[Author: Shanji Fang]

III. Application of Obstruction of Evidence Production Rule in Patent Infringement Judgment

In the practice of patent infringement disputes, especially the infringement cases involving manufacturing equipment and BtoB infringement, it is also a common problem for right holders to prove patent infringement. In such cases, it is often difficult for rights holders to preserve evidence of infringement through open channels. At this time, many rights holders will consider applying to the court for evidence preservation. In practice, the application of obstruction of evidence production rule in the determination of patent infringement also mostly originated from the right holder's application for evidence preservation.

1. Conditions of application

(1) The court preserved evidence of the infringement.

According to Article 81 of the Civil Procedure Law of the People's Republic of China, when evidence is likely to be lost or difficult to obtain later, the parties may apply to the people's court for evidence preservation in the course of litigation, and the people's court may also take measures to preserve evidence on its own initiative.

In the practice of intellectual property civil trial, evidence preservation is one of the most important ways to obtain evidence. In the Provisions on Intellectual Property Evidence, in combination with the characteristics of intellectual property civil cases, relevant provisions have been made on the examination of evidence preservation request, preservation measures, the consequences of obstructing evidence preservation, the legal liability of destroying preserved evidence, the participants of evidence preservation, the production of evidence preservation records, and the respondent's objection, etc.

In the practice of patent infringement, the court usually initiates evidence preservation according to the request of the party concerned. As the right holder of a patent infringement dispute, if it is difficult to preserve infringement evidence through open channels, it can apply to the court for evidence preservation, provided that the right holder should provide preliminary evidence of the existence of the infringement. To produce preliminary infringement evidence, if there is no infringing object preserved with notarization, the infringing object without notarization could be submitted. In combination with the infringer's publicity materials, official website or exhibition publicity materials and other evidences that reflect the technical features of the infringing product to the patent involved, it can be proved through a series of evidence that there is a high possibility that the accused infringing products falling into the scope of protection of the patent involved and a complete evidence chain has been formed. In addition, the right holder can also explain to the court the objective fact that it is difficult to obtain evidence from open channels in respect of the industry trading habits or circulation methods of infringing products. The court will decide whether to start evidence preservation after considering the right holder’s evidence on record. Only when the court has initiated the evidence preservation procedure, can the obstruction of evidence production rule be applied to the patent infringement.

(2) The infringer has obstructed the court to find out the infringement.

In judicial practice, infringers’ obstructive behaviors generally include inaction in a passive manner and action against the court’s ascertainment of the infringement. Passive inaction refers to the situations where the court orders the accused infringer to submit evidence related to the facts to be proved, but the accused infringer refuses to provide without justified reasons. Action mainly refers to that the accused infringer refuses to cooperate with the court to preserve the evidence, make the court staff unable to access the evidence related to the infringement, or damage, illegally transfer or destroy the evidence that the court has taken preservation measures.

2. Consequences of the application of the obstruction of evidence production rule.

(1) Directly presume that the right holder's claim of infringement is established.

As for the evidence that the court has adopted preservation measures, if the accused infringer has implemented the above-mentioned obstructive behaviors, which makes it impossible to make technical comparison between the accused infringing product and the patent involved, and thus cannot be used in infringement determination, the court will presume that the right holder’s claim of infringement is established.

For example, in the case (2019) Su 05 IP First No. 1122, based on the right holder's pre-litigation preservation request, the court, took preservation measures and took on-site photos of the sued infringing products and made notes, clearly informing the accused infringer not to destroy or transfer the preserved evidence. However, during the trial of the first instance, the court conducted an on-site inspection of the accused infringing product preserved before litigation, and found that the accused infringer had moved the preservation site, which made it impossible to organize the technical comparison between the accused infringing product and the patent involved, and the key fact whether the infringing product fell into the scope of protection could not be ascertained. Therefore, the first instance judgment applied the obstruction of evidence production rule and presumed that the accused infringing product fell within the scope of protection of the patent involved.

From the above case, the key point for the court to apply the obstruction of evidence production rule and directly presume the establishment of the right holder's claim of infringement is that the court preserves the part of the accused infringing product that corresponds to the technical features of the patent involved in the case, and the said part is completely destroyed or eliminated due to the obstructive behavior of the accused infringer, and it is impossible to determine whether the infringement is established based on the evidence at the time of preservation, however, the establishment of infringement can reach the standard of high probability according to the preliminary evidence of the right holder and other evidence on the record.

(2) If the infringer's obstruction of evidence production does not affect the judgment of infringement, the judgment of infringement shall still be made based on the evidence on record.

Although the infringer has damaged or transferred the evidence preserved by the court, the court will not directly presume that the infringement is established given the act of obstruction of evidence production does not damage the technical features related to the patent involved in the alleged infringing product, or the court can make a judgment of infringement based on photos or videos at the time of evidence preservation, or in combination with other evidence on the record. Instead, the court will make infringement judgment based on the evidence on the record and the preserved evidence after a comparison between the infringing product and the patent involved.

For example, in the case (2018) Hu Civil Final No. 438, the court held that the evidence was damaged due to the alleged infringer's poor custody, for the part of the video and photo at the time of preservation that can be technically compared, objective facts should be respected, and the obstruction of evidence production rule should no longer apply.

Therefore, the obstruction of evidence production rule does not apply to all the obstructive behaviors. For the evidence preserved by the court that is contaminated or damaged, if the court can still determine the infringing act based on the evidence on the record and the objective facts, it will still make a judgment based on the evidence on the record and the objective facts.

(3)Judicial discipline

According to Article 114 of the Civil Procedure Law, if a litigation participant or other person commits any of the following acts, the people's court may impose a fine or detention based on the severity of the circumstances; Where a crime is constituted, criminal responsibility shall be pursued in accordance with law: (1) Forging or destroying important evidence, obstructing the people's court's trial of the case.

According to the above provisions, judicial punishment can be imposed on all acts of obstruction of evidence production in civil cases, and in patent infringement dispute cases, there are many cases of judicial punishment for obstruction of evidence production in determining patent infringement. The court not only takes the alleged infringer's obstruction of evidence production as the basis for determining whether the infringement is established, but also punishes the alleged infringer for his acts and imposes a fine.

For example, in the case regarding Civil Judgment (2019) Su 05 IP First No. 112 and Civil Ruling (2020) Su 05 Judicial Punishment No. 1, for the act of the accused infringer transferring and causing the loss of infringement evidence, the court not only determined that the alleged infringing act constituted infringement of patent rights and fully supported the plaintiff's claim for compensation, but also imposed a judicial punishment of a fine of 200,000 yuan on the accused infringer for its unauthorized transfer of the evidence preserved before litigation, which led to the loss of evidence and seriously obstructed civil litigation. In the case (2021) Supreme IP Judicial Punishment No. 1 of Supreme People's Court, although the act of the accused infringer was finally determined not to constitute infringement, the Supreme People's Court still imposed a judicial punishment of a fine as high as 200,000 yuan for his obstruction of evidence production in the first instance.

1. Punitive damages

With the promulgation of the Civil Code and the fourth revision of the Patent Law, punitive damages have been introduced in the field of patent infringement. According to the relevant provisions of the Patent Law and the Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Trial of Civil Cases Involving Infringement of Intellectual Property Rights (Court Interpretation [2021] No. 4) (hereinafter referred to as the "Judicial Interpretation of Punitive Damages"), the two applicable conditions of punitive damages are intentional infringement and serious infringement.

Among the provisions, Article 4 of the Judicial Interpretation on Punitive Compensation stipulates that the people's court shall comprehensively consider the means and times of infringement, the duration, geographical scope, scale and consequences of the infringement, and the acts of the infringer in the litigation as well as other factors in determining the seriousness of the infringement of intellectual property rights.

Where the defendant has any of the following circumstances, the people's court may determine that the circumstances are serious:

(3) Fabricating, destroying, or concealing evidence of infringement;

(4) Refusal to perform preservation ruling.

It can be seen that when the defendant refuses to perform the ruling on evidence preservation and forges, destroys or conceals the evidence of infringement, it may be determined that the infringement is serious, and if there is also the intention to infringe, punitive damages will be awarded.

IV. Summary

In the case of patent infringement dispute, the patentee can actively apply for evidence preservation or evidence discovery when facing difficulties in providing evidence for patent infringement and compensation. However, "who claims who produces evidence" is the fundamental civil evidence production principle, the right holder, as the party who bears the burden of proof, should first exhaust every means to produce evidence, at least he shall be able to initially prove the possibility of the facts claimed, so that the court can realize the equivalence of the burden of proof and the balance of interests between the right holder and the accused infringer when deciding on evidence preservation or evidence discovery. In the respect of how the right holder shall exhaust every means to produce evidence, there may be different ways and channels in different cases depending on the specific circumstances. Our firm has extensive experience in the investigation of infringement in various technical fields and evidence production for infringement and infringement profits. Please contact us if we can be of any help.

As the accused infringer, when receiving the evidence discovery order or being taken evidence preservation measures by the court in a patent infringement dispute case, he should not attempt to achieve the purpose of non-infringement judgment or mitigation of liability by failing to provide evidence or obstructing evidence production, but should seek maximum benefits for himself through means such as invalidation of the patent involved, non-infringement defense, reconciliation and negotiation with the right holder, etc. If the act of obstruction of evidence production is carried out, the consequence may not only be a presumption of establishment of infringement, the accused infringer being ordered to pay a large amount of compensation, the accused infringer may even be imposed of a judicial punishment.