PATENT INFRINGEMENT OF THE INVENTION PATENT FOR “REMOTE SOFTWARE SERVICE SYSTEM”
First Instance Docket: (2014) YiZhongMin(Zhi)ChuZi No. 6912
Second Instance Docket: (2017) JingMinZhong No. 206
CASE 2 :
City of Beijing
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[Headnotes]
Sales figures demonstrated on defendant’s website, although being notarized, but is still capable of manipulation or deletion, it may only be used as a factor for consideration for calculating damages if it is not consistent with common sense according to common sense and other evidence. If the evidence is sufficient to show that defendant has obviously made a profit of more that the statutory damages of one million Yuan, a high amount of damages than the statutory one may be fixed in order to provide effective protection of patent rights, and achieve fairness and justice.
[Synopsis]
Appellant (Plaintiff below): Beijing HelpNow Internet Technology Co., Ltd. (HelpNow)
Appellee (Defendant below): Tsinghua Tongfang Holdings, Ltd. (Tongfang), Tianjin LingShiKong InfoTech Co., Ltd. (qhelp.com.cn, or Qhelp)
HelpNow accused Tongfang and Qhelp of patent infringement of its “Remote Software Service System” by making and selling the Qhelp remote service software and the services they provide, seeking damages in the amount of 6 million Yuan. Qhelp’s online sale record shows: Share Suite at 99 Yuan x 31,233 suites; Carefree Suite at 149 Yuan * 54,326 suites. The first instance court found at trial infringement against Tongfang and Qhelp, but considered the online sales figures were not genuine accounting information, and issued an injunction and 500 thousand Yuan in damages against them. Qhelp appealed.
In the second instance, Tongfang and Qhelp claim that the online sales figures are “static data” for which they notarized the Qhelp servers to show that the sales figure of the software is zero. At the request of HelpNow, the second instance court issued subpoena to Suning Commerce Group Co., Ltd. for evidence which shows that the offline sales figures to be around 3.1 million Yuan.
Court of second instance found that the notarized data being derived from Qhelp’s Internet server could not rule out the possibility of manipulation or deletion; moreover, it was inconsistent with common sense that the online sales figure was zero; for this reason, Qhelp’s online sales record could be taken into consideration for assessing damages. Besides the online sales, additional offline sales were also made through Gome and Suning, and those through Suning alone were more than 3.1 million Yuan. Therefore, the evidence at hand sufficiently showed that Tongfang and Qhelp had made an infringement profit well above the upper limit of statutory damages of 1 million Yuan. For effective protection of patent rights, and for fairness and justice, the amount of damages may properly be excised above the statutory damages. Since the accused products were remote service softwares, and Tongfang and Qhelp would have to hire engineers to provide human services, it would be inappropriate to include the entire sales income as unjust enrichment. For comprehensive consideration of the value of the patent, the degree of contribution of the patent at issue to the infringing products, and other infringing factors of Tongfang and Qhelp, the second instance court modified the award of damages to 3 million Yuan against Tongfang and Qhelp.
[Judge’s Comment]
In patent infringement cases, it may not be easy for the patentee to obtain direct information on defendant’s infringement gains. Assessing damages in patent infringement cases has always been a hot point and a difficult one in judicial practice. The sales amount listed in defendant’s website, unless contrary to evidence or conspicuously inconsistent with common sense, could be taken as a factor in consideration of damages. Where defendant denies it by excuses of “static data,” “fair puffery,” or “actual sales as zero,” it should not be considered unless backed by evidence.
To clarify the facts, and for substantive justice, the court may admit evidence proffered by patentee from third parties. When the evidence sufficiently shows that defendant has made gains well above statutory amount of damages, the court may, according to circumstances of the case, assess damages over and above the statutory damages. The second instance court’s finding and ultimately its modification reflect a policy trend for enhancing judicial protection of intellectual property rights, by carefully analyzing defendant’s promotional material and comprehensively interpreting the patent statute on assessing damages, which is helpful for similar future cases.
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