Patent Holders

The Supreme People’s Court of China (SPC) recently concluded a patent infringement case, confirming that where a defendant fails to present sufficient evidence about the legitimate source of the infringing product, statements made by the defendant in its marketing materials and advertising can be used as a basis for determining its manufacture of the infringing product.

In that case, plaintiff at first instance (appellant at second instance) was the exclusive licensee of the patent entitled “chisel-type expansion bolt”, and at first instance plaintiff claimed that defendant (the infringer) the manufacture, sale and offering for sale of the infringing product sued infringes its patent, and asked the court to order the defendant to stop the infringement and compensate its economic losses. Plaintiff notarized the purchase process of the infringing product prosecuted on defendant’s website and submitted relevant physical evidence. The trial court determined that the defendant’s sale of the product constituted infringement and ordered the defendant to stop the sale and compensate the plaintiff’s economic losses, but the court did not determine the defendant’s infringement in the manufacture of the product.

Dissatisfied with the judgment of first instance, the plaintiff appealed to the SPC, arguing that the infringer sued claimed as a manufacturer in its advertising materials and gave a detailed introduction on the structure, components and environment of application of the sued infringing product, and specifically labeling the plaintiff’s trademark on the sued infringing product when selling online, which could prove that the sued infringer committed the act of manufacturing the sued infringing product. The sued infringer claimed that the sued infringing product was purchased from a third party.

After the trial, the SPC found that: “Under normal circumstances, if a counterfeit product being prosecuted has been clearly identified by information such as the name and trademark of the production company, etc., on the basis of which the identity of the manufacturer can be determined, and then, in the absence of sufficient evidence to the contrary, the company that labels this information for public attention can be determined to be the manufacturer of the infringing product being prosecuted, as defined in the patent law. However, if the labeled information contradicts other evidence on file and is not sufficient to determine the identity of the manufacturer, and the infringer being sued provides relatively sufficient evidence, the determination must be made on the basis of the facts established in the case.” In this case, the scope of business of the prosecuted infringer included the manufacture of fasteners, i.e. he had the qualification and the ability to manufacture the prosecuted infringing products, and his trademark appeared in the photos of the products. counterfeit products displayed on the sales webpage of its online website. store, and slogans such as “factory direct sales” and “shortening the distance between factory and buyers” have been used on the webpage. Based on the relevant evidence on file, there can be preliminary evidence that the sued infringer manufactured the sued infringing products. The sued infringer claimed that the infringing product sued was not made by him, but was purchased from someone else and had a legitimate source, and in the meantime he provided chat records WeChat as proof. However, the content of the chat recordings did not reflect the details of the transaction, and no further transaction documentation was provided, so the evidence presented by the infringer prosecuted was insufficient to overturn the determination that the counterfeit product sued had been made by him. In view of the foregoing, the SPC determined that the prosecuted infringer had committed acts such as the manufacture of the infringing product prosecuted, and accordingly the SPC varied the trial judgment, ordered the prosecuted infringer to cease the acts infringement such as manufacture, sale, and offering for sale, and increased the amount of damages.

For online sales, it is generally difficult to prove the acts of manufacture of counterfeit products. With respect to this fact, in this case, the SPC reasonably distributed the burden of proof by shifting the burden of proof to the prosecuted infringer and requiring the prosecuted infringer to provide sufficient evidence on the legitimate source of the counterfeit product to provided that the infringer sued has the qualification and ability to manufacture the infringing product and has claimed himself as the manufacturer in his advertising materials, thus effectively assisting the patent holder to protect his rights and interests in accordance with the law.

https://ipc.court.gov.cn/zh-cn/news/view-2045.html

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