Xianhua SHEN
Chinese Patent Attorney
Attorney-at-Law
Wei Chixue Law Firm

 
In patent infringement litigation cases in China, the acquisition of evidence is often crucial to the success of the litigation. Usually, according to the principle that “the proof lies upon the one who affirms”, evidence of patent infringement is collected by the plaintiff himself or herself, including fixing the evidence of the alleged infringement by means of notarization. For example, the plaintiff may collect the evidence of infringement by purchasing infringing products, having web pages notarized or carrying out notarization at exhibitions. However, in some patent infringement cases involving business-to-business transactions or production methods for example, it is often difficult for the plaintiff to obtain evidence through lawful and conventional means due to, for example, the limitations of the trading parties or the non-public nature of the alleged infringing method. In such cases, the plaintiff may apply to the people’s court for the preservation of evidence if he or she can prove that there is a risk that the evidence may be lost or difficult to obtain at a later date¹.

While hearing an application for preservation of evidence, the court will comprehensively consider factors including the relevance between the preliminary evidence on which the application for preservation of evidence is based and the facts of the case to be proved, and the necessity and feasibility of preservation of evidence to make a judgment². Specifically, the court assesses the following four key factors: whether the applicant has presented prima facie evidence for his or her claim, whether the evidence could be collected by the applicant himself or herself, the likelihood that the evidence will be lost or become difficult to obtain at a later date and the impact of the absence of the evidence on the proof of the facts to be proved, and the impact of possible preservation measures on the holder of the evidence³. If any of these factors is not adequately supported, the application may be rejected. In addition, the court will require the applicant to provide an appropriate guarantee if the measures to preserve the evidence are likely to cause a loss of the holder of the evidence to be preserved⁴. The application for preservation of evidence should be filed in writing before the expiration of the time limit for adducing evidence⁴. The court usually decides whether to approve the application for preservation of evidence by a written ruling, while in some cases the court may make an oral ruling.

In the process of preservation of evidence, the court may take a variety of measures, including producing on-site investigation records, drawings, photographs, audio and video recordings, or duplicating technical design documents⁵. These measures are implemented on the principle of minimizing damage to the subject matter of the preservation and avoiding undue interference with the normal business operations of the holder of the evidence. In view of the technical complexity of preservation of evidence, the court may invite a technical investigator to participate in the preservation process to ensure that technical issues are handled professionally. However, in consideration of conflict of interest or commercial secret protection, the applicant is usually not allowed to enter the site of the preservation, but may be required by the court to make preliminary preparations or provide limited support during the preservation process.

If the holder of evidence refuses to cooperate or obstructs the preservation of evidence without a justifiable reason and consequently makes it impossible to preserve the evidence, the court may decide that the holder of evidence bears adverse consequences⁶. Under the condition that the preservation measures have been taken, if a party dismantles the evidentiary items, tampers with the evidentiary materials or commits other sabotage acts without authorization, resulting in the invalidity of the evidence, the court may presume a finding against the party based on these acts⁷.

After the closure of the case, if the court ultimately rules that no infringement is constituted but the measures for preserving the evidence have caused a loss of the holder of the evidence, the applicant may be liable for the loss caused. Such loss may be compensated for by the applicant from the guarantee that the applicant previously provided. However, if the defendant accuses the plaintiff of litigating maliciously claims compensation for his or her losses on the mere grounds that no infringement has been constituted, the court generally will not support the claims of the defendant, believing that the litigation is a normal action of a patentee in the enforcement of his or her rights.

In the light of the following judicial precedents, the application for and hearing of preservation of evidence, the implementation of preservation of evidence, the consequences of obstructing preservation of evidence, and the compensation for losses caused by preservation of evidence will be specified.

1. Application for and hearing of preservation of evidence

In order to satisfy the four key factors of an application for preservation of evidence, the applicant is required to provide the court with prima facie evidence relating to the alleged infringement, demonstrate the objective fact that it is difficult to collect the evidence by himself or herself, and explain that there is a risk that the evidence may be lost or difficult to obtain at a later date. In addition, the applicant may provide a guarantee according to the circumstances of the case, so as to increase the possibility of the court supporting the preservation of evidence.

1.1 Relevance requirement of prima facie evidence

As prima facie evidence of infringement, the applicant does not need to fully prove the fact of infringement. Instead, the applicant needs only to prove that there is a strong correlation between the holder of the evidence and the fact of the alleged infringement. The prima facie evidence could be photos, videos, or descriptive materials reflecting part of the construction or steps of the infringing object, or evidence showing that the holder of the evidence may have participated in the infringement.

In the case of a dispute between Zhejiang Tunnel and Bridge of China Corrugated Steel Plates Co., Ltd. (hereinafter referred to as CTB) and companies including Zhengzhou Hengtian Dajian Bridge Steel Structure Co., Ltd. (hereinafter referred to as Hengtian) over infringement of a patent for invention, the court supported CTB’s application for preservation of evidence on the grounds that CTB had provided information on the shape and specifications of corrugated steel plates disclosed on the website of Henan Dajian Corrugated Steel Plates Co., Ltd. (hereinafter referred to as Dajian), which clearly indicated that the alleged infringing product had some technical features including the “corner unit” defined in the claims of the patent involved. In addition, CTB further provided the construction contract proving that Hengtian and Dajian were closely related to the alleged infringement².

In the case of a dispute between Jiangxi Lanxiang Heavy Industry Co., Ltd. (hereinafter referred to as Lanxiang) and Jiangxi Siton Machinery Manufacturing Co., Ltd. (hereinafter referred to as Siton) over infringement of a patent for utility model, the court supported Lanxiang’s application for preservation of evidence. The court found that the technical solution claimed by the patent involved and the alleged infringing product are similar products. According to the photos taken on site as evidence and attached to the notarial certificate provided by Lanxiang, despite of the technical features such as the configuration and the operating mode of the locking mechanism and the hydraulic motor of the patent involved which were not fully manifested in the notarial certificate, other features in the claims of the patent involved had all been reflected in the photos⁸.

In an anonymous case A of preservation of evidence, in which the author participated on behalf of the applicant, the applicant submitted the product manual and promotional video of the alleged infringing product along with a comparison of features based on these materials to demonstrate that there was a high degree of similarity between the alleged infringing product and the claims of the patent involved. Finally, the court approved the application for preservation of evidence.

In contrast, if the applicant fails to provide sufficient prima facie evidence, the court will probably not support the applicant’s application. For example, in the case of a dispute between an individual surnamed YE (hereinafter referred to as YE) and companies including an electronics company in Hangzhou over infringement of a patent for utility model, the court did not support the application for preservation of evidence on the grounds that YE’s judgment on infringement was based on his subjective speculation about the bidding documents and that YE failed to submit prima facie evidence that could prove the fact of infringement⁹.

In the case of application for pre-suit preservation of evidence for patent infringement dispute between Catalytic Distillation Technologies (hereinafter referred to as CDTECH) and Shanxi Huahaoxuan New Energy Resources Technology Co., Ltd. (hereinafter referred to as Huahaoxuan), the court supported CDTECH’s application for preservation of evidence by taking photos of the entire structure of the apparatus used in Huahaoxuan’s alkylation project, but did not support the application for preservation of evidence by producing duplicates of the design and construction contracts of the alkylation project because CDTECH had failed to present evidence to establish that these contracts were directly related to the judgment of infringement¹⁰.

1.2 Impossibility of collecting evidence by the applicant himself or herself

For evidence that can be collected by normal means by the applicant himself or herself, the applicant should not apply for preservation of evidence, because such evidence does not fall into the category of “evidence difficult to obtain”.

In the case of application for pre-suit preservation of evidence for patent infringement dispute between CDTECH and Huahaoxuan, another reason why the court did not support the application for preservation of evidence by producing duplicates of contracts was that there was no difficulty in obtaining the evidence, as the contracts had already been on file with the relevant departments and could be obtained by the applicant through the normal procedure¹⁰.

Similarly, in the case of application for pre-suit preservation of evidence for a dispute between Chongqing Regal Automobile Parts Co., Ltd. and Chongqing Shunfeng Automobile Parts Co., Ltd., the automatic gear shifter involved in the case had been widely used in vehicle models sold on a large scale in the market, that is, the evidence could be collected by the applicant himself or herself, and it is unlikely that the evidence would be lost or difficult to obtain at a later date, so the application was not in line with pertinent provisions in law¹¹.

Usually, an application for preservation of evidence is only likely to be supported by the court if the applicant is unable to obtain the evidence despite the exhaustion of reasonable and lawful means of obtaining it. The applicant is required to explain the reasons for not being able to obtain the evidence, taking into account the characteristics and nature of the evidence to be preserved, as well as objective factors such as the trading manner.

For example, in the case of the patent infringement dispute between CTB and the companies including Hengtian, the court recognized that the alleged infringing product was not daily consumer goods or general industrial raw material that could be easily obtained through market transactions or the like, and that it was difficult for CTB, which was neither the bidding entity nor the construction party, to have access to the product through normal and legal channels².

In the case of the patent dispute between Lanxiang and Sition over infringement of patent for utility model⁸, although Lanxiang managed to enter the Jiulong mining area to carry out preservation of evidence by means of notarization and took on-site photos of the alleged infringing product as evidence, some technical features were not reflected in the photos due to the large volume and immobile state of the product; moreover, Lanxiang had no right to request for the assistance of Jiulong mine in further evidence collection. Under such circumstances, Lanxiang applied for preservation of evidence, which was supported by the court.

In the afore-mentioned case A, the applicant applied for preservation of evidence on the grounds that the alleged infringing product is gigantic and costly, which made it impossible to obtain relevant evidence through notarized purchase, and that it is impossible for the applicant to enter the respondent’s factory to collect the evidence. Finally, the court approved the application for preservation of evidence.

The object of evidence preservation is not limited to large items, but can also be small items that the applicant is unable to collect by himself or herself. In the case of a dispute between Wanjun CHEN and Yansi CHEN over liability for damage caused by maliciously filing an intellectual property lawsuit, the object of evidence preservation performed by the court was a small electric mosquito swatter¹².

1.3 Urgency of preservation of evidence

Urgency is one of the key considerations when applying for preservation of evidence, mainly due to the risk that evidence may be lost or difficult to obtain at a later date. Such risk includes the possibility that the evidence may perish or deteriorate or be transferred, destroyed, or concealed, or that it may be difficult to fix, take or examine the evidence at a later date due to changes in the objective storage environment or conditions⁸.

In the case of the patent infringement dispute between CTB and the companies including Hengtian, the project involved was in the process of construction. Once the construction was completed, it would be impossible to measure the technical characteristics, such as the thickness, of the alleged infringing product from the outside without destructive dismantling. Therefore, it is indeed urgent to apply to the court to preserve the alleged infringing product in the construction process of the project involved².

In the case of the patent infringement dispute between Lanxiang and Sition, once the alleged infringing product was transferred from the above-ground Jiulong mining area to the coal mine shaft, further comparison of the relevant technical features between the alleged infringing product and the patent involved which was potentially desirable at a later date would require going deep into the underground, which would inevitably and significantly increase the difficulty in making such comparison⁸.

In the case of application for pre-suit preservation of evidence between Guangdong Hongchuan Huanyu Intelligent Equipment Co., Ltd. (hereinafter referred to as Huanyu) and a company in Wenzhou, the court found that the respondent’s infringing product was important evidence in this case and was being showcased at an exhibition, so the situation was very urgent. If the preservation of evidence was delayed, the evidence would be lost and the legitimate rights and interests of the applicant would be irreparably damaged¹³.

In the case of application for pre-suit preservation of evidence between Tianlixin Technology Co., Ltd. in Pengjiang Distract, Jiangmen City (hereinafter referred to as Tianlixin) and Linhai Dongli Optoelectronics Co., Ltd. (hereinafter referred to as Dongli), the court discriminated the applicant’s requests involving different categories of evidence. Specifically, the court approved the applicant’s application for preservation of the respondent’s alleged infringing product and production equipment, but did not approve the applicant’s application for preservation of materials such as the customer orders, inventory lists, export declaration forms, promotional brochures, which might involve trade secrets or was not likely to be lost or was not difficult to obtain at a later date¹⁴.

In judicial practice, the court examines the necessity of act preservation with strict scrutiny of the urgency. However, for the preservation of evidence, in order to solve the problem of difficulty in producing evidence, the examination of the “urgency” is less stringent. When it can be preliminarily proved that the alleged infringement is very likely in existence and constituted, and the plaintiff objectively has made every effort to adduce evidence but still has difficulty in obtaining sufficient evidence, the court is usually inclined to approve the plaintiff’s application for preservation of evidence. Of course, the likelihood of the plaintiff’s application being approved would be increased by a further explanation of the urgency.

1.4 Impairing effects of preservation measures

In considering an application for preservation of evidence, the court will take into account the impact of the preservation measures on the evidence and the normal production and operation of the holder of the evidence, and then decide whether or not to take preservation measures. Whether a guarantee should be deposited and the required amount of the guarantee vary from court to court. Specifically, the strictest courts require a guarantee in an amount equal to the subject matter of the action, without regard to the specific measures of preservation and the possible damages, while for more lenient courts, it is acceptable that the plaintiff elaborates the maximum losses that the preservation of evidence may cause to the defendant and provides a corresponding guarantee. The applicant may even be exempted from providing a guarantee if the preservation measures will not cause damages to the object to be preserved or affect the production and operation of the respondent. It is necessary for the applicant to explain in detail in the application the impact of the preservation of evidence and, in particular, how to minimize the impact. Although the expression “no impact” or “minimal impact” is the most favorable to the applicant, if objectively there is a great impact, the applicant should make a truthful statement and take the initiative to provide a corresponding guarantee as appropriate. Taking the initiative to provide a guarantee is also conducive to the court’s confidence in the feasibility of preservation measures.

In the case A in which the author participated, the applicant not only explained that the preservation of evidence would not cause damage to the respondent, but also offered to provide a guarantee. In the application, the applicant clearly stated that the preservation of evidence was limited to on-site investigation, image capturing and video filming of the alleged infringing product, and would not deteriorate the functions of the product, and that even if the preservation measures failed, there would be no actual loss to the respondent. In addition, the applicant took the initiative to submit a letter of guarantee with an insurance amount of CNY 3,000,000, which was equal to the amount of compensation in the litigation claim, so as to ensure that even if the preservation measures caused losses to the respondent, the guarantee amount would be sufficient to make up for them.

Conversely, if the applicant fails to provide a guarantee or if the amount of the guarantee provided is manifestly inadequate, the court may reject the application for preservation of evidence. In the case of a dispute between Wenlin REN and Mercedes-Benz over infringement of a patent for invention, REN’s reasons for filing an application for preservation of evidence were not applicable to preservation of evidence, and REN could only provide a guarantee of no more than CNY 10,000 for the subject matter valued at more than one million yuan, which did not meet the guarantee requirements for preservation of evidence¹⁵.

Similarly, in the case of a dispute between Hefei Pengfeng Building Materials Co., Ltd. (hereinafter referred to as Pengfeng) and Hefei Dongtang Scaffold Co., Ltd. (hereinafter referred to as Dongtang) over infringement of a patent for utility model, the court required Pengfeng to provide a guarantee according to the amount of the subject matter of the action, but Pengfeng refused to provide a guarantee on the grounds that the value of the evidence to be preserved was small. The court rejected the application for preservation of evidence¹⁶.

In the case of second instance of a dispute between Jiangsu Hongxin Revolving Compensator Technology Co., Ltd. (hereinafter referred to as Hongxin) and companies including Jiangsu Yuantong Corrugated Pipe Co., Ltd. (hereinafter referred to as Yuantong) over infringement of a patent for invention, Hongxin was only willing to provide a guarantee fee of CNY 200,000 for the revolving compensator and for the direct expenses incurred in the process of disassembly, installation and examination of the revolving compensator, which was obviously lower than the losses that the respondent might suffer due to the implementation of evidence preservation measures. The court rejected Hongxin’s application for a comparison by dismantling the alleged infringing product on the grounds that the amount of guarantee was insufficient¹⁷.

If the damage caused by the preservation of evidence is too great or irreparable, the court will directly reject an application for preservation of evidence accordingly. In the case of second instance of a dispute between Hongxin and the companies including Yuantong over infringement of a patent for invention, the steam pipeline project involved had already been formally accepted and put into operation. If the pipeline was dismantled, it would cause irreparable damage to the production and operation of the respondent and the related users. Therefore, the court, after comprehensively considering the prima facie evidence provided by the applicant, the characteristics of the preservation measures, the situation at that time, and the amount of the subject matter of the action, rejected Hongxin’s application to stop the gas and dismantle the pipe to carry out the investigation.

2. Implementation of preservation of evidence

2.1 Means of implementation

During the process of preservation of evidence, the applicant may request the employment of multiple means of preservation to ensure comprehensiveness of the preservation of evidence and increased likelihood of a successful comparison in determination of infringement. The court may support the employment of all or some of the means. For example, in the case of application for pre-suit preservation of evidence between Tianlixin and Dongli, the applicant requested that the equipment be preserved by means of producing on-site investigation records, taking photos, filming videos, making an inventory, taking or sealing up samples, and the like, but the court only approved some of the means such as making an inventory and taking photos¹⁴.

What specific means is adopted by the court depends on the complexity of the case and the type of the evidence. While safeguarding the preservation of evidence, the court will minimize the disruption to the respondent’s production and operation.

For example, in a case of preservation of evidence involving mining equipment, considering that the alleged infringing equipment was the main equipment for the defendant’s production and operation, if the equipment was attached or seized, it would seriously affect the defendant’s production and operation. Therefore, the court decided to collect and fix the evidence by taking photos and filming videos for example, so as to mitigate the impact on the defendant’s production and operation¹⁸.

Similarly, in a case of a dispute between a machinery manufacturing company and companies including a book and periodical machinery company over infringement of a patent for invention, the court preserved the evidence without stopping the operation of the machine, which not only effectively solved the problem of the patentee’s difficulty in presenting evidence, but also minimized the impact of the preservation measures on the production and operation of the enterprises involved¹⁹.

When necessary, the court carries out preservation of evidence in the form of seizure or attachment. In the case of application for pre-suit preservation of evidence between Huanyu and the company in Wenzhou, the high-speed packaging machine exhibited by the respondent at ProPak China was seized and attached by the court¹³. In addition, in the case of application for special procedures for pre-suit preservation of evidence between INA Intelligent Technology (Zhejiang) Co., Ltd. (hereinafter referred to as INA) and Fuzan Garment Co., Ltd. in Haishu Distrcit, Ningbo (hereinafter referred to as Fuzan), the court photographed, videoed, and closed down the alleged infringing garment production line²⁰. In the case of a dispute involving Tsinghua University and companies including NUCTECH over infringement of a patent for invention, because the court was unable to enter the plant to implement preservation of evidence, the court sealed off the gate of the plant in accordance with the law and prohibited unsealing it without permission, making it possible for subsequent entry into the plant for preservation of evidence²¹.

2.2 Assistance from the applicant and the technical investigator

The complexity, limitations, and uncertainties of the evidence preservation site and the professionalism required in the comparison for the determination of infringement may increase the difficulty of preservation of evidence and may easily lead to failure. In order to improve the success rate, the court may need the assistance of the applicant or the technical investigator before or during the implementation of preservation of evidence.

In the preparatory stage of preservation of evidence, the applicant needs to explain the location of the evidence, the type and structure of the evidence, the purpose of preservation, the steps of preservation, and the like. If necessary, face-to-face communication should be made with the judge. In a case B of preservation of evidence in which the author participated on behalf of another applicant, before the preservation of evidence, the author visited the judge to elaborate on the technical solution of the invention involved and the technical details of evidence comparison, and conducted several telephone communications thereafter. On the day of preservation, the author and the technicians from the applicant’s side communicated with the judge about the details of the preservation steps outside the preservation site.

In a case C of preservation of evidence in which the author participated on behalf of yet another applicant, the author and the applicant’s staff went to the evidence holder’s plant to gather information before implementation of the preservation, and found that the evidence holder’s address had been changed, making it possible to determine the new actual place of preservation and avoid the risk of failure of preservation.

In order to protect the trade secrets of the alleged infringer, the court may require the applicant and his or her litigant participants to sign a confidentiality undertaking letter, promising to keep confidential the trade secrets learned during the litigation to maintain the balance of interests of both parties²². In most cases, the applicant does not have access or only has restricted access to the preservation site. For example, in the case A, only the judge was allowed to enter the site at first. Later, the author, as the applicant’s attorney, was allowed to enter the site, but was only permitted to check the production line accessories that were no longer in use, and to engage in a limited confrontation with the respondent. In the end, the author was unable to enter the workshop to check the production line that the respondent was manufacturing.

In the case C, the holder of the evidence asked the author to leave his office on the grounds of trade secrets, but the judge told the author to wait outside the office. During the preservation of evidence, the judge and the technical investigator came out of the office several times to ask the author for confirmation as to whether the preservation steps were appropriate and whether the object of preservation was correct.

In some cases, due to the complexity of the technology, the involvement of the technical investigators is crucial. In the case C, the technical investigator participated in the preservation of evidence throughout the case, assisted the judge in selecting the target drawings from hundreds of production line design drawings, photographed a large number of details closely related to the case, and played a decisive role in the smooth progress of the case.

3. Consequences of obstructing preservation of evidence

The preservation of evidence usually means a certain loss of interest for the holder of evidence and may even lead to the solidification of the fact of infringement. Although most people will cooperate with the preservation of evidence under the deterrence of the law, there are still a few who are unwilling to cooperate or even obstruct the preservation. Such behavior will not only lead to the legal consequences of established infringement, but may also lead to criminal responsibility²³.

When the holder of evidence refuses to provide the evidence without justified reasons, the court may presume a finding against the holder of the evidence in accordance with the rule of obstruction of evidence²⁴. For example, in the case of intellectual property dispute between Zhejiang Mingyuan Craft & Jewelry Co., Ltd. (hereinafter referred to as Mingyuan) and Shiyong LI, because the defendant refused to cooperate, the court was unable to preserve the evidence, making it impossible to conduct trial comparison. Therefore, the court presumed that the rhinestone processing method used by the defendant infringed the patent right of the invention involved²⁵.

During the preservation process, the court will minimize the damage to the value of the subject matter of the preservation and the impact on the normal production and operation of the holder of evidence. Therefore, the court often prefers non-damaging means of preservation, such as taking photos and filming videos, and may require the holder of evidence to refrain from dismantling or tampering with the evidence, or engaging in other destructive behavior, for the purpose of comparing the infringing features with the patent involved²⁶. If the evidence cannot be used because of the obstruction of preservation of evidence, the holder of evidence will suffer adverse consequences.

For example, in the case of a dispute between Cuiying HAN and Gaizhou Zhongling Silk Co., Ltd. (hereinafter referred to as Zhongling) over infringement of a patent for utility model, the court required the respondent not to disassemble or tamper with the relevant parts of the cocoon boiling and bleaching device in order to preserve the evidence as it was²⁶.

In the case of the patent infringement dispute between Tsinghua University and companies including NUCTECH, the court informed the defendant of the obligation to properly preserve the seized product and the related legal consequences prior to the examination of the evidence. However, the defendant still dismantled and destroyed the preserved product parts without authorization, claiming that the dismantled product was different from the patented technology, which hindered the infringement comparison. The court found that the defendant had refused to provide evidence without justifiable reasons, and therefore presumed that the product used by the defendant fell within the scope of protection of the patent involved²¹.

In the case of a dispute between Qingdao Hanze Electric Co., Ltd. (hereinafter referred to as Hanze) and Shenyang Sky Air-Ship Digital Printing Equipment Co., Ltd. (hereinafter referred to as Sky Air-Ship) over infringement of a patent for invention, Hanze disposed of the preserved evidence without notifying the court of original trial. The court held that Hanze should bear the corresponding adverse consequences²⁷.

4. Damages for preservation

Where the preservation of evidence successfully supports the establishment of a fact of infringement, there is usually no need to consider the damages caused by preservation. However, when, for example, no infringement is constituted or the infringement action is withdrawn, if the preservation results in damages, the holder of evidence can claim compensation within reasonable limits²⁸. However, it should be noted that the preservation of evidence cannot be easily recognized as an act of malicious prosecution simply because no infringement is constituted.

The court is strict in its determination of malicious prosecution. Only when a party files a lawsuit and causes damages to the other party while being fully aware that his or her lawsuit lacks a basis in rights or a factual basis or knowing that the accused infringer does not constitute an infringement but still, can the action of the party be deemed to constitute malicious prosecution. A finding that no patent infringement is constituted does not necessarily indicate that the malicious prosecution is intended. The determination as to whether patent infringement is constituted requires professional and complex judgment, that is, it is difficult for the patentee to make a determination at the beginning of the lawsuit. It is unreasonable to require the patentee to make an accurate determination on complex professional issues at the time of filing the lawsuit, and it is also unreasonable to inversely infer, simply from the result of the patentee losing the lawsuit, that the patentee knows at the time of filing the lawsuit that he or she lacks a basis in rights or a factual basis²⁹.

For example, in the case of a civil application for retrial of a dispute between a company in Jiangsu and companies including a textile company over liability for damage caused by maliciously filing an intellectual property lawsuit, the court did not support the view of the company in Jiangsu that the textile company conducted malicious prosecution, and held that preservation of evidence was a part of the textile company’s patent infringement litigation, and no errors were found in the preservation measures, and that the company in Jiangsu failed to provide sufficient evidence to prove that the preservation measures would cause corresponding losses³⁰.

In the case of a dispute between Dongguan Longxingsheng Machinery Co., Ltd. (hereinafter referred to as Longxingsheng) and Zili CHEN over liability for damage, Zili CHEN’s application for preservation of evidence led to the sealing up of Longxingsheng’s slotting machine on exhibition. Later, the patent involved in the case was invalidated, and Longxingsheng demanded compensation for damages. The court decided that Zili CHEN should pay Longxingsheng CNY 10,000 for the loss of the value of the preserved machine, and compensate Longxingsheng CNY 20,000 for the loss of the exhibition booth fee³⁰.

Conclusion

From the publicly available cases as well as our firm’s practical experience, Chinese courts on the whole take a positive attitude towards preservation of evidence when handling patent infringement cases. The courts hope to help the patentees to overcome “difficulty in providing evidence” through preservation of evidence, which demonstrates the support of the judicial system for the protection of intellectual property rights. However, it is worth noting that “the proof lies upon the one who affirms” is still the basic principle of patent infringement cases, the patentee has the burden of proof, and the court is usually neutral and will not easily make a decision to the detriment of a party’s interests.

There are a number of conditions that need to be met for the preservation of evidence to be implemented, including conditions that there is a likelihood of infringement, that the patentee is unable to obtain the evidence despite exhaustion of other means, that there is the urgency due to the fact that the evidence will be lost or inaccessible, and that no irreparable harm will be caused to the respondent. It is only under these conditions that the court may further consider other factors to decide whether or not to carry out preservation of evidence. Although the court does not compel the applicant to provide a guarantee, the applicant’s initiative to provide a guarantee often increases the likelihood of the application being approved.

As long as the patentee carries out litigation acts within the normal range, including applying for preservation of evidence, can reasonably anticipate the possible damages caused by the preservation, and takes the initiative to provide a guarantee, there is usually no need to worry too much about being accused of malicious prosecution or compensating for excessive damages. With respect to the manner in which the guarantee is provided, a common practice that does not impose a great burden on the patentee is to seek a letter of guarantee from an insurance company, with a premium rate generally ranging from four ten-thousandths to three thousandths, depending on the circumstances and the subject matter of the case.

Although there are multiple factors affecting the approval for preservation of evidence, these factors are not prerequisite in every case; and the examination of an application for preservation of evidence by judges typically involves a certain degree of subjectivity and discretion. Even in the same case, different judges may hold different views. For example, although the applications for preservation of evidence in the cases A, B and C, in which the author participated, were all approved by the court, in the second instance of one of these cases, a senior judge was surprised at the approval of the application for preservation of evidence by the court of first instance, which showed the difference in decision-making by different judges.

From the perspective of the respondent, counteracting the preservation of evidence may lead to serious consequences, and therefore the application for preservation of evidence should be approached rationally to avoid unlawful obstructive behavior. Rather than challenging the court’s measures, it is better for the respondent to cooperate within the legal limits and to defend himself or herself in lawful proceedings. If no infringement is constituted, the respondent still has the opportunity to seek compensation for the damages caused by the preservation through legal means, so as to avoid a passive situation.

To sum up, preservation of evidence is an important means for patentees to produce evidence, but they need to be careful in applying for it and make reasonable estimation and arrangement according to the specific circumstances of the case. In the practice of patent litigation in China, although preservation of evidence is not easy, it is still an effective tool for patentees to protect their legal rights.

____________________________________________________________________________________________

1 Article 84 of Civil Procedure Law of the People’s Republic of China (Amended in 2023)
2 (2020) SPC IP Civil Final No. 2
3 Article 11 of Several Provisions of the Supreme People’s Court on Evidence in Civil Procedures Involving Intellectual Property Rights
4 Article 98 of Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of the People’s Republic of China (Amended in 2022)
5 Article 12 of Several Provisions of the Supreme People’s Court on Evidence in Civil Procedures Involving Intellectual Property Rights
6 Article 13 of Several Provisions of the Supreme People’s Court on Evidence in Civil Procedures Involving Intellectual Property Rights
7 Article 14 of Several Provisions of the Supreme People’s Court on Evidence in Civil Procedures Involving Intellectual Property Rights
8 (2020) SPC IP Civil Final No. 624
9 (2023) SPC IP Civil Final No. 796
10 (2016) Shan 01 Evidence Preservation No. 2 Civil Judgment
11 (2021) Yu 01 Evidence Preservation No. 1
12 (2012) SZFMSCZ No. 78
13 (2023) Hu 73 Evidence Preservation No. 5
14 (2023) Zhe 02 Evidence Preservation No. 2
15 (2015) GM(Z)ZZ No. 4265
16 (2019) SPC IP Civil Final No. 557
17 (2018) SMZ No. 1266
18 https://mp.weixin.qq.com/s/nOZk2OkvwBKzh4R6guzLJQ
19 https://mp.weixin.qq.com/s/yXSnPAamcZlxOIRFBAAxnw
20 (2022) Zhe 02 Evidence Preservation No. 9
21 (2017) Yu 01 Civil First No. 574
22 (2013) EWHZZCZ No. 03551
23 Article 114 of Civil Procedure Law of the People’s Republic of China (Amended in 2023)
24 Article 75 of Several Provisions of the Supreme People’s Court on Evidence in Civil Procedures
25 (2013) ZJZMCZ No. 496
26 (2021) Liao 02 Civil First No. 214
27 (2020) SPC IP Civil Final No. 1115
28 Article 1165 of The Civil Code of the People's Republic of China
29 (2022) ZGZMS No.3
30 (2015) DZFMYZZ No. 2229