| Against the backdrop of vigorously promoting the development of intellectual property rights and building a strong intellectual property nation in China,the number of patent applications and valid patents has dramatically increased.Alongside this growth,there has been a surge of patent-related infringement lawsuits flooding courts across the country,indicating an increasing awareness among patent holders to protect their rights.While some genuine right holders are actively combating infringement to safeguard their legitimate interests,there are also instances where patent holders exploit their patents for profit by initiating mass lawsuits,using the guise of justice to pursue unjust gains.Interestingly,the majority of these lawsuits target small-scale individual businesses,e-commerce platform operators,or individuals situated downstream in the transaction chain,with few involving large enterprises.These defendants often mount defenses based on the legitimacy of their sources,seeking to avoid liability for damages.However,in practice,courts do not frequently support the defense of legitimate sources,which are invoked by well-intentioned infringers.The lack of court support for such defense claims,due to various reasons,partially fosters an unhealthy trend among certain patent holders who engage in unjustified litigation,thereby adding pressure to the courts and increasing their caseload.Despite specific provisions in the Patent Law and relevant judicial interpretations,most of them are relatively broad and principle-based.This has led to challenges in aligning the defense of legitimate sources with the legislative spirit and objectives in China’s judicial practice.It also makes it difficult to strike a balance between the interests of patent holders and well-intentioned infringers,as well as to tackle upstream transaction entities that serve as the root cause of infringement.Therefore,in order to guide patent holders to pursue their rights with proper objectives,actively combat the sources of infringement,and strike a balance among the rights of patent holders,the legitimate interests of well-intentioned infringers,and the public interest,this article aims to discuss and provide suggestions and strategies in five aspects,thus navigating the challenges faced in judicial adjudication.The first part serves as the introduction,elucidating the background,significance,research objectives,and methods of the selected topic.Additionally,it provides a comprehensive review of relevant literature concerning the defense of legitimate sources,primarily encompassing the scope of this system,criteria for determining subjective and objective elements,the inclusion of upstream entities,and civil liability.The second part presents an overview of the defense of legitimate sources system,highlighting its legislative development and exploring the changes it has undergone in previous legislations.It investigates the reasons behind these changes and provides a brief analysis of the main components and subjective and objective elements of this system.The third part consists of empirical research,primarily focusing on the judicial practices of the defense of legitimate sources system in China,supported by a selection of representative cases from Guangdong Province,totaling 743 cases,spanning from January 2019 to July 2022.Supplementary analysis is also provided using landmark cases from the Supreme Court or other regions.Through data analysis and visualization,it is evident that defendants are typically small traders,individual businesses,or individuals operating downstream in the transaction chain,and the courts generally have a low rate of supporting their defense of legitimate sources.This is attributed to the courts’ high evidentiary requirements for the defense and the challenges faced by innocent infringers in establishing a complete chain of evidence.Additionally,the role of e-commerce platforms as defense entities presents unique circumstances.This chapter also focuses on the current situation and reasons behind certain patent holders resorting to mass litigation against the aforementioned entities for personal gain,highlighting their increased likelihood of receiving compensation and the low risks and costs associated with losing a lawsuit.Furthermore,the traditional dispute regarding whether innocent infringers should bear the reasonable expenses of rights holders was largely resolved in 2017.Even if the defense of legitimate sources is successful,it does not alter the nature of the infringing acts,such as sales and usage,nor does it exempt the infringer from the obligation to cease the infringement.They are still liable for the reasonable expenses incurred by the rights holder in preventing the infringement.The fourth part elaborates on the practical challenges of applying the defense of legitimate sources system in China’s current judicial practices,building upon the empirical research presented in the previous section.There are primarily two aspects to consider.Firstly,regarding the constitutive elements and burden of proof of the defense of legitimate sources,there are numerous discrepancies in practice.Particularly,there are uncertainties surrounding the subjective element of "unawareness," the allocation of the burden of proof,and the ambiguous standards of proof.Some regions have higher standards for proving the elements,while others have lower standards,potentially leading to divergent judgments in different jurisdictions and undermining the credibility of the judiciary.Secondly,the current judicial practices struggle to realize the intended fairness and order values inherent in the defense system.The system itself seeks to strike a balance between the rights holders and innocent infringers,but the low rate of support for the defense tilts the scales in favor of patent holders.This imbalance undermines the intended equilibrium and fairness between the parties involved.The fifth part addresses the current judicial situation,issues,and divergences concerning the defense of legitimate sources,and proposes some feasible recommendations.Firstly,in terms of determining the subjects,it is crucial to divide them based on the legislative spirit and values of the system,rather than mechanically following the legal provisions,considering the different circumstances at hand.Secondly,it is essential to clarify the provisions and evidentiary standards that often lead to disagreements regarding the subjective and objective elements.Additionally,it is necessary to introduce upstream producers or distributors based on the actual circumstances of the case to effectively combat the root causes of infringement.Furthermore,incorporating the system of unjust enrichment within the defense of legitimate sources can address the issue of benefits acquired by innocent infringers during the infringement period.Lastly,enhancing the cessation of infringement responsibility borne by innocent infringers and introducing other infringement liabilities based on the specific circumstances of the case can prevent instances of repeated infringement by certain innocent infringers. |
PDF Full Text Request