Since its establishment three and a half years ago, Shanghai Intellectual Property Court has been actively implementing the intellectual property judicial policy of “leading role of judicature, strict protection, classified strategy and harmonious proportion”, attaching greater importance to the improvement of judicial mechanism and the deterrent function of law, and increasing the penalties for illegal acts, so as to provide strong judicial guarantee for constructing an intellectual property legal environment where innovation are stimulated and protected.

(I) Taking active and reliable preservation measures to safeguard the protection of intellectual property right

Shanghai Intellectual Property Court has established temporary judicial protection measures with standard procedures and good effects, and given fully play to the system efficiency of behavior preservation, property preservation and evidence preservation, efficiently improving the timeliness and convenience of intellectual property judicial remedy. Since its establishment three and a half years ago, Shanghai Intellectual Property Court has judged 638 preservation cases according to the law, including 79 pre-litigation preservation cases and 559 in-court preservation cases, laying a solid foundation for effective trial and dispute resolution.

Firstly, to fully apply evidence preservation to timely fix the infringement evidence so as to lay a solid foundation for verification of infringement act and determination of liability for infringement. In the cases involving computer software copyright infringement, the evidence preservation of the installation and usage of infringing software before litigation according to the obligee’s application can help the court quickly verify facts and persuade the parties involved to solve their dispute through mediation or reach a dispute settlement agreement of “compensation + software legalization”. If the defendant is found to have destroyed evidence during the evidence preservation, the court shall make presumptions concerning the alleged infringement facts unfavorable to the defendant according to the law.

Secondly, to fully carry out property preservation to prevent the infringer from hiding assets, and to accommodate dispute resolution and responsibility performance. The function of online execution and surveillance system should be used to full advantage so as to achieve sufficient property preservation, which can not only help the parties involved reach an accommodation, withdraw the lawsuit and solve dispute, but can also ensure the voluntary execution or compulsory execution of the judgment by the parties involved.

Thirdly, to fully apply behavior preservation to timely prevent the spreading of infringement damages and “slam the brakes on” imminent infringement. For example, in a case involving trade secret infringement, the defendant who was a senior executive of the plaintiff copied many documents containing the plaintiff’s technical information before his/her dimission and now is about to leave the country. After reviewing the plaintiff’s application according to the law, the court immediately determines to take pre-litigation behavior preservation, and delivers the civil ruling paper to the defendant at the night before the defendant leaves the country, and helps the parties involved solve their dispute in the follow-up infringement lawsuit.

(II) Making interpretation according to the law, reducing the obligee’s burden of proof, and further improving the reasonability of damage compensation calculation

In judicial practice, the obligee tends to pay too much attention to proving whether the relevant act constitutes infringement and what kind of infringement the relevant act is, but ignores the provision of evidences to prove important facts related to the damage compensation. Shanghai Intellectual Property Court reduces to an appropriate extent the obligee’s burden of proof by giving guidance on proof providing, reasonably allocating the burden of proof, issuing investigation order and other means.

Firstly, to formulate guidance on case trial and guide the obligee to provide proof according to the law. Guidance on Trial of Design Patent Infringement Dispute, Guidance on Trial of Trade Secret Infringement Dispute and Essentials of Computer Software Case Trial and other regulations have been formulated to make clear the ideas for the case trial and help the parties involved actively provide proof.

Secondly, in the event that the evidence materials are in the control of the defendant, to urge the parties involved to actively provide proof by allocating the burden of proof in a reasonable manner. In the disputes where the creator or designer of a service invention gets a reward or remuneration for such invention, if the inventor has difficulty in obtaining the sales contract or invoice from the employer, the court will reasonably allocate the burden of proof, and guide the employer to voluntarily submit the related sales invoice, thus to accurately ascertain the accurate amount of remuneration payable to the service inventor.

Thirdly, if the evidence materials are in the control of a third party, the court shall issue an investigation writ to obtain evidence. For example, in case the infringing products are sold through a network platform, the sales data is usually stored on the network platform. The court will issue an investigation writ according to the plaintiff’s application, and acquire the sales volume of the defendant’s infringing commodities from the network sales platform, thus to ascertain the defendant’s infringement scale and determine the amount of compensation for damages.

(III) Increasing penalties on willful and repeated infringements with the ultimate aim to realize market value

In most intellectual property infringement cases, the exact amounts of the plaintiff’s loss and the defendant’s infringement profit fail to be verified, and most of the parties involved will require the court to determine the amount of damage compensation by applying the statutory indemnify principle and according to specific circumstances. Shanghai Intellectual Property Court makes different judgments based on different circumstances, reflecting the different objects of protection and crackdown in each case.

Firstly, to determine the amount of damage compensation by applying the principle of proof providing interference and legal compensation in combination with specific infringement details and evidences recorded. As for the cases where the infringement lasts a long time with a massive scale and obvious bad faith, the court will determine the amount of damage compensation based on the maximum legal compensation amount and according to the circumstances of infringement. For example, in the trademark right infringement cases of “BMW” and “RT-Mart”, the court ordered the defendants in both cases to undertake the maximum legal compensation of RMB 3 million yuan. For the cases where the actual losses are proved to exceed the maximum legal compensation after investigation and the defendant fails to provide evidence for the profits obtained from infringement, the court will determine the compensation amount at an amount over the maximum legal compensation based on the specific facts of the case. For example, in a computer software infringement case, the defendant was found to constitute infringement by using a computer software program according to the evidence obtained, and the actual loss suffered by the plaintiff exceeded the maximum legal compensation of RMB 500,000 yuan stipulated by the Copyright Law. Based on the evidences and the software prices provided by the parties, and upon overall consideration of the defendant’s infringement duration, subjective bad faith and other factors, Shanghai Intellectual Property Court ordered the defendant to make economic loss compensation and pay reasonable expenses at a total amount of RMB 15,05 million yuan according to the law, showing the firm determination of the court to increase infringement damage compensation.

Secondly, to determine the compensation amount based on the nature of infringement act and crack down on source infringement and repeated infringement. For example, in the trademark right infringement lawsuit filed by Honeywell International, the court of first instance failed to notice the fact that the defendant is a producer of fake goods and only ordered the defendant to make a compensation of RMB 80,000 yuan. Shanghai Intellectual Property Court held that, as the source of infringement, the defendant should undertake greater liability, greatly increased the compensation amount in the second trial based on the specific facts and the infringement scale ascertained, and ordered the defendant to make a compensation of RMB 300,000 yuan according to the law. In another two trademark right infringement cases, the two defendants both committed repeated infringement, which was neglected by the court of first instance. Therefore, the court revoked the first instance judgment in the trial of second instance and increased significantly the compensation amounts.

Thirdly, to guarantee the obligee’s right of action and fully support reasonable costs. To increase the compensation for the obligee’s reasonable costs incurred in safeguarding its legal rights will be of great help to encouraging the obligee to actively safeguard its legal rights, maintaining the normal order of market economy as well as the management order of intellectual property. In those cases where the facts of the infringement and the reasonable cost are verified, Shanghai Intellectual Property Court will increase the compensation for reasonable costs as high as possible to make the compensation match the market price of intellectual property service. In the trademark right infringement lawsuit filed by Hugo Boss, many evidences provided by the plaintiff were accepted by the court, and the defendant made comprehensive defense resulting in heavy workloads during the litigation. The court fully supported the plaintiff’s claim for reimbursement of legal fees of RMB 350,000 yuan incurred by safeguarding its rights based on the market value of the service provided by the attorney.