Judging whether the notice sent by the victim of the tort to the network service provider is effective and whether the network service provider has taken necessary measures upon receipt of such notice.

——Weihai Jiayikao Home Appliances Co., Ltd. v. Yongkang Jinshide Industry and Trade Co., Ltd. and Zhejiang Tmall Network Co., Ltd., a dispute over infringement upon patent for invention [1]

[Syllabus]

　　Where after a network user commits an infringing act by using network services, the victim of infringement issues a notice to the network service provider in accordance with the Tort Law and requires the network service provider to take necessary measures, if the notice includes identity of the victim of infringement, the ownership certificate, the website of the infringing party, and the preliminary evidence of the infringement fact, it is a valid and effective notice. The rules of complaint set by the network service provider may not affect the obligee to legally safeguard its legiminate rights and interests.

　　Necessary measures that shall be taken by a network service provider upon receipt of a notice as prescribed in paragraph 2, Article 36 of the Tort Law of the People’s Republic of China include but are not limited to deletion, blockage, and disconnection of the links. “Necessary measures” shall observe the principle of prudence and rationality and they shall be comprehensively determined according to the nature of the infringed right, the specific infringement circumstances, and the technical conditions.

[Case No.]

(2015) ZJZMCZ No. 148

[Cause of Action]

Patent Infringement Dispute

[Keywords]

     Civil; infringement upon patent for invention; effective notice; necessary measures; network service provider; joint and several liability

[Relevant Legal Provisions]

Article 36 of the Tort Law of the People's Republic of China

[Basic Facts]

　　The Plaintiff Weihai Jiayikao Home Appliances Co., Ltd. (“Jiayikao Company”) alleged that: without its licensing, Yongkang Jinshide Industry and Trade Co., Ltd. ( “Jinshide Company”) publicized and sold products infringing its patent (No. ZL200980000002.8) on Tmall and other network platforms, which constituted patent infringement; under the circumstance where Jiayikao Company filed a complaint against Jinshide Company for infringement, Zhejiang Tmall Network Co., Ltd. ( “Tmall Company”) failed to take any effective measures and it shall jointly assume the infringement liability with Jinshide Company. Jiayikao Company requested the court to order that, 1. Jinshide Company immediately cease the sale of the alleged infringing products; 2. Jinshide Company immediately destroy the alleged infringing products in stock; 3. Tmall Company delete all links to the alleged infringing products on Tmall; 4. Jinshide Company and Tmall Company jointly and severally compensate Jiayikao Company RMB 500,000; and 5. the litigation fee of this case be assumed by Jinshide Company and Tmall Company.

　　Jinshide Company contended that: it was just a seller, not a producer and the amount of compensation claimed by Jiayikao Company was excessive.

　　Tmall Company contended that: (1) as a trading platform, it was not the key operator engaged in the production or sale of the alleged infringing products or the seller of such products; (2) whether the products involved infringed upon the patent involved was uncertain; (3) whether the products involved were first to be used was also uncertain; (4) where evidence failed to prove that it was the infringing party, it lacked factual and legal basis for it to be jointly and severally liable for compensation of RMB 500,000; further, it has deleted the links to the products involved, and the claim of Jiayikao Company that all links to the infringing products shall be deleted was untenable.

　　After a trial, the court found that: on January 16, 2009, Jiayikao Company and its legal representative Li Jinxi jointly applied for a patent for invention for a product titled “infrared heating and cooking appliance” to the State Intellectual Property Office; on November 5, 2014, Jiayikao Company was granted the patent (No. ZL200980000002.8). It was recorded in the claims of the patent for invention that: “1. An infrared heating and cooking appliance, which has the following features: this infrared heating and cooking appliance includes: a bracket, in the upper central part, there is an axle hole and on one side, there is a switch for controlling power supply; a rotating disk that is heated once under infrared radiation, serving as a disc-shaped round container for containing food, and there is a removable ledge in the lower central part that may be inserted into the aforesaid axle hole; a holder, which is a longitudinal appliance on one side of the aforesaid bracket; a part of infrared radiation, which is located in the upper end of the aforesaid holder and once powered, it will launch infrared radiation to the aforesaid rotating disk; an oil drip pan, which is located in the aforesaid bracket and can be pulled out from the inner side; and axial oil outlets on the ledge of the aforesaid rotating disk.” On January 26, 2015, the patentee of the patent for invention involved was changed to Jiayikao Company. The annual fee of the patent involved has been paid to January 15, 2016.

　　On January 29, 2015, Beijing Shangzhuan Law Firm, the agency engaged by Jiayikao Company, filed an application for evidence preservation notarization with Beijing Haicheng Notarial Public Office. Under the supervision of the Notarial Public Office, the agents Wang Yongxian and Shi Yin logged onto the website of Tmall (http://www.tmall.com), bought a 3D BBQ grill at a price of RMB 388 from an online shop “Yixinkang Flagship Store,” and copied the business license of the operator of this online shop. On February 4 of the same year, under the supervision of the Notarial Public Office, Shi Yin received an express package with the addresser being “Yixinkang Flagship Store,” which included a 3D BBQ grill packaged in Korean, a gift, a hand-written receipt, and instructions and warranty card in Chinese. The notary notarized the whole process of evidence preservation and issued the notarial deed ((2015) JHCNMZZ No. 01494). On February 10 of the same year, Jiayikao Company entrusted Zhang Yijun, a person not involved in the case, with uploading complaint materials including the analysis report on patent infringement and the form of comparisons on technical features, to the intellectual property right protection platform of Taobao, but Taobao did not approve such materials finally. On May 5 of the same year, Tmall Company filed an application with Qiantang Notary Public Office of Hangzhou City, Zhejiang Province for evidence preservation notarization. Under the supervision of the Notary Public Office, its agent Diao Manli logged onto the website of Tmall (http://www.tmall.com) and searched “Yixinkang 3D BBQ Grill; Korean Household; Non-stick Electric Oven; Smoke-free BBQ Machine; Electric Baking Pan; Teppanyaki; Oven” in the “Yixinkang Flagship Store.” No commodity satisfying the conditions was available. The notary notarized the whole process of evidence preservation and issued the notarial deed ((2015) ZHQZNZ No. 10879).

　　In the court  trial of the first instance, Jiayikao Company claimed that Claim 1 in the patent involved shall be considered as the scope of protection in this case. After comparing the alleged infringing product with Claim 1 of the patent involved, Jiayikao Company held that, all technical features of the alleged infringing product fell within the scope of protection recorded in Claim 1 of the patent involved, except for the location of the switch, which may be changed by an ordinary technician in the field without any creative work and shall be considered as equivalent to that recorded in Claim 1. The two Defendants in the first trial raised no objection to the result of the comparison. Moreover, the court found that, Jiayikao Company paid notarization fee of RMB 4,000 and service charge of RMB 81,000 for this case.

　　[Holding]

　　Jinhua Intermediate People’s Court of Zhejiang Province entered a civil judgment ((2015) ZJZMCZ No. 148) on August 12, 2015 as follows: “I. Jinshide Company shall immediately cease the sale of the products infringing the patent (No. ZL200980000002.8); II. Jinshide Company shall compensate Jiayikao Company RMB 150,000 for its economic loss (including reasonable expenses paid by Jiayikao Company for stopping infringement) within ten days after the Judgment takes effects; III. Tmall Company shall bear joint liability for RMB 50,000 of the amount that Jinshide Company shall compensate as mentioned above; IV. Other claims of Jiayikao Company are rejected.” Tmall Company refused to accept the judgment made in the first trial and filed an appeal. However, Zhejiang Higher People’s Court entered a civil judgment ((2015) ZZZZ No. 186) on November 17, 2015, rejecting the appeal and affirming the original judgment.

　　[Reasoning]

　　According to the effective judgment of the court, since the parties to this case raised no objection to the fact that the features of the alleged infringing product fell within the scope of protection recorded in Claim 1 of the patent involved of Jiayikao Company, the original judgment that the behavior of Jinshide constituted patent infringement was correct. As for whether the behavior of Tmall Company shall constitute joint infringement, according to Clause 2, Article 36 of the Tort Law of the People’s Republic of China, where after a network user commits an infringing act by using network services, the victim of infringement shall have the right to send a notice to the network service provider and requires the network service provider to take necessary measures, including but not limited to deletion, block, and disconnection of the links. If, after being notified, the network service provider fails to take necessary measures in a timely manner, it shall be jointly and severally liable for any additional harm with the network user. The above provisions regulate the circumstances where the obligee sends a "notice" to the network service provider and requires the network service provider to take necessary measures after it finds that a network user commits an infringing act by using network services so as to prevent additional damage and specifically specify the scope of obligations and the composition of liabilities that the network service provider shall assume under such circumstances. In this case, whether the behavior of Tmall Company shall constitute an infringement shall be determined based on several factors such as the nature of Tmall Company, the effectiveness of the “notice” sent by Jiayikao Company, whether Tmall Company shall take measures upon receipt of the "notice" from Jiayikao Company, and the necessity and timeliness of the measures taken.

　   Firstly, Tmall Company holds the Value-added Telecommunication Services License by law and is a network service provider on an information publishing platform. In this case, it provides network services for “Yixinkang Flagship Store” operated by Jinshide Company to sell the alleged infringing product involved and satisfies the requirements for a network service provider as specified in paragraph 2, Article 36 of the Tort Law of the People’s Republic of China.

　　Secondly, Tmall confirmed in the court trial of second instance that, on February 10, 2015, Jiayikao Company entrusted Zhang Yijun, a person not involved in this case, with uploading complaint materials including the links to the product complained, the analysis report on patent infringement and the form of comparisons on technical features, to the intellectual property right protection platform of Taobao, and Tmall Company could find out which product was complained about and who the complaint was reported against based on such materials.

　　The determination of whether the network service provider is at fault and whether the network service provider shall be jointly and severally liable for additional damages caused by the infringement shall be based on the “notice” referred to in Clause 2, Article 36 of the Tort Law of the People’s Republic of China. “Notice” refers to a notice sent by the victim of infringement after a network user commits an infringing act by using network services to require the network service provider to take necessary measures and prevent further infringement. The "notice" may be oral or written. Generally, the “notice” shall include materials such as the identity of the obligee, the ownership certificate, the preliminary evidence of the infringement fact, and the website of the alleged infringing party. If a notice satisfies the above requirements, it shall be deemed effective and valid. The notice sent by Jiayikao Company complies with the requirements for the “notice” as specified in the Tort Law and shall be deemed valid and effective.

　　Thirdly, upon investigation, Tmall did not approve complaint materials of Jiayikao Company and gave the following reasons for such disapproval in the reply: please detail the technical features of the product involved that are covered by your patent in the Analysis and Comparison Sheet on the Infringement upon the Patent for Utility Model and Invention (II); a combination of pictures and text is recommended. (Note: the comparison shall be made with pictures and text in the commodity information published by the seller). You also need to provide the purchase order number or the user name of the parties involved.

　　It is held by the court of second instance that, it is difficult to judge the infringement upon the patent for invention or utility model based on the conditions or written documents, so the obligee generally may only provide the complaint materials such as the identity of the obligee, name and number of the patent, the product in question and the other party, so that the receiver of the complaint can inform the other party. In this case, the complaint materials provided by Jiayikao Company included all the materials above-mentioned. As for comparison and analysis report, on the one hand, Tmall Company believed that it only had limited ability to judge whether the product sold by the seller infringed the patent for invention; one the other hand, it required Jiayikao Company to “detail the technical features of the product involved that are covered by your patent; a combination of pictures and text is recommended”. The court held that, considering the huge number of complaints and the complexity of complaints in the internet field, it was reasonable for Tmall to make this request for its own interests and such behavior could help Tmall make preliminary judgment on the nature of the alleged infringement and take measures accordingly. But for the obligee, the above requirements of Tmall Company was not essential for the notice sent by the obligee to be valid and effective. Moreover, Jiayikao Company provided in the complaint materials a five-page form of comparison on technical features including pictures and text but Tmall Company still replied in an inflexible manner and took the comparison on technical features as a reason for disapproval, which was improper. As for the disapproval from Tmall Company and the request of Tmall Company for providing the purchase order number or user name of the parties involved, the court held that, whether Jiayikao Company provided the purchase order number or user name of the parties involved would not affect the validity and effectiveness of the complaint. In addition, the rules of complaint set by Tmall Company shall not be legally binding upon the obligee and the obligee may safeguard its rights in accordance with law and could, for its own interests, decide whether to accept such rules or not. Moreover, the obligee may not purchase the product involved but provide other evidence to prove the alleged infringement such as others’ purchase; even the obligee directly purchased the product involved, it may refuse to provide relevant information for the purposes of safeguarding its economic interests or trade secret.

　　Lastly, necessary measures that shall be taken by a network service provider upon receipt of a notice as prescribed in paragraph 2, Article 36 of the Tort Law of the People’s Republic of China include but are not limited to deletion, blockage, and disconnection of the links. “Necessary measures” shall be comprehensively determined according to the nature of the infringed right, the specific infringement circumstances, and the technical conditions.

In this case, after determining that the complaint reported by Jiayikao Company was valid and effective, the court needed to judge whether the handling of complaint materials by Tmall Company was prudent or reasonable. The court held that, this case involved a dispute over infringement upon patent for invention. Considering its subjective judgment on infringement upon patent for invention, the possibility of the complaint being recognized and balance of interests as well as other factors, Tmall Company, as a provider of e-commerce network service platform, was not required to immediately delete or block the product involved after receipt of complaint; the taking of necessary measures against the product involved shall comply with the principle of prudence and rationality so as to prevent the lawful rights and interests of the party complained. However, one of the necessary measures that Tmall Company shall take was transferring effective complaint materials to the party against whom the complaint is filed and requiring it to defend itself. Otherwise the complaint of the obligee would be meaningless and may not be successfully handled. The network service provider shall ensure the smooth exchange of effective complaint information and shall not just leave complaints aside. The party complained will make judgment on whether the products owned, produced or sold by itself infringe upon others’ rights and whether it shall voluntarily stop the alleged infringement, and take measures accordingly. However, the party against whom the complaint is filed did not receive any warning due to Tmall Company’s failure to perform the above obligations and additional damages were caused. The deletion and blockage of the product involved by Tmall Company after Jiayikao Company filed a lawsuit shall be deemed to be prudent and reasonable. In conclusion, as, after being notified by Jiayikao Company, Tmall Company failed to take necessary measures in a timely manner, it shall, together with Jinshide Company, be jointly and severally liable for any further damages. The grounds of appeal of Tmall Company shall not be established. As for the liability that Tmall Company shall assume, it was not inappropriate for the court of first instance to determine that Tmall shall be jointly and severally liable for paying RMB 50,000, the amount that Jinshide Company is liable for compensation, by taking comprehensive consideration of the duration of the infringement and the time when Tmall Company shall be aware of the infringement.