This case clarified the strict conditions for the application of legal source defense. Firstly, the seller did not know the patent infringing product was used without the permission of the patentee. Secondly, the seller could prove that the product had a legitimate source. Both conditions are indispensable. Foridom Law Firm senior partner, Mr. Wang Lu feng and Ms. Chen Shao lan, have helped the appellee win the support of the Supreme People’s Court.
The appellant Wal-Mart Eastern China Department Store Co., Ltd. (hereinafter referred to as Wal-Mart) and Lycra Health Technology (Nanjing) Co., Ltd.(hereinafter referred to as Lycra) infringed inventions with the appellee,Shanghai Julan Water Treatment Technology Co., Ltd. (hereinafter referred to as Julan)
In this case, Wal-Mart refused to accept the first instance judgment and appealed to the Supreme People's Court. The appellee entrusted our attorney Wang Lu feng and Chen Shao lan to help our client won this case in the end.
After receiving the complaint, Wal-Mart failed to make a reasonable judgment in time and removed it within 6 months, which obviously exceeded the reasonable time limitation. Therefore, Wal-Mart cannot be exempted from selling the alleged infringing product during the period from the receipt of the complaint to the removal of the product.
Argument and Opinions
In the case,whether the legal source defense raised by Wal-Mart is correct when the alleged infringing product complies with the principle of all elements principle and falls within the scope of protection of the patent right.
Patent Law article 70 states that the patent administrative department of the State Council may handle patent infringement disputes that have significant influence nationwide at the request of the patentee or interested party.
Ina patent infringement dispute, whether the seller’s legal source defense can be admitted by the court requires that the alleged infringing product has a legal resource and the seller has no subjective fault, namely, it is the seller of the alleged infringing product is exempted precondition. Above conditions are dispensable.
To be more specific, the fact that the alleged infringing product has a legal source means that the seller obtains the sold product through normal commercial methods such as legal purchase channels and usual sales contracts.
For objective requirements, sellers should provide relevant evidence in line with trading habits and provide clear upstream suppliers that can be claimed.
With regard to the subjective elements, the seller should prove that he actually does not know and should not know that the product he sells is manufactured and sold by the manufacturer without the permission of the patentee.
The above two elements are related. If the seller can prove that it complies with legal and normal market transaction rules, clear product source, legal channels,reasonable price, and with good faith. Then it can assume that the seller actually does not know or should not know the products was manufacture without permission. Therefore, the seller has no subjective fault.
From the facts ascertained in the first instance of this case, it shows that the basic information of the patent rights was involved, the basic information of the alleged infringing products, the infringement comparison results, etc. were contained in the complaint received by Walmart in January 2018.
Under this circumstance, Wal-Mart shall promptly remove the allegedly infringing products from the shelves.
As a multinational company, Wal-Mart has a good sense of intellectual property protection and is capable of handling various intellectual property disputes.Even taking into account the compliance and rigorous requirements of Wal-Martas a multinational company in handling related affairs, it has been imprisoned in this case.
It is not necessary to take a reasonable time to make a preliminary judgment on whether the infringing product is an infringing product.
As has been found in this case, between January 2018 and August 13, 2018, Wal-Marthas not been able to make a timely decision for as long as six months.
The reasonable judgment and the removal of the shelves obviously exceeded the reasonable time limit. At this time, it argued that it actually did not know and should not have known that the products sold were manufactured and sold without the permission of the patentee, which is difficult to admitted by the court.
Regarding the determination of a reasonable period of time, the Supreme People’s Court believes that individual factors should be fully considered, and the type of patent, the basic situation of the alleged infringing product, the comparison analysis, the professional judgment ability of the multinational company, and the management process of the multinational company should be considered.
Mr.Wang Lufeng, the senior partner of Foridom Law Firm, who has successively obtained the qualifications of patent attorney, trademark attorney, technical broker,and internal examiner qualifications of "National Standards for Enterprise Intellectual Property Management Regulations".
Ashe has also served as a director of China Trademark Association, the director of the Shanghai Trademark Association, and the member of organizations such as the International Licensing Trade Workers Association, the International Trademark Association, and the China Intellectual Property Research Society.
The main practice areas of him are intellectual property legal affairs, including intellectual property distribution, commercialization and licensing,intellectual property protection and dispute resolution, as well as domestic and foreign patent and trademark applications.
With more than 17 years of professional experience, he have been providing services to hundreds of companies including many Fortune 500 companies. Especially in the field of patents, including computers, communications, mechatronics , and machinery.
Mr.Wang is also good at patent mining and layout, patent analysis, patent invalidation, and he has a relatively in-depth understanding of patent law and related laws and regulations, as well as technology transfer In terms of service, we have accumulated a wealth of professional knowledge and practical experience.
《世界商标评论》（World Trademark Review）2020年度“商标保护及诉讼”领域杰出个人；国际商标协会公共信息委员会委员；优秀知识产权诉讼卓著团队；全国十佳著作权诉讼律师；上海市徐汇区人民政府兼职法律顾问；上海知识产权服务之星；上海市闵行区知识产权协会专家委员会专家。
The senior partner of Foridom Law Firm, who has been award as 2020 Outstanding Individual in the Field of "Trademark Protection and Litigation"(World Trademark Review)
Member of the Public Information Committee of the International Trademark Association;Outstanding Team of Intellectual Property Litigation; National Top 10 Copyright Litigation Lawyers; Part-time Legal Counsel of the People's Government of Xuhui District, Shanghai; Shanghai Intellectual Property Service Star; Expert Committee of Shanghai Min hang District Intellectual Property Association.
The trademark administrative litigation cases represented were selected as the 2019-2020 China Trademark Association National Excellent Trademark Agency Cases, and the Shanghai Top Ten Trademark Agency Cases 2019-2020.
The unfair competition cases represented by the Shanghai High People’s Court Intellectual Property Leading Cases in 2006, Perennial expert writer of “China Intellectual Property News”, “China Trademark” and “Shanghai Intellectual Property”.