In March this year, the Intellectual Property Court of the Supreme People’s Court made second-instance judgments in two cases of infringement of utility model patent rights, explicitly indicating that the accused infringers should bear civil liability for stopping the infringement and compensating for losses though they only committed the infringement of offering for sale.

In the two cases, the court of first instance determined that the accused infringer’s act of displaying the accused infringing product on the website constituted offering for sale and infringed on the patent right involved in the case. The accused infringer should bear the civil liability for stopping the infringement and compensating for the losses, and the amount of compensation was determined based on statutory compensation. In addition, the court decided the amount of compensation in accordance with legal compensation. The accused infringer had no objection to the infringement of the patent right involved in the offering for sale, but   filed a lawsuit holding that it just need to bear the responsibility of compensating the patentee’s reasonable expenses in safeguarding rights, rather than the legal responsibility of compensating losses.

For this, the Intellectual Property Court of the Supreme People’s Court held that the act of offering for sale would objectively cause harm to the patent holders. The act of offering for sale may occur after or before the completion of the product manufacturing, and may occur before the product sales or during the sales process. Though the act of offering for sale is aimed at sales, it is a legal and independent way of infringement of act, the assumption of civil liability for the act of offering for sale is not based on whether there was really sales. Once the act of offering for sale occurs, it will give potential consumers a psychological hint and affect the reasonable pricing of the patented product due to the price of offering for sale by the accused infringer usually lower than the price of the patented product; or it will lead to consumers to give up purchasing the patented product and consider contacting with the accused infringer, causing delay or even reducing the normal sales of the patented product.

In addition, the accused infringer's act of offering for sale may also have an adverse influence on the advertising publicity effect of the patented product. It can be seen that offering for sale will cause damages such as price erosion of the patented product, reduction or delay of business opportunities, etc. to the patentee, which is can be reasonably inferred. There must be remedies for damages to rights. Unless there are other special provisions in law, the remedy should at least include the two most basic forms of civil liability for torts, that is, suspension of the infringement and compensation for losses, rather than just either of them. Meanwhile, the judgment pointed out that when determining the specific amount of compensation that the accused infringer should bear for the act of offering for sale, the Intellectual Property Court of the Supreme People’s Court held that for the act of offering for sale, the original court decided basically appropriate legal compensation applying to the legal compensation when calculating the compensation for the loss and the judgment shall be maintained.

From The Intellectual Property Court of the Supreme People’s Court

July 21st, 2021