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Possible Exemption from the Infringement Liability? Find an Answer Here!


Author: Xiaolin WANG 

Article 25 of SPC’S Judicial Interpretation on Trial of Patent Infringment Dispute where products infringing a patent right are used, offered to sell, or sold for production or business purposes without knowing said products were manufactured and sold without the authorization of the patentee, and evidences are provided proving a legitimate source of the products, the People’s court shall support the right owner’s request to stop the above actions of using, offering to sell, or selling, with an exception that a user of the alleged infringing products provides evidences to prove that the user has paid a proper consideration for the product.

“Without knowing” mentioned in the first paragraph of this Article shall mean actually not knowing and should not have known.

“Legitimate source” mentioned in the first paragraph of this Article shall mean obtaining the products via a normal commercial manner like a legal sales source, a normal sales contract and so on. Regarding legitimate source, user, people offering to sell or seller shall provide relevant evidence that is in accordance with trading customs.

The provisions above further interpret about the Article 70 of the Chinese Patent Law.

First, the Article 70 of the Chinese Patent Law only provides the exception that the user, offer-to-seller and seller shall not be liable to compensate for the damage of the patentee. However, pursuant to the Article 11 of the Chinese Patent Law, the infringers above still have to cease the infringement acts. The provisions above further set the exception for such cease: the user of the alleged infringing products shall provide evidences that it has paid a proper consideration for the product.

Second, the second and the third paragraph give the standards regarding “without knowing” and “legitimate source”. “Without knowing” is negative fact and the alleged infringer is difficult in providing evidences. Thus, the complainant shall prove the alleged infringer “actually knows” or “shall know” and thus overturn the defendant’s defense. For example, if the complainant could prove the sale price or the purchase price is not the proper consideration as set forth in the first paragraph, the “without knowing” in the second paragraph shall not be established. Similarly, to fight against the defendant’s defense of “legitimate source”, it is necessary for the complainant to prior collect evidence about the normal commercial manner and trading customs in the field of the alleged infringing product.

Third, evidences such as proper consideration and trading customs may be utilized by the complainant, wherein the information of price, cost and etc. help to prove the benefit of the alleged infringer and plays a positive role in claiming the compensation for damages.