Text: Beijing Jijia Intellectual Property*** Xi'an Branch, Chen Wanjun.
Abstract: The court's review of the "lawful defense" of the seller of infringing goods in a trademark infringement lawsuit includes both objective and subjective elements. For the review of objective elements, it shall proceed from the original intention of the system design, comprehensively consider factors such as the seller's market position, the cost of rights protection of rights holders, and market transactions, and make reasonable requirements for the seller's burden of proof. For the examination of the subjective elements, it is required that the seller is not subjectively at fault, that is, he did not actually know and should not have known that the goods he was selling were infringing. To grasp the subjective state of the seller, we should start from reviewing the evidence of the legality of the allegedly infringing goods, and make a comprehensive judgment based on the specific facts of the case and transaction Xi.
Keywords: Trademark Infringement Litigation;Lawful ** defense;Burden of proof
In recent years, with the increasing awareness of intellectual property protection and the improvement of intellectual property laws, there have been more and more litigation cases on the grounds that sellers sell goods that infringe on the intellectual property rights of right holders. The sale of infringing goods is undoubtedly an infringement of the intellectual property rights of the right holder, but the law also stipulates that if the seller has a legitimate defense on the basis that the goods sold have a legal defense and is supported by the court, it is not liable for compensation. So, under what circumstances and when what conditions are met, the court will support the seller's "lawful defense"?This article will take the (2022) Zui Gao Fa Min Zai No. 275 Civil Judgment [1] as an example to briefly summarize the key points of the trial of "lawful defense" in trademark infringement litigation.
(1) The legal provision of "lawful defense".
The legal provisions of "lawful defense" can be found in the second paragraph of Article 64 of the Trademark Law: "If the sale of goods that are not known to be infringing the exclusive right to use a registered trademark can prove that the goods were lawfully obtained by oneself and explain the provider, the person shall not be liable for compensation." and Article 4 of the Several Provisions of the Supreme People's Court on Evidence in Intellectual Property Civil Proceedings: "If the defendant asserts a lawful defense in accordance with the law, it shall provide evidence to prove the fact that the alleged infringing products and copies were lawfully obtained, including legal purchase channels, reasonable and direct suppliers, etc." Where the evidence provided by the defendant of the alleged infringing product or reproduction is equivalent to its duty of reasonable care, it may be found that it has completed the presentation of evidence referred to in the preceding paragraph, and it is presumed that it did not know that the alleged infringing product or reproduction infringed intellectual property rights. The defendant's business scale, professionalism, market trading Xi, etc., may be used as evidence to determine its duty of reasonable care. ”
(2) Typical cases
Nayiqier is a registered legal person in South Korea, which enjoys the exclusive right to use a registered trademark A, which is approved for use on perfumes, cosmetic lotions, cosmetics and other goods in Class 3, and the registration period is from May 7, 2013 to May 6, 2023. On January 1, 2019, Nayiqier signed a Power of Attorney with an intellectual property ** company, authorizing it to investigate and collect evidence and notarize evidence preservation for trademark infringement in Chinese mainland. On July 30, 2019, Zhang, the person in charge of the ** company, went to the "Duoning Jianglin Daily Chemical 1 Store" in a county in Baoding City, Hebei Province, and swiped the card to purchase a box of goods marked with the A trademark, and the "Jianglin Daily Chemical 1 Store Pedestrian Street Store (hereinafter referred to as Jianglin Store)" issued a shopping receipt, and the purchase process of the goods was notarized by a notary office in Hebei Province for evidence preservation. Nayiqier Company issued the "Identification Certificate", determined that the alleged infringing goods were counterfeit products of Nayiqier's registered trademark, and then filed a lawsuit with the Intermediate People's Court of Baoding City, requesting that the Jianglin Department be ordered to: 1. immediately stop infringing its exclusive right to use the trademark;2. Compensate for economic losses of 30,000 yuan and pay 10,000 yuan for the expenses incurred due to rights protection3. Bear the litigation costs. The court of first instance ruled in favor of the plaintiff's claim that the plaintiff should stop the infringement and defend its rights for costs and economic losses totaling 10,000 yuan.
The defendant Jianglin Gate Department was dissatisfied with the first-instance judgment, arguing that the evidence submitted by it could prove that it had fulfilled its duty of reasonable care and should not be liable for compensation, so it appealed. The court of second instance rejected the appeal and upheld the original judgment. The Jianglinmen Municipal Department was dissatisfied with the second-instance judgment and applied to the Supreme People's Court for a retrial.
The Supreme People's Court held that the focus of the dispute in this case was: the legitimate defense of Jianglin Gate and whether it should bear the liability for compensation. According to the provisions of the law and judicial interpretations, the establishment of the legal defense must have both subjective and objective elements: the objective element is that the allegedly infringing goods were lawfully obtained by the seller, and the subjective element is that the seller is not at fault;The above-mentioned subjective and objective elements are interrelated and inseparable, and the evidence of the objective elements has a presumptive effect on the subjective elements.
The review of the objective elements of the lawful defense shall be based on the original intention of the system design, comprehensively considering factors such as the seller's market position, the cost of protecting the rights of the right holder, and market transactions, and make reasonable requirements for the seller's burden of proof, and the relevant provisions of administrative regulations can also be used as a reference for determining whether the objective elements are established. In this case, the seller of the allegedly infringing goods, Jianglin Store, is an individual retailer, which is in a weak position in market business activities, and the transaction method is usually more flexible, so the burden of proof to prove the legality of the goods should be appropriately reduced, and it is not appropriate to be too strict on the completeness of the formal elements of evidence, as long as the evidence provided by it conforms to general trading Xi, can indicate the true identity information of the supplier of the allegedly infringing goods, and is through legal purchase channels and reasonable ** If the allegedly infringing goods are purchased, it shall be determined that the allegedly infringing goods sold by the allegedly infringing goods are legal. Among the evidence provided by the Jianglin Sales Department, the product distribution contract, the copy of the business license of Zhongxiang Company and other evidence showed that the business scope of Zhongxiang Company included the sale of cosmetics, and that there was a purchase and sale contract relationship between Jianglin Store and Zhongxiang Company regarding the products of Nayiqier Aloe Vera Gel, which had been truly performed. The above-mentioned evidence provided by Jianglin Gate shows that the transaction chain is complete, the transaction channels are legal, and the transaction method conforms to general trading Xi, and it is indicated that the supplier of the allegedly infringing goods is a public cosmetics company.
For the examination of the subjective elements, the subjective elements for the establishment of the legal defense require that the seller is not subjectively at fault, that is, he did not actually know and should not have known that the goods he was selling were infringing. According to the provisions of the judicial interpretation, the grasp of the seller's subjective state should start from reviewing the evidence of the legality of the allegedly infringing goods, and make a comprehensive judgment based on the specific facts of the case and transaction Xi. The seller's business scale, degree of professionalism, market trading Xi, etc., may be used as evidence to determine its reasonable duty of care. Under normal circumstances, compared with commercial entities with a certain scale, small-scale retailers have different cognitive abilities on whether the allegedly infringing goods are infringing, and if the legal evidence provided by the seller is equivalent to the degree of its duty of care, it can be presumed that it subjectively does not know that the goods sold are infringing. In this case, the allegedly infringing product, Nayiqier Aloe Vera Gel, is a kind of affordable daily cosmetics with a relatively meager market price and product profitsHowever, the seller's Jianglin Store Department is a self-employed industrial and commercial household, with a small business scale and a low degree of professionalism, so it is not appropriate to have too high requirements for its cognitive ability on whether the goods sold are infringing. Judging from the evidence provided by the Jianglin Department of Commerce, the evidence adduced by it can prove that it has obtained the allegedly infringing goods in accordance with the legal and normal market trading rules, and the goods are clear, the channels are legal and reasonable, and it also indicates that the provider of the allegedly infringing goods is a public cosmetics company, which should be deemed to have purchased the allegedly infringing goods in accordance with its business scale. The degree of professionalism and other appropriate reasonable care obligations, so that it is presumed that Jianglin Store did not actually know and should not have known that the goods sold were infringing goods, and there was no subjective fault on its part.
In summary, Jianglin Store has completed its burden of proving that the allegedly infringing goods have a legal ** and has fulfilled its duty of care, and its legal ** defense is established, and in accordance with the provisions of Article 64, Paragraph 2 of the Trademark Law, Jianglin Store should not be liable for compensation. The reasons for the corresponding retrial application of the Jianglin Gate Department are sustained, and this court supports it in accordance with law.
(3) Summary of key points
As mentioned in the above judgment, the main points of examination of the defense of legality** include two aspects: objective and subjective. In terms of objective elements, it is required that the alleged infringing product is legal, and the defender shall provide evidence of the whole process of the transaction between it and the previous transaction partner on the infringing product. However, in judicial practice, due to the differences in the business scale, professionalism and market trading Xi of the sellers, it is not easy for most sellers, especially small sellers, to provide complete and detailed evidence reflecting the whole process of infringing product transactions. Therefore, the review of such evidence should not be too mechanical and strict, comprehensively consider factors such as the seller's market position, the cost of rights protection of rights holders, and market transactions, and strive to achieve the unity of legal truth and objective truth in line with the concept of respecting objective facts. Specifically, the review can be conducted from the following three aspects: First, distinguish the identification criteria for defense subjects of different scales. The second is to focus on examining the relevance of the trading products and the infringing products reflected in the relevant evidence. The third is to pay attention to whether the transaction behavior is actually performed, and beware of false transactions concocted after the fact.
In terms of the subjective element, the seller should prove that it did not actually know and should not have known that the product it sold was manufactured and sold by the manufacturer without the permission of the patentee. Generally speaking, if the seller can prove that it complies with the legal and normal market trading rules, obtains the products sold in a clear and reasonable manner, and its sales behavior conforms to the principle of good faith and conforms to trading practices, it can be presumed that the seller does not actually know and should not know that the products it sells are manufactured and sold by the manufacturer without the permission of the patentee, that is, the seller is presumed to be not subjectively at fault. In this case, it is up to the right holder to provide evidence to the contrary. In the event that the right holder does not provide further evidence to the contrary sufficient to overturn the above presumption, it shall be deemed that the seller's lawful defense is established.
To sum up, the legislative purpose of the legal defense system is to seek a balance between the interests of intellectual property rights holders and bona fide sellers, and to protect the exclusive rights and interests of rights holders while ensuring the security of normal commercial transactions. The court's review of the legal defense in the trademark infringement lawsuit is also based on this purpose, comprehensively considering the interests of both parties, and conducting factual review and responsibility allocation from both objective and subjective aspects, in order to achieve the unity of legal reason and reasonableness, and take into account national law and human feelings.