Xiangong Meng, Partner of IP March

 Zunxia Li, Partner of IP March

In Chinese judicial practice, the difficulty of burden of proof has always been one of the most difficult problems IPR holders face when defending their IP rights through civil lawsuits. The reason for this dilemma, on the one hand, lies in the absence of an “evidence discovery” system similar to that in the United States, and on the other hand, can be attributed to strong concealment of infringement and control of infringement evidence by the infringer.

With a judicial tendency of strengthening IP protection, the Supreme People’s Court specially issued the judicial interpretation, “Several Provisions of the Supreme People’s Court on Evidence for Civil Lawsuits Involving Intellectual Property” (hereinafter “the Provisions”) to try to break the dilemma. The Provisions came into effect on November 18, 2020, and make many significant breakthroughs to effectively reduce the IPR holder’s burden of proof in civil lawsuit, which are summarized as follows:

1、Effectively reducing the burden of proof for IPR holders whose patented process does not produce a new product

Article 3 of the Provisions stipulates that where an IPR holder (the plaintiff) whose patented process does not manufacture a new product has fulfilled the burden of proof for the following facts:

(1) the product manufactured by the defendant is identical to that manufactured by the patented process;

(2) the product manufactured by the defendant is more likely to be produced by the patented process;

(3) the IPR holder (the plaintiff) had made reasonable efforts to prove the defendant’s use of the patented process,

the court may transfer the burden of proof to the defendant, requiring them to produce evidence to prove that their manufacturing process is different to the patented process.

2、Setting up a remedy of evidence preservation, obstruction and punishment

With respect to evidence preservation conducted by the court, Articles 13 and 14 of the Provisions further emphasize that where the defendant, without reasonable ground, refuses to cooperate or interferes with the court’s action of evidence preservation so that the evidence could not be preserved, or where the defendant, without authorization, conducts the acts of disassembling, tampering with or any other acts of destroying the evidence successfully preserved so that the evidence could not be used, the defendant shall bear all the adverse consequences arising therefrom. Furthermore, where such acts constitute judicial nuisance, the defendant will be punished with fines, detainment and even criminal sanction.

3、Citing mandatory submission orders of evidence and evidence presumption

In consideration that some critical evidence is controlled by the defendant, and the IPR holder is unable to acquire it, under the basic principle of “who claims, who adduces evidence”, Article 24 of the Provisions further allows the court, according to characteristics of evidence in different civil lawsuits, to directly issue mandatory submission orders to the defendant who possesses the evidence, ordering them to submit relevant evidence. Article 25 further stipulates that where the defendant, without proper grounds, refuses to submit, submits false evidence or destroys evidence or conducts any other acts that make the evidence unusable, the IPR holder’s corresponding claims relating to the evidence will be presumed tenable.

4、Expanding the scope of evidence regarding damages

In order for further improving current issue of “high amount of claim but low amount of award of damages”, Article 31 of the Provisions expands the scope of evidence regarding damages, IPR holder is allowed to adduce the evidences including but not limited the financial accounts, sales contract, annual reports, prospectuses, records on the websites or brochures, transaction data stored in equipment systems, commodity circulation data from third-party platforms, evaluation reports, licensing contracts, and records from relevant authorities of market supervision, taxation and financial departments, etc., to support its claims of damages.

This article was first published in AIPPI Newsletter January 2021