The Supreme People's Court of China (SPC) recently concluded a patent infringement case, confirming that where a defendant failed to present sufficient evidence on the legitimate source of the infringing product, the statements made by the defendant in its marketing and publicity materials could be used as a basis for determining its manufacture of the infringing product.
In this case, the plaintiff in the first instance (the appellant in the second instance) was the exclusive licensee of the invention patent titled "scissor-type expansion bolt", and in the first instance, the plaintiff claimed that the defendant's (the sued infringer) manufacture, sale and offer for sale of the sued infringing product infringed its patent, and requested the court to order the defendant to stop the infringement and compensate for its economic losses. The plaintiff conducted a notarization of the process of purchasing the sued infringing product on the defendant's website and submitted relevant physical evidence. The court of first instance determined that the defendant's sale of the product constituted an infringement and ordered the defendant to stop the sale and compensate for the plaintiff's economic losses, but the court did not determine the defendant's infringement in manufacturing the product.
Unsatisfied with the first-instance judgement, the plaintiff appealed to the SPC, arguing that the sued infringer claimed itself as a manufacturer in its publicity materials and made detailed introduction about the structure, components and application environment of the sued infringing product, and specifically labeled the plaintiff's trademark on the sued infringing product when selling online, which could prove that the sued infringer had committed the act of manufacturing the sued infringing product. The sued infringer argued that the sued infringing product was purchased from an outsider.
After trial, the SPC held that: "Under normal circumstances, if a sued infringing product has been clearly marked with information such as the name and trademark of the production enterprise, etc., based on which the identity of the manufacturer can be determined, then in the absence of sufficient evidence to the contrary, the enterprise that labels such information for public attention may be determined as the manufacturer of the sued infringing product as defined in the Patent Law. However, if the labeled information contradicts other evidence on file and is not sufficient for determining the identity of the manufacturer, and the sued infringer provides relatively sufficient rebuttal evidence, the determination shall be made on the basis of the facts ascertained in the case." In this case, the sued infringer's business scope included fastener manufacturing, that is, it had the qualification and ability to manufacture the sued infringing products, and its trademark was marked on the pictures of the sued infringing products shown on the sales webpage of its online store, and slogans such as "factory direct selling" and "shortening the distance from factory to buyers" were used on the webpage. Based on the relevant evidence on file, it can be preliminarily proved that the sued infringer had manufactured the sued infringing products. The sued infringer argued that the sued infringing product was not manufactured by it but was purchased from someone else and had a legitimate source, and meantime it provided WeChat chat records as evidence. However, the content of the chat records did not reflect the details of the transaction, and no other transaction vouchers were provided, so the evidence submitted by the sued infringer was insufficient to overturn the determination that the sued infringing product was manufactured by it. In view of the above, the SPC determined that the sued infringer had committed acts such as manufacturing the sued infringing product, and accordingly the SPC changed the first-instance judgement, ordered the sued infringer to stop the infringing acts such as manufacturing, selling, and offering for sale, and increased the amount of damages.
For online sales, generally it is difficult to prove the acts of manufacturing infringing products. Regarding such fact, in this case the SPC reasonably allocated the burden of proof by transferring the burden of proof to the sued infringer and asking the sued infringer to provide sufficient evidence on the legitimate source of the infringing product under the condition that the sued infringer had the qualification and ability to manufacture the infringing product and claimed itself as a manufacturer in its publicity materials, thereby effectively helping the patentee safeguard its rights and interests in accordance with the law.
https://ipc.court.gov.cn/zh-cn/news/view-2045.html
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