In the process of examining whether the legal source defense claimed by the seller is established, full consideration should be given to whether the source of the product is standardized and legal, and whether the seller has fulfilled the obligation of prudence subjectively, etc., so as to achieve a balance between strict protection of intellectual property rights and protection of transaction security.
First-instance case number: (2017) Guangdong People’s Court 73 Civil Judgement No. 3026
Second-instance case number: (2019) Guangdong People’s Court Final Civil Judgement No. 1448
【The main takeaway of the trial】
In the process of examining whether the legal source defense claimed by the seller is established, full consideration should be given to whether the source of the product is standardized and legal, and whether the seller has fulfilled the obligation of prudence subjectively, etc., so as to achieve a balance between strict protection of intellectual property rights and protection of transaction security. Since the purchase contract stipulates that the product will be produced in accordance with the production technology standards provided by the seller, and the seller’s logo is printed on the product instead of the manufacturer’s trademark, showing that the seller and the producer are not merely a cooperative relationship of purchase and sale, and therefore, it does not meet the legal requirements of a legal source defense.
【Case Introduction】
Appellant (defendant in the original trial): Shenzhen Baixiong Xinpai Trading Co., Ltd. (referred to as Baixiong Xinpai)
Appellant (plaintiff in the original trial): DECATHLON
Appellee (defendant in the original trial): Shenzhen Kuyou Sporting Goods Co., Ltd. (Shenzhen Kuyou), Dongguan Kuyou Sporting Goods Co., Ltd. (Dongguan Kuyou)
The patent involved is a design patent named "diving mask" owned by DECATHLON, France, and the patent number is ZL 201430112503.9. DECATHLON sued the three defendants for joint infringement after discovering that the diving mask products produced by Shenzhen Kuyou and Dongguan Kuyou and sold by Baixiong Xinpai infringed the involved patent. Shenzhen Kuyou and Dongguan Kuyou are related companies, and Baixiong Xinpai claimed to have a cooperative relationship with Dongguan Kuyou when selling the alleged infringing products. DECATHLON purchased the accused infringing products separately from the three defendants through various online and offline channels and adopted various methods to collect evidence of the defendant's sales. Before the lawsuit, in this case, DECATHLON asked the law enforcement officers of the local market supervision and administration bureau to investigate and deal with Baixiong Xinpai’s alleged infringing products. Baixiong Xinpai provided the law enforcement officers with a procurement contract to purchase products from Dongguan Kuyou.
In the first instance, Shenzhen Kuyou and Dongguan Kuyou denied joint infringement. DECATHLON proved that the shareholders and executives of Shenzhen Kuyou and Dongguan Kuyou overlapped, and the shipping addresses of the alleged infringing products sold online were the same, and the invoices for the products purchased at the registration place of Dongguan Kuyou were issued by Shenzhen Kuyou. Therefore, the court of the first instance determined that the two had jointly committed the infringement, and based on the evidence, ordered the two to compensate DECATHLON for economic losses and reasonable expenses of RMB 500,000. Baixiong Xinpai claimed that all the alleged infringing products it sold were provided by Dongguan Kuyou, and argued that it was defended by legal sources. The court of the first instance did not support it and ordered Baixiong Xinpai to compensate DECATHLON for economic losses and reasonable expenses of RMB 100,000. The Baixiong Xinpai refused to accept the judgment of the court of the first instance and filed an appeal.
The court of second instance held that Baixiong Xinpai did not provide evidence to prove the actual performance of the procurement contract with Dongguan Kuyou, even if the procurement contract has been actually performed, according to the contract record, the production’s technical standards are provided by Baixiong Xinpai Company, and Dongguan Kuyou Company strictly produces in accordance with the model confirmed by both parties; and the alleged infringing products sold by Baixiong Xinpai are printed with the "NEOpine" trademark, and the products jointly manufactured and sold by Shenzhen Kuyou and Dongguan Kuyou are marked with the "THENICE" trademark. Baixiong Xinpai failed to explain the above contradictions reasonably but further proved that the relationship between it and Dongguan Kuyou is not a pure purchase and sales cooperation relationship, and it does not meet the legal source defense. The court of the second instance rejected the appeal request and upheld the judgment of the first instance.
The lawyer of Beijing Wanhuida Law Firm, as the agent of the plaintiff in the original trial and the appellant of the second instance (DECATHLON), participated in the first and second instance procedures of this case.
【Typical meaning】
The court, in this case, made positive determinations on legal issues such as joint infringement and legal source defense, and supported a high damages of RMB 600,000. The defendants Shenzhen Kuyou and Dongguan Kuyou produced and sold the alleged infringing products in large quantities for a long time; Baixiong Xinpai had a business relationship with the two parties and also sold the alleged infringing products for a long time. Among them, Baixiong Xinpai still refused to pay reasonable compensation to the right holder DECATHLON, after being investigated by the administrative agency. In order to effectively crackdown on infringements, DECATHLON took the three defendants as co-defendants to sue infringement. Since the three defendants are independent entities, have their own sales platforms, and the sales channels are scattered, in order to prove the joint infringement of the three defendants, the plaintiff successfully obtained evidence to prove the joint infringement of the three defendants through a variety of evidence collection methods. The court found that Shenzhen Kuyou and Dongguan Kuyou jointly produced and sold infringing products and rejected Baixiong Xinpai's legal source defense. In one case, all three defendants were found to be infringing, saving the right holders the cost of rights protection.
In addition, combined with the sales evidence obtained by the right holder through various methods such as web notarization, on-site recording, administrative investigations, and overseas evidence collection, the court decided the three defendants to compensate 600,000 yuan, which played a positive role in the protection of external design patents. Among them, the administrative agency investigated and collected a large number of sales records of the defendant Baixiong Xinpai, which were fully accepted by the court, which also reflected the good connection between patent administrative protection and judicial protection.
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