[China Intellectual Property News] Fined RMB 10,000 Yuan for Unauthorized Dismantling of Equipment Sealed up by Court

May 31, 2018  ChinaIntellectual Property News

Abstract: Recently, Shanghai Intellectual Property Court imposed a fine of RMB 10,000 yuanon relevant persons for destroying the evidence sealed up by court, effectively safeguarding the judicial authority and acting as a warning forthe litigants.

Destroying the evidence sealed up by court not only hinders the court from ascertaining relevant facts, but also undermines the judicial order. Recently, Shanghai Intellectual Property Court imposed a fine of RMB 10,000 yuan on relevant persons for destroying the evidence sealed up by court, which effectively safeguarded the judicial authority and acted as a warning for the litigants.

This case involved a dispute over utility model patent infringement. The plaintiff, a precision machinery company, is the patentee of the utility model patent of “an element carrying mechanism of a miniature metallized capacitor welding bundling machine”which has been applied to subsequent product R&D, productapproval, mass production and marketing. In the course of operation, the plaintiff found that the defendant, a trade company in Shanghai, used the patent in a variety of its mechanical products without permission, and published on its website information on the promised sale of the alleged infringing product, which seriously erodedthe market shareof the plaintiff's patent products as their regional markets were highly overlapped. Believing that the defendant's act had caused significant economic losses to it and infringed upon its patent right, the plaintiff sued to court, requesting the defendant to stop the production, promised sale and sale of the alleged infringing product immediately, and compensate for its economic losses totaling RMB 1million yuan.

During the trial, upon the plaintiff's application, Shanghai Intellectual Property Court preserved the evidence of the alleged infringing product produced by the defendant and stored in its business premise by means of photos, videos and sealing, etc. on February 23, 2017. When carrying out the preservation, the enforcement staff clearly informed the defendant's general manager that the sealing period was from the date of the seizure to February 2019, and that “During this period, no one may transfer, conceal, destroy or otherwise dispose of the seized property without the consent of Shanghai Intellectual Property Court. Otherwise, he or she will be held liable according to law. ”

However, during the trial, Shanghai Intellectual Property Court found that the seized equipment was partially dismantled, the seal was partially damaged, and the whole machine was moved.

Afterwards, the defendant, its agent ad litem, and the primary person in charge wrote a letter of apology to Shanghai Intellectual Property Court respectively, explaining that another customer's equipment was broken and was in need of emergency services butrelevant components were out of stock, so an employee with weak legal awareness dismantled some components of the equipment to cope with the emergency incident. They apologized for failing to take good care of the evidence and guaranteeing its intactness.

Shanghai Intellectual Property Court held that when the evidence involved was preserved, the primary person in charge had been clearly informed of the defendant's obligations and the corresponding legal consequences. He should perform his management responsibility to ensure the intactness of the seized evidence. However, he failed to perform such obligation, resulting in destruction of the seized evidence, and therefore should be punished according to law. The court then decided to impose a fine of RMB 10,000 yuan on him.

Shanghai Intellectual Property Court summoned the primary person in charge to court according to law, announced the penalty decision and conducted on-site education. The primary person in charge fully realized his mistake, apologized to the court again and paid the fine in court.

(Reporter Feng Fei, Correspondent Chen Yingying)