Union Brother (Shanghai) Machinery Co., Ltd. v. Shanghai Woodsea Machinery Co., Ltd.

China IP,[Unfair Competition]


Docket No.: 7, second instance (终), civil case (民), (2019) IP Court of the Supreme People's Court (最高法知) 



Union Brother (Shanghai) Machinery Co., Ltd. ("Union Brother") is a company that manufactures and sells optimizing cross-cut saw products. The company claims that it has the technical secret of "simultaneous measuring and cutting". Li **, Zhou ** and the other people left Union Brother and established Shanghai Woodsea Machinery Co., Ltd. ("Woodsea"), and used the technical secret of Union Brother to manufacture and sell the optimizing cross-cut saw products. Shouguang Luli Wood Industry Co., Ltd. ("Luli") used the optimizing cross-cut saw products, which also constituted infringement. In the second instance, the Supreme People's Court, according to the application of the parties, organized the parties to conduct an on-site inspection and technical comparison. After hearing, the Supreme People's Court held that, based on the empirical results of the second instance investigation, the sawing method and results of the accused infringing products had followed the process flow and achieved the same technical effect of the technical secret in question, which had constituted the infringement of the technical secret. Therefore, the Supreme People's Court revoked the verdict of the first instance, and order Woodsea to stop the infringement act and compensate the economic loss and reasonable expenses of RMB 6 million. Meanwhile, a fine was imposed on Luli for destroying the evidence seized by the People's Court without justifiable reasons.


This case involves the investigation and verification of complex technical facts and the application of the law. Through a number of court hearings, the substance and implication of the technical secrets were gradually clarified, while site inspection means were used to identify the facts of infringement, with a reasonable allocation of the responsibility of producing evidence to reduce the burden of proof of the right holders, which has fully demonstrated the judicial guidance to impose strict punishment on dishonest behaviors and maintain a fair competition order. Meanwhile, the decision to fine the party for destroying important evidence has also demonstrated the judicial attitude of the People's Court to advocate honesty and trustworthiness, punish the breach of trust, and build an integrity system for intellectual property litigation. 

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