Case No. (2019) Su 01 Min Chu No. 687

On January 28, 2016, Ding Moumei submitted a design patent application entitled "Portable Folding Mosquito Nets for Infants and Children" to the State Intellectual Property Office, which was granted on June 22, 2016.  The defendant Dingtou Company is the operator of the Taobao store "Tongmeng Maternal and Infant Store", and Suao Company is an affiliate of Dingtou Company.  On March 2, 2019, Ding Moumei lodged a complaint with the defendant Tmall, stating that the U-shaped mosquito nets and other products manufactured and sold by Lutou Company and Suao Company were suspected of infringing on its design patent rights.  On March 7, 2019, Lutou Company provided Tmall with the "Counter-Notice", "Tmall Intellectual Property Complaint and Appeal" and related comparative documents, promising that the complained product displayed on the Tmall platform did not infringe Ding Mou May's rights.  After receiving the complaint, Tmall commissioned Zhejiang Intellectual Property Research and Service Center to conduct patent infringement appraisal three times.  The latter issued three "Patent Infringement Judgment Consultation Reports". The conclusion was that the patent infringement was not established.  Tmall failed to take measures such as deleting sales links

On March 26, 2019, Ding Moumei sued Dongtou Company, Suao Company and Tmall Company to the Intermediate People's Court of Nanjing City, Jiangsu Province (hereinafter referred to as Nanjing Intermediate Court).  On April 4, 2019, Ding Moumei filed a "Counter-Appeal and Litigation Statement" to Tmall, insisting that Diantou constituted infringement, and Tmall's online shopping platform should immediately take necessary measures such as deleting links.  On April 8, 2019, Tmall deleted the sales link of the alleged infringing product on the Tmall online shopping platform.

On June 10, 2019, Yantou Company applied to Nanjing Intermediate People's Court to restore the deleted links first and provided corresponding property guarantees.

The Nanjing Intermediate People’s Court concluded that, first of all, Tmall handled Ding’s complaint in accordance with regulations and laws.  Ding insisted on complaining and believed that Tmall should take necessary measures such as deleting the link, so Tmall took the measures for sales links.  Secondly, the production and sale of the alleged infringing products by Yantou Company is unlikely to constitute infringement. Third, failure to restore the sales link may cause irreparable losses to the Yantou company.  Finally, the Yantou company provided a certain guarantee. Based on this, the Nanjing Intermediate People's Court ruled that Tmall immediately restored the sales link of the alleged infringing product.

Judge Comment

The case was called by the industry as the first "reverse behavior preservation" case in China, and it caused positive responses in the industry.  Unlike the case where the patentee usually applies for behavior preservation in order to stop the infringement in a timely manner, that is, a temporary injunction, the special situation of this case is that in the patent infringement litigation, the accused infringer applied to the court for prior execution to restore the deleted link and obtained the court’s decision to support. Generally speaking, Tmall and other e-commerce platforms will decide to maintain the status quo or take necessary measures such as deleting, blocking, disconnecting, and terminating transactions and services based on the complaint materials of the complaining merchants and the complaint materials of the complained merchants, in accordance with their platform's intellectual property complaint handling rules. However, once a complaint business brings an intellectual property infringement lawsuit, e-commerce platforms usually take measures such as deleting the sales link. The right holder complained to the e-commerce platform and required it to take measures such as disconnecting the sales link, similar to applying for behavior preservation measures (litigation injunction) in civil litigation.  Therefore, the court ruling to restore the deleted sales link based on the application of the counterparty can also be regarded as a reverse application and extension of the law of behavior preservation.

First, effectively prevent the loss of the respondent from further expanding. At present, the sales of products that have been complained of or accused of infringement largely depend on the accumulation of goodwill and word of mouth, and the timing of sales. Although the court's final judgment will bring justice to the accused infringer, the rapid changes in online transactions, especially the unique stickiness of online customers, often make the broken sales link may cause irreparable losses to the accused infringer.  In particular, some special products have strong seasonality. During the peak sales season, if the deleted sales link is not restored in a timely manner, it may cause continuous reduction and loss of the goodwill and reputation accumulated by the respondent or the product against which it is sued, as well as the loss of trading opportunities, which may cause irreparable losses.  Therefore, the court promptly issued a ruling on June 14 to restore the deleted links in advance, which had a positive effect.

Secondly, the e-commerce law came into effect on January 1, 2019.  The e-commerce platform shall notify the complainant of the complaint of the party concerned, and then transfer the complaint to the complainant after the complainant appeals. In addition, Article 43 of the Electronic Commerce Law also gives the complainant a "15-day waiting period" to decide whether to withdraw the complaint or file a lawsuit in the court.  At this time, the online shopping platform may decide whether to restore the deleted or broken link.  As mentioned above, after such a procedure and a long period of time, it may cause irreparable losses to network sellers. It is common for competitors in the same industry on the current e-commerce platform to use the e-commerce law to make malicious complaints and achieve the purpose of unfair competition.  This case can effectively solve this dilemma and help promote the healthy development of e-commerce.

From IPRCHN

September 21st, 2020