The list of cases, released late last month, touch on a wide variety of issues and are considered guidance from China’s highest court. Two hint at methods courts may employ to help overcome the challenges rights holders often face when trying to gather evidence.
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Two of the highlighted disputes feature courts shifting the burden of proof to the defendant where the defendant failed to provide evidence requested by the court.
In Zhuhai Geli Electrical (珠海格力电器股份有限公司) v Guangdong Meidi Refrigeration (广东美的制冷设备有限公司), the patent holder Zhuhai Geli asserted that four of Guangdong Meidi’s air conditioning products infringed its invention patent. Zhuhai Geli had discovered that one of the defendant’s products was infringing, and from the instruction manuals, argued that three other air conditioners manufactured by the defendant had the same patent-infringing feature (a “comfort sleep mode”) and were in fact just different models in the same line of products.
The defendant denied that the other three products featured the patented technology, though it also refused to produce evidence otherwise justifying this claim.
The Guangdong High Court shifted the burden to the defendant to prove its assertions, having found that the patent holder had made its preliminary case. After the defendant continued to refuse to produce evidence to justify its claims, the court awarded Zhuhai Geli ($328,000) RMB 2 million in damages.
Another model patent case also took a burden-shifting approach. In Ashland Licensing and Intellectual Property (亚什兰许可和知识产权有限公司) v Beijing Ruishibang Fine Chemistry Technology (北京瑞仕邦精细化工技术有限公司), the plaintiffs had a method patent for producing an industrial chemical. The plaintiff suspected that Beijing Ruishibang was infringing its patent because the product is generally not available on the market and a number of key employees of Beijing Ruishibang used to work for the plaintiff.
The lack of civil discovery was again a challenge for the plaintiffs that the shift of burden helped to overcome.
“The plaintiff tried its best to get evidence of the defendant’s manufacturing process, said Stephen Zou, partner at Lungtin International. “And considering the high possibility of infringement, the court ordered the defendant to provide evidence. After the defendant refused, the court shifted the burden of proof to the defendant.”
Working around the problems
Rights holders in China often cite the lack of civil discovery as an obstacle to getting evidence to show infringement, even when the infringer’s actions are obvious. These two cases cited by the SPC may seek to address this issue by shifting the burden to the defendants in certain instances where the plaintiffs have made a preliminary case.
“[The court in the Ashland case] shifted the burden to the defendant after the plaintiff made its best efforts to get the evidence,” said Zou. “This can be very helpful for rights holders who are trying to prove infringement, which can be difficult in China due to the lack of discovery.”
The relative lack of judicial power in enforcing evidentiary matters is another problem that forcing the defendants to produce evidence may help to address.
“The burden to produce evidence is always a big one for plaintiffs,” explained Ted Chwu, counsel with Bird & Bird. “Under China’s Patent Law you can apply for evidence preservation orders and we almost always advise clients to apply for them, but the problem is the other side often disregards these orders due to a lack of options for parties to enforce them in practice. Shifting the burden of proof to the defendant in some instances may help put force behind these orders.”
Influential guidance
The SPC’s model cases do not have the force of law. Nevertheless, they are closely followed and analysed as they hint at the court’s position on various legal issues. Some positions highlighted in SPC judicial interpretations and model cases have later been integrated into the law.
“These Supreme People’s Court judicial interpretations and model cases are very influential,” said Zou. “They can be taken as very strong suggestions and assurance to other courts that if they encounter a similar case, they can render a judgment in this way.”
“These cases are also to assure the public that Chinese courts are working to enhance IP protection.”
