The Supreme People's Court issued a final judgment in a utility model patent infringement dispute. The case emphasizes that, for related cases involving the same allegedly infringing product, the same patent, and the same non-infringement defense, the determination should be consistent to avoid conflicting judgments. Even if the alleged infringer did not appeal the after first-instance judgment, the second-instance court can, based on the established ruling in another case that the same defense was valid, legally reverse the judgment and affirm that the alleged infringer's defense is also valid.
In this case, Dongguan Company A, the patentee of an utility model patent entitled "A Deep Ultraviolet Air Drying Toothbrush Disinfection Case" (hereinafter referred to as the patent in question), claimed that a department store was selling and offering for sale a toothbrush case model DB805 (hereinafter referred to as the alleged infringing product) on the 1688 platform without authorization, and the product fell within the scope of protection of the patent in question, constituting infringement. The Dongguan Company requested to order the department store to cease the infringement and compensate for economic losses and reasonable expenses totaling CNY 50,000. The department store argued that the alleged infringing product were a dropshipping item sold on the 1688 platform, supplied by Shenzhen Company B as a third-party. The alleged infringing products had a legitimate source of acquisition, and the department store had no intention to infringe, and therefore should be exempted from liability for compensation.
After trial, the court of first instance held that the alleged infringing products fell within the scope of protection of the patent in question, constituting infringement. Yet, the court found the department store's legitimate source defense valid, exempting it from the damages liability, but it should bear some reasonable expenses. Accordingly, the first-instance court ordered the department store to immediately cease selling or offering to sell the alleged infringing products and to compensate Dongguan Company A CNY 2,000 for its reasonable expenses incurred to stop the alleged infringing activities. The Dongguan Company was dissatisfied and appealed, arguing that the department store's legitimate source defense was untenable and requesting a revision of the judgment to uphold all of its claims. The department store did not appeal.
In the second instance, the Supreme People's Court found that on May 26, 2021, Dongguan Company A purchased DB805 toothbrush case from the third party Shenzhen Company B. On September 26, 2021, the Dongguan Company filed a separate patent infringement lawsuit with the Shenzhen Intermediate People's Court of Guangdong Province (hereinafter referred to as the Shenzhen Intermediate Court), alleging that the Shenzhen Company's sale of the DB805 toothbrush case infringed the patent in question. In this case, the Shenzhen Company filed a patent conflicting application defense, arguing that it did not infringe the patent in question. Meanwhile, it also submitted a utility model patent, entitled "A Toothbrush Case with a Fan" (Patent No. 736), as evidence in its conflicting application defense. The Shenzhen Intermediate Court found the Shenzhen Company's conflicting application defense valid and issued a first-instance judgment on November 10, 2022, dismissing the Dongguan Company's claims. The Dongguan Company appealed the ruling. The Supreme People's Court issued a final judgment on May 31, 2024 (Judgment No. 662), dismissing the appeal and upholding the original judgment.
Dongguan Company A and the department store both confirmed that the alleged infringing products in this case were identical to those in Judgment No. 662. In the second instance of this case, the department store argued that the alleged infringing products used the technical solution disclosed in the conflicting application and also submitted Patent No. 736 as evidence in its conflicting application defense.
In the second instance, the Supreme People's Court held that: The court of second instance should conduct its hearing based on the parties' appeal. However, based on the facts ascertained by the court of second instance, if the first instance judgment violates legal prohibitions or harms national interests, social public interests, or the legitimate rights and interests of others, the court of second instance should rectify the judgment based on the facts and in accordance with the law. In this case, the department store, after receiving an order from Dongguan Company A, placed an order with the third party Shenzhen Company B. Shenzhen Company B then shipped the alleged infringing products directly to Dongguan Company A, the buyer. The alleged infringing products were sourced from the Shenzhen Company. Although the department store did not appeal, it filed a conflicting defense based on Patent No. 736 during the second instance. Given the effective Judgment No. 662 made by the Supreme People's Court and the close relevance of its findings to this case, this case should be examined based on the facts and in accordance with the relevant findings of Judgment No. 662. Judgment No. 662 determined that Patent No. 736 disclosed the technical solution of the alleged infringing product in that case, and the conflicting application defense in that case was established. Furthermore, the alleged infringing product in that case is identical to the alleged infringing product in this case. Therefore, in the absence of contrary evidence sufficient to overturn the effective Judgment No. 662, the conflicting application defense raised by the department store should be confirmed as valid, and the alleged infringing product sold by the department store in this case does not constitute infringement. The Supreme People's Court's second-instance judgment vacated the first-instance judgment and dismissed all claims of the Dongguan Company.
The second instance of this case accurately applied the provisions of Article 321, Paragraph 2 of the "the Supreme People's Court’s Interpretation on the Application of the Civil Procedure Law", which stipulates that "if a party has not made a request, the case shall not be heard, except where the first instance judgment violates the prohibitive provisions of the law or harms the national interests, social public interests, or the legitimate rights and interests of others." This ensured the consistent and coordinated judgment standards and results of related patent infringement cases, substantially resolved disputes, and achieved the consistency of legal and social effects.
(2023) Zui Gao Fa Zhi Min Zhong No. 740
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