China’s top 20 patent cases of 2020: Lingchuang Lighting v. Homy Lighting

China IP,[Patent]

 

Docket number of the case in the first instance: 519, first instance (初), civil case (民), (2020) Guangzhou Intellectual Property Court (粤73)
Docket number of the case in the second instance: 2596, second instance (终), civil case (民), (2020) Guangdong High People's Court (粤)
 
[Prefatory Syllabus]
The evidence obtained by the obligee or his entrusted agent by purchasing the infringing articles from the potential infringing party after fabricating or concealing their true identity or taking other measures for the purpose of evidence collection shall not be necessarily excluded because of the violation of the law; if this evidence collection provided an ordinary trading opportunity, rather than inducing the potential infringing party from scratch to commit infringement as instructed , that’s, the infringement on intellectual property rights is not committed solely based on the evidence collection act by the obligee or his entrusted agent, then relevant evidence collected may be used as evidence for the obligee to sue the accused infringing party for infringement.
 
[Basic Facts]
Appellant (Defendant in the case in the first instance): Guangdong Lingchuang Lighting Co., Ltd. (Hereinafter: Lingchuang Lighting)
Appellee (Plaintiff in the case in the first instance): Zhongshan Homy Lighting Co., Ltd. (Hereinafter: Homy Lighting)
 
Homy Lighting is the obligee of a “corrugated lamp" design patent. Homy Lighting found on the Internet that, in the exhibition publicity contents available at the official website of Lingchuang Lighting, Lingchuang Lighting displayed several corrugated lamps, one of which was similar to the patent involved. Homy Lighting entrusted Xie XX as its agent to initiatively add the WeChat ID of salesman Fu XX of Lingchuang Lighting. Xie fabricated his identity as Zhong XX from Fuxin Company and expressed his intention to purchase large quantities of corrugated lamp products for projects in other places. According to chat records between Xie and Fu, Xie asked Fu "Do you produce corrugated lamps?”, and Fu replied “Yes”, asking Xie to provide the appearance of the corrugated lamps to be produced. Xie sent a physical photo of corrugated lamps. Fu provided details on the size, power and other product information, and promise to supply in three days at the earliest. Later, the two sides concluded a transaction order. Three days later, Homy Lighting entrusted its agent Xie to pick up six sets of corrugated lamps at the site designated by Lingchuang Lighting in the presence of a notary, and obtained the sales receipt.
 
Homy Lighting filed a lawsuit with Guangzhou Intellectual Property Court, claiming that Lingchuang Lighting that manufactured, sold and promised to sell corrugated lamps infringing on the patent rights involved shall stop infringement acts and pay a compensation of RMB 100,000 for its loss. The Guangzhou Intellectual Property Court ruled in the first instance that Lingchuang Lighting committed infringement, ordering it to stop its infringement acts and pay a compensation of RMB 60,000 for loss incurred to Homy Lighting.
 
Lingchuang Lighting appealed to the Higher People's Court of Guangdong Province against the first-instance verdict, claiming that Homy Lighting purchased the alleged infringing product through “entrapment” and relevant evidence collected is illegal and shall be excluded. In the second instance, the Higher People's Court of Guangdong Province held that: First, from several corrugated lamp products displayed on the official website of Lingchuang Lighting for sale, one of the products is identifiable as having a similar appearance to the alleged infringing product. Based on this, Homy Lighting suspected on good grounds that Lingchuang Lighting has sold or is selling infringing products. As the exhibition has ended, to confirm whether this product constitutes infringement and whether Lingchuang Lighting is still committing infringement acts, it’s reasonable for Homy Lighting to purchase the alleged infringing products by means of corresponding evidence collection methods. Second, according to the transaction negotiation records between the agent entrusted by Homy Lighting and the employee of Lingchuang Lighting, Lingchuang Lighting has not denied that it could sell relevant products, and there is also no evidence proving that he was gradually induced by Homy Lighting to commit infringement acts. At last, the business scope of Lingchuang Lighting covers R&D, production and sales of illumination lamps and lanterns. The above transaction process between Homy Lighting and Lingchuang Lighting conforms to the trading habit of purchasing lighting products.   
 
To sum up, under the circumstance that there is evidence that Lingchuang Lighting has a large possibility of infringement, this evidence collection of Homy Lighting provided an ordinary trading opportunity, rather than inducing Lingchuang Lighting from scratch to commit infringement as instructed. Therefore, the evidence collected by Homy Lighting can be used as evidence to establish the facts of this case. Based on the above grounds, the court ruled in the second instance to: Dismiss the appeal and uphold the original judgement.
 
[Typical Significance]
In litigation for IPR protection, it’s very common for the obligee to purchase the infringing articles from the potential infringing party after fabricating or concealing their true identity or taking other measures for the purpose of evidence collection (also as entrapment). However, the accused infringing party disagrees on this kind of evidence collection, often defending that this kind of evidence collection violates the principle of honesty and integrity and disrupts its normal business order, and relevant evidence obtained shall not be accepted. Whether evidence collected with this method can be used has remained controversial in the field of theory and practice, and the judgment standards for this vary from place to place.
 
This case is governed by Article 7 of Several Provisions of the Supreme People's Court on Evidence in Civil Procedures of Involving Intellectual Property Rights, that’s, the evidence obtained by the obligee or his entrusted agent by purchasing the infringing articles from the potential infringing party after fabricating or concealing their true identity or taking other measures for the purpose of evidence collection shall not be necessarily excluded because of the violation of the law, and shall be analyzed based on specific circumstances and evidence of cases. Although this case doesn’t exclude relevant evidence, its reasoning makes clear the judgment criteria for two different “inducing evidence collection”, i.e., “opportunity-provided forensics” and “malicious-induced forensics”, of which the former is reasonable and relevant evidence collected in this way can be used. It also clarifies that, the way that induces the potential infringing party from scratch to commit infringement as instructed is identified as committing infringement on intellectual property rights solely based on the evidence collection act by the obligee, and evidence collected in this way shall be excluded.
 
This case provides a way to judge whether evidence collected through “inducing evidence collection” can be used, which is of typical significance.

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