Entrapment Evidence for IP protection: Admissible or Not?

2007/6/1By Dun Mingyue,[Comprehensive Reports]

Introduction

Is evidence obtained through entrapment legal or not? In the legal community, much attention was recently aroused by the case of Founder Group and Beijing Honglou Computer Technology Research Institute (jointly referred to as "Founder") vs. Beijing Hi-Tech Tianli Technology Co., Ltd. and Beijing Hi-Tech Technology (jointly referred to as "Hi-Tech") on the asserted infringement of computer software copyrights. After the first-instance trial, the second-instance trial and the retrial, the Supreme People's Court finally ruled that the entrapment evidence of Founder is legal. However, it is a pity that the Supreme People's Court, in its final judgment, only indicated an error in the second-instance court's finding, but did not explain in detail the conditions under which evidence obtained through entrapment could be accepted. As a result, the judgment is only applicable to the Founder case and cannot be applied as a precedent for guiding rulings on future cases.

By analyzing the origin of entrapment and the judicial practice in China, this paper discusses the conditions under which evidence gained through entrapment is admissible in the court as evidence for proving infringement.


I. The origin of entrapment

Originally entrapment was used for investigating criminal cases. Sometimes, the police would set up traps to obtain evidence because the evidential requirements for a criminal case are strict and crimes are committed covertly. The police use traps most often to investigate cases involving drugs, smuggling or organized prostitution.

Concerning criminal cases, entrapment is categorized into disposition-inductive type and chance-providing type. The disposition-inductive type means that a suspect who has no intent to commit a crime is persuaded by the agent provocateur to generate an intent and commit a crime. A typical case is Sherman vs. the United States. In this case, the informer knew the suspect who was being treated in a rehabilitation center. He asked the suspect to obtain some drugs, and the suspect at first replied that he did not have any. As the informer persisted, the suspect eventually obtained a few packets and sold them to the informer. The police had no other evidence besides the fact that the defendant Sherman had been imprisoned previously to prove that he was ready and willing to meet the informer's requirements. In the United States, entrapment refers only to evidence obtained through inducement. Once entrapment is found, US courts would consider the evidence to be invalid. Conversely, any evidence which is NOT obtained through inducement could be accepted in criminal cases. In the case of Sherman vs. United States, the Supreme Court restated the standard to be applied in distinguishing entrapment from legal evidence as was stated in the case of Sorrells vs. United States, "a different question is presented when the criminal design originates with the officials of the Government, and they implant in the mind of an innocent person the disposition to commit the alleged offense and induce its commission in order that they may prosecute." The Supreme Court ultimately decided that there was entrapment and the suspect was acquitted.

The chance-providing type of entrapment refers to situations where the suspect has criminal intent and is ready for the commission of a crime, and the police only lay a trap to provide the suspect with a chance to commit the crime. The chance-providing type and the disposition-inductive type are different mainly due to the origin of the criminal intent, i.e. whether through inducement by the police according to the criminal design or from the suspect himself. The chance-providing type of entrapment is permissible in criminal cases in many countries.

In China, entrapment in criminal cases is referred to as a "special circumstances inducement". In the Notice on the Print and Distribution of the Minute of the Working Symposium on Drug Crimes for People's Courts in January 2001, the Supreme People's Court pointed out that "it should be attended to in judicial practice that special circumstances, as an important means to crack down on current drug crimes, may not comply fully with the relevant regulations but induce criminal intent or the quantity required in the investigation." To "induce criminal intent" means to induce or persuade a person through special circumstances to commit a drug crime where he originally did not have the subjective intent, so that he develops the intent and commits the crime. As a result, the defendant should be punished leniently and the death sentence should not be immediately carried out. To "induce the quantity required" means to induce or persuade the wrongdoer through special circumstances, to transact a relatively large amount of drugs where he originally intended to deal with a small quantity, which large amount could eventually lead to a death sentence. In such cases, generally no immediate execution of death sentences should be carried out. Therefore, in criminal cases involving drugs, China generally accepts entrapment evidence, be it either the disposition-inductive type or the chance-providing type, with the difference only in the criteria for sentencing.


II. China's regulations and practices to admit entrapment evidence in civil cases

In civil infringement cases in China, the infringement of intellectual properties is more common and relatively hard to discover, and currently entrapment exists primarily in this field. As China has no laws or regulations on the evidentiary effect of entrapment, we have to depend on some judicial interpretations and adjudications in this study. In Article 68 of Some Rules on Evidence in Civil Proceedings, the Supreme People's Court provides that any evidence, which is obtained by invading others' legal interest or violating prohibitive norms of law, cannot be used as a basis to determine a case. The Article intends mostly to define the legitimacy of evidence, but it provides ambiguously as to the evidentiary effect of entrapment. It has led to different understandings by the No. 1 Intermediate People's Court of Beijing, the High People's Court of Beijing and the Supreme People's Court in Founder vs. HiTech.

Here, it is necessary to take a look at some details of the case.

An employee of Founder, disguised as a common buyer, purchased a phototypesetter from HiTech and at the employee's request, HiTech installed in the set unlicensed copies of Founder Century RIP and Beijing Founder PostScript Chinese fonts for the employee. The purchasing and installation process was notarized by Beijing Guoxin Notary Public Office. During the first-instance trial, the No.1 Intermediate People's Court of Beijing approved of the way Founder obtained the evidence, deciding that HiTech should stop the infringing act, make a formal apology and compensate Founder for the economic losses and the costs of the investigation incurred by Founder. Discontented with the first-instance judgment, HiTech appealed to the High People's Court of Beijing on account of Founder's disguising itself, making false presentations and laying traps to obtain the evidence. After the court hearing, the High People's Court of Beijing determined that Founder's entrapment of HiTech had violated the fairness doctrine, and if entrapment was widely employed, normal market order would suffer. As a result, it changed the original sentence by accepting the fact that HiTech had sold unlicensed copies of software to Founder, while refusing to support Founder's claim that HiTech should compensate it for the cost of the entrapment.
After the second-instance trial, Founder managed to collect evidence of HiTech's sales of infringing software to other companies and submitted it to the Supreme People's Court for a retrial. The Supreme People's Court rendered its judgment on August 7, 2006. In the judgment, it denied the High People's Court of Beijing's decision that the evidence from entrapment was illegal and provided the following statement on the legality of entrapment:

For civil proceedings, the law lays down many express provisions on illegal acts, but it is never exhaustive on account of the extensive social relations and complicated relationship of interests, unless provided otherwise. It allows more space for solutions based on the balancing of interests and valuation. Therefore, any act, if it is not expressly prohibited by law, should be judged in terms of substantive fairness. For the case at hand, Founder, through the notarization process, obtained evidence proving that HiTech installed unlicensed copies of software, as well as evidence or clues proving that HiTech sold unlicensed copies of software to others in similar acts of infringement. Its objective was not unfair in anyway and its actions did not damage the social public interests or any others' legal interests. In addition, considering that computer software infringement is hidden and difficult to find, Founder's actions in obtaining evidence overcome the difficulty in evidence collection, deter and restrict any potential infringers, and comply with the spirit of law to enhance intellectual property protection. Besides, in so doing, Founder does not infringe the legal interests of HiTech. Founder's claim for a retrial is justified and should be supported. 

As a matter of fact, the Supreme People's Court issued the Interpretation of the Supreme People's Court for Some Issues in the Application of Law for Hearing Civil Cases of Copyright Disputes on October 12, 2002, shortly after the High People's Court of Beijing rendered its judgment on July 15, 2002.  According to Article 8 of the Interpretation, any document or invoice may be used as evidence, which is obtained by the party concerned either by itself or through an agent who ordered or bought the infringing copies. It is obvious that the Supreme People's Court has admitted the legitimacy of entrapment in the Interpretation and the above judgment.

III. Other conditions for admission of entrapment evidence

As the Supreme People's Court's adjudication and interpretation admitted the legitimacy of entrapment, then may all evidence obtained through entrapment be admissible? No, far from it, as this author sees it. According to Some Provisions of the Supreme People's Court on the Evidence in Civil Proceedings, to assess civil evidence, the court needs to consider its truthfulness, relevancy and legitimacy. That is, in addition to legitimacy, truthfulness and relevancy of evidence should also be considered by the court. Even though evidence obtained through entrapment is legitimate, it may not be used to prove an infringing act under all situations. In the opinion of this author, to decide on infringement based on entrapment, the following elements should also be considered from the categorization of entrapment in criminal cases and the judicial practice in China:
1. The root of the intent for infringement

The categorization of entrapment in criminal cases provides a good reference for the admissibility of evidence in civil cases. The standard for evidence in criminal cases is different from that in civil cases. Criminal cases require that evidence not be admitted unless it is proven beyond a reasonable doubt. However, in civil cases, the preponderance of evidence doctrine is adopted, i.e. the court compares evidence from the parties and determines which party's evidence has greater probative value and makes confirmation. Although entrapment is allowed in criminal cases, the judicial practice should not encourage a party in a civil case to obtain evidence through inducement because the requirement for evidence is much less severe in civil cases. In this author's opinion, only entrapment of the chance-providing type should be admitted in a civil case.  

In some cases, it is possible for the court to use evidence and determine the type of entrapment. A judge from the High People's Court of Beijing who participated in the hearing of Founder vs. HiTech wrote  that HiTech had prepared licensed software copies for the laser phototypesetter concerned and even refused to install the unlicensed copies Founder's employee required. However, as Founder's employee persisted, the HiTech's salesperson, unable to resist the temptation of the sales opportunity, deleted the licensed copies and installed the unlicensed copies. It is rather a pity that this fact was not presented in any of the three judgments. If HiTech could have proven this fact, in the opinion of this author, the entrapment would have been found to be the disposition-inductive type and Founder's claim for infringement by HiTech could not have been supported.

2. Is there any other evidence proving that the actor has committed the infringing act

In Founder vs. HiTech, Founder was not supported in the second-instance trial. One of the main reasons was that Founder did not prove that HiTech provided copies of the unlicensed software to others. Afterwards, Founder sought and collected such evidence so that the judgment was changed. Therefore, any other evidence that the actor is ready and willing to procure to demonstrate the infringing act is to be considered in a case involving entrapment.

The actual transaction by the actor is often covered up, making it difficult for others to obtain direct evidence of the transaction. However, the right owner will always find any trace of infringement by resorting to other means. For example, the actor often tries to attract buyers by distributing promotional materials or through the Internet. The owner may collect the product description, the advertisements or the information on the Internet from the actor to prove that the actor has the intent to commit the infringement. Such evidence will help prove the original intent of the actor and obtain support from the court for a finding of entrapment.


3. Scope of infringement

In practice, there may be a situation where the alleged infringing commodity contains a trademark, patent or a piece of software which is similar to that of the owner. As a result, disputes arise as to whether it constitutes infringement. In such a circumstance, the owner may, when laying the trap, request the actor to provide a commodity with the exact trademark, patent or software as the owner's, so that the administrative office or the court may easily identify the infringement and support the claim of the owner.

In the opinion of this author, the above act is entrapment of a disposition-inductive type, i.e. the actor who did not have the intent to copy a trademarked item is induced by the owner to have the intent. If the actor proves that the evidence from the owner is obtained in this way, the entrapment evidence from the owner should not be admitted. Moreover, the court should also examine the commodity provided or manufactured by the actor to see whether it infringes the rights of the owner after the actor has proven that the commodity it provides to the owner is different from the owner's commodity.

Surely, in addition to the above, the court may also use other evidence in a specific case to determine whether infringement has occurred (such as, do the parties compete against each other in other fields so that the owner may set up illegal traps, or does the actor have a record of infringement) and whether the entrapment evidence from the owner can be admitted. If the owner has entrapment evidence and the actor claims to have had no malicious intent for infringement until being induced by the owner, the court should consider other evidence in the case to decide whether the entrapment may be permissible.

Conclusion

Through adjudication and interpretation, the Supreme People's Court has ruled that entrapment is legal under certain conditions. However, not all evidence obtained through entrapment should be admitted. It is also dependent on the intent for infringement, the existence of other evidence to corroborate that the actor has the infringing act, and whether the scope of entrapment is within the limit of the previous acts of the actor. The above should all be considered before the court determines whether an act of infringement has occurred.

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