core point:
Judging from the judgments of courts across the country in recent years, the cases of high compensation will mostly involve the application of evidence disclosure and proof obstruction system, which has become a powerful weapon for people's courts at all levels to solve the problem of "difficult proof and low compensation".
In intellectual property litigation, when the right holder makes a high claim and completes the preliminary proof, if the accused infringing party refuses to provide the evidence about its profit, the right holder will not be helpless at this time, because the court may apply the evidence disclosure rule and find that the accused infringing party bears the burden of obstruction of proof.
Recently, in a case involving "Yihetang" trademark infringement and unfair competition disputes, the Guangzhou Intellectual Property Court applied the rules of evidence disclosure, and found that Yinuo company constituted an obstruction of proof when the defendant refused to submit relevant financial information. After referring to the litigation request and documentary evidence of the right holder Yihuiyin Company, it was determined that Ynuo Company had violated Yihuiyin Company's exclusive right to use the "Yihetang" registered trademark, and the compensation amount was increased from 300,000 yuan in the first instance to 1 million yuan, and Ynuo Company should bear all the litigation costs of the first and second instance.
"Yihetang" is a tea brand of Yihui Beverage Company, which was founded in 2012. As of the date of the lawsuit, the number of "Yihetang" franchise stores in the country exceeded 4,000.
Yang Mou, an agent of Yihuiyin Company and a lawyer in a Hubei law firm, said in an interview with a reporter from China Intellectual Property News that with the increasing popularity, "Yihetang" has encountered more and more infringement troubles. Some merchants will directly use "Yihetang" related trademarks on stores or commodities, and some will use "Yihetang" related trademarks after deformation. Some will add other content after "Yihe Tang", but will highlight the three words "Yihe Tang", Yinuo company belongs to the last situation.
"After investigation and evidence collection, Yinuo company registered an application for infringement marks such as' Yihetang South Hushi 'in 2019, carried out investment joining activities when the trademark registration application was not approved, highlighted the use of the words' Yihetang', and the material packaging and decoration used by the franchise store were modeled on the decoration of Yihui Drink Company." In addition, in the situation statement issued by the franchisee, Yinuo Company induced the franchisee to believe that Yinuo Company was an agent or sub-brand of Yihui Beverage Company, and then signed a franchise contract with Yinuo Company to join. Based on this, we believe that Uno is suspected of trademark infringement and unfair competition." Yang said.
As for Yihuiyin Company's lawsuit, Yinuo Company believes that the accused infringement marks used by it have legal sources, and it has no intention of infringement. In addition, due to the epidemic and other reasons, the company has basically no longer operated and is currently in a state of suspension. The compensation claimed by Yihui Beverage Company is too high and without basis.
After trial, the court of first instance found that the use of the accused infringing marks and other acts in the franchise contract authorized the franchisee to use in the decoration and operation of the store violated the exclusive right of Yihuitang registered trademark of Yihuitang, which constituted unfair competition to Yihuitang. After synthesizing the subjective fault and infringement form of Yinuo Company, the court of first instance decided that Yinuo Company should compensate for economic losses totaling 300,000 yuan.
After the first instance judgment, Yihui Beverage Company appealed on the grounds that the amount of compensation was too low, and the Guangzhou Intellectual Property Court made the above second instance judgment after hearing. Reporters on the case to contact a Nuo company, the relevant person in charge declined to interview reporters.
In this case, Zhang Yinuo, the owner of Yihui Drinking Company, made a very high profit from infringement. In order to prove his claim, Yihui Drinking Company carried out a large number of investigation activities, obtained and submitted a large amount of evidence through on-site evidence collection, market supervision complaints, lawyer's order investigation and other ways, including franchise contracts, receipts, and transfer records of outsiders. In addition, Yihui Beverage Company also preliminarily counted the number of its franchisees, the income from the franchise contract and the cost of supplying materials according to the evidence it has obtained. Based on this, it requested the court to judge Yinuo Company to compensate more than 1.55 million yuan.
During the trial of the case, according to the application of Yihuiyin Company, both the court of first instance and the court of second instance ordered Yinuo Company to submit the number of franchisees using the accused infringing marks, the actual collection situation and the flow of funds after the collection. Yinuo Company promised to submit it after the trial, but it failed to submit it within the deadline. "The company's apparent cooperation but in fact refused to disclose relevant evidence, should bear the burden of obstruction of proof." The collegiate panel of the second instance of the case said.
In an interview with our reporter, CAI Jianhe, chief judge of the second instance of the case, further introduced that in intellectual property litigation, the circumstances of the infringer's malicious and infringing acts are closely related to the amount of compensation finally determined by the court, especially for malicious infringements, the punishment should be increased. Under the continuous operation and promotion of Yihuiyin Company, the trademark of "Yihetang" has gained a certain popularity among milk tea brands. Yinuo Company prominently uses the word "Yihetang" and applies for registration of the accused infringing logo as a trademark, which is malicious in adhesion. Yinuo company in the trademark application is not approved and registered to carry out the business, such licensing infringement belongs to the source of infringement, infringement caused by a large range of impact, serious loss consequences. The collegial panel focused on the amount of facts found on the record, made a factual presumption against the company, and determined that the amount of compensation of 1 million yuan was more reasonable.
The actual loss of the right holder or the infringement profit of the infringer to determine the amount of damage compensation has always been the bottleneck problem restricting the quality of intellectual property trial and the improvement of judicial protection level. The highlight of this case is that the collegiate panel found that the defendant constituted obstruction of evidence by applying the rules of evidence disclosure.
CAI Jianhe said that China's current patent law Article 71、Trademark Act Article 63 and Article 54 of the Copyright Law both stipulate the system of evidence disclosure and obstruction of proof. The conditions for applying the system of evidence disclosure and hindering of evidence include: the relevant evidence is the key evidence for ascertaining the facts of the case; The party with the burden of proof has tried its best to prove, and the relevant evidence is held by the other party; The court requires the evidence holder to disclose relevant evidence according to law; The evidence holder fails to provide or provides false evidence without a valid reason. "From a practical point of view, the application of evidence disclosure and evidence hindering system can be presumed to be detrimental to the establishment of the claim of the evidence holder, or determine the amount of compensation by reference to the claim and evidence provided by the right holder, which is conducive to promoting the infringer to actively perform the duty of proof and ensure the smooth progress of the proceedings." At the same time, the system can also appropriately reduce the burden of proof for the right holder and solve the problem of difficult proof for the right holder." CAI Jianhe thinks.
In Yang's view, the court of second instance made full use of the system of evidence disclosure and obstruction of proof in this case, which has a typical reference significance in solving the problem of right holders' proof and promoting the construction of litigation integrity: First, the court takes the defendant's behavior as one of the factors to determine the amount of compensation when the right holder has tried his best to provide evidence and the defendant has obstructed the evidence, and focuses on the ascertained facts to determine the amount of compensation, which is conducive to the implementation of the "comprehensive compensation principle" and realizes the full relief to the right holder as far as possible; Second, the court determines that the defendant shall bear all the litigation costs of the two trials according to the defendant's obstruction of evidence, which not only implements the punishment system for obstruction of evidence, but also increases the cost of infringement, alleviates the pressure of rights holders, and helps to strengthen the judicial protection of intellectual property rights.
Source: China Intellectual Property News
Editor: Fang Yuan
Proofread: Luo Guanming
Reviewed by: Sin Man-kwong
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