A Solution to "Difficulty to Prove" in Intellectual Property Litigation

China Trial 2019 Issue 03

Chen Huizhen National Adjudication Expert, Full-time Member of Adjudication Committee

The "difficulty to prove" in intellectual property litigation is one of the most complained-about issues among defenders. The "difficulty to prove" actually refers to the situation that the intellectual property right holder suffers from ineffectiveness, frustration or failure in intellectual property protection owing to the difficulties in obtaining evidences to prove their claims. Therefore, to be precise, "difficulty to prove" is "inaccessible evidence". Due to the particularity of intellectual property rights, the concealment of infringement acts and other characteristics, intellectual property protection related litigations do have remarkable feature of "difficulty to prove" to a greater extent than general civil right related litigations. This paper aims to explore a solution to realistic difficulties by analyzing the status quo and causes of "difficulty to prove".

I. Analysis of the "difficulty to prove" phenomenon

In terms of judicial practice, in intellectual property protection related litigations, the right holder suffers from frustrations mainly in the following aspects due to the difficulty to prove his claims:

First, the right holder suffers from frustration due to the difficulty to prove he has the right in related intellectual property. Except patent right and trademark right that are to be granted by competent administrative organs and have relatively clear basis and limit, the protection of other intellectual property rights is often obstructed by the absence of evidence to prove the entitlement to the right holder. For instance, in order to claim the protection of copyright, the right holder shall prove that he has create the work and been assigned or licensed the copyright; the protection of trade secret must be claimed under the premise of the possession of trade secret, and the composition of trade secret must comply with legal requirements; in order to prove this, the right holder should at least disclose evidences to prove the existence of his trade secret. However, during this process, the right holder often suffers from frustration due to insufficient evidence on the creation, assignment or licensing, or withdraws the action for fear of "secondary information leakage".

Second, the right holder suffers from frustration due to the difficulty to prove that the defendant has implemented the infringement act. The separation between the right and carrier of intellectual property make it difficult to identify the infringement act that occurs; even if the act is identified, it is often difficult to fix evidences, and it is very easy for the infringer to destroy the evidence. The right holder may obtain the evidence of infringement by such means as notarized or direct purchase of infringing product; however, it is often difficult to prove that the infringement act is established due to the difficulty in obtaining infringement evidences or the lack of skill to obtain evidences. For instance, some allegedly infringing products are large machines and even a whole production line, it is expensive to obtain infringement evidence by purchasing the products and it is easy to be detected to customize a production line; in some cases involving trade secret infringement, although the right holder suspects that the resigned employee may have infringed its trade secret, under the circumstance of non-standard on-boarding procedures, it is difficult to present evidences; since some infringement acts are highly specialized and change rapidly, it is difficult for the right holder to identify, find out and capture relevant evidences and then fix evidences in time; some evidences are obtained in non-standard notarized manner and have incomplete content, which influences the weight of evidence... all these demonstrate the difficulty in obtaining evidences. Furthermore, although the right holder in some cases presents evidences that could prove the defendant has implemented some acts, the acts do not comply with constitutive requirements of infringement acts claimed by the right holder, making it difficult to determine that the defendant constitutes the alleged infringement; in some cases, the defendant's defense of prior use and reasonable use are justified, while the right holder does not understand relevant provision on intellectual property very much and claims for the right protection blindly, which undoubtedly will cause frustration.

Third, the right holder suffers from frustration due to the difficulty to prove the reasonableness of the claims. In general, the right holder neither pays enough attention to collecting relevant evidences about the damage effect caused by infringement acts, such as the consequence, the scope of impact, specific factual elements, etc., nor fully explains the reason for compensation, while claiming for high compensation. The court has to determine at its discretion the amount of compensation according to the relevant information on the ascertained infringement act, which is certainly different or far different from the amount claimed by the right holder.

II. Analysis of the cause of "difficulty to prove"

There are many reasons behind the phenomenon of "difficulty to prove", either objective factors determined by the characteristics of intellectual property, or subjective factors such as the right holders insufficient consciousness of rights and inability to claim for right protection, and imperfect or poor enforcement of relevant legal systems.

(I) Objective cause of "difficulty to prove"

First, the intangibility of intellectual, the separation between right and carrier, the incomplete correspondence between infringement and damage, etc. determines the objective results of the difficulty to prove the entitlement in some intellectual property protection related litigations, and the difficulty to prove infringement act and damage effect in most intellectual property protection related litigations.

Second, intellectual property litigations involve specialized technologies and intellectual property system, which determines the objective results of the difficulty to identify the infringement act and to fix evidences.

Third, the limitation of intellectual property determines the uncertainty of the litigation outcome. The Patent Law, the Trademark Law and the Copyright Law provide for the prior art defense, the prior use, the reasonable use and other defense systems; once the defendant have such right of defense valid, the right holder's intellectual property will be limited and it will be difficult for the right holder's expectation to come true. In the field of anti-unfair competition, attentions shall be more paid to proper boundary between unfair competition and free competition, and the freedom of competition shall not be curbed due to the protection of intellectual property.

Fourth, there has not been an objective environment beneficial for the right holder to obtain evidences in Chinese society. Most citizens uphold the concept of "it's better to save trouble", and are unwilling to provide evidence or appear in court as a witness. Some organization and administrative departments are unwilling to provide relevant information for the parties or their lawyers; some administrative enforcement departments are unwilling to provide an administrative punishment document for the right holder, and even obstruct the investigation conducted by the court.

(II) Subjective cause of "difficulty to prove"

First, the right holder does not have sufficient consciousness of rights and pays no attention to the preservation and collection of relevant evidences on the creation or reception of intellectual property, which leads to the failure to prove basic fact for the lack of basic evidences for right protection.

Second, the right holder does not have sufficient professional ability in obtaining and fixing evidences, so that the evidences stored and presented often have procedural or physical flaws and have much insufficient weight of evidence than expected, and they could not prove any accusation, or even be used by the counterparty in the defense against the right holder.

Third, the right holder does not have high professional level in litigation and could not make corresponding claims. The right holder may fail to make an appropriate accusation or claim according to relevant evidences actually in his possession by reference to relevant provisions of laws, and is unable to reasonably determine the direction of litigation and wisely assess the litigation risk, which causes great difference between the litigation outcome and the expectation.

Fourth, the right holder does not make full use of the measures of evidence preservation

III. Countermeasures to solve "difficulty to prove"

China has rapidly realized the specialization of the adjudication of intellectual property cases within a relatively short period; in judicial practice, the majority of judges actively provide legal explanations and litigation guidance, carry out the evidence preservation, creatively apply the rule of evidence, and explore the rules of special evidence disclosure in trade secret cases, all of which contribute to the right protection of the right holder.

As for the issue of "difficulty to prove" and possible causes, efforts in the following aspects are suggested:

First, strengthening the advocacy of intellectual property laws to improve the consciousness of rights and management. Most right holders suffers from frustration because they focus only on the creation, transaction and utilization of intellectual property that is directly related to economic interests, but relatively lack the consciousness of right protection and management. Once a dispute arises, the lack of relevant evidences is not conducive to the right protection. In this regard, right holders shall be provided with advocacy and guidance so that they could consciously collect relevant evidences at the very beginning of the creation of intellectual property, while paying attention to managing and utilizing their intellectual achievements by different intellectual property systems.

Second, strengthening the cultivation of practical intellectual property professionals to improve the specialization level of practitioners in intellectual property service providers. Intellectual property litigations involve the specialization of technology and intellectual property systems, and the smooth promotion of intellectual property litigations is operational and practical. In this process, as the subject of litigation, the plaintiff, the defendant and their agents ad litem have direct impact on the litigation outcome with different professional competence; whether the evidence presented and the means used to obtain the evidence are professional also directly influence the effectiveness and weight of evidence. Therefore, the right holder and its agent ad litem, the notary who witnesses the evidence obtaining and other participants in the practical activities shall strengthen their comprehensive legal and practical training and exercise to effectively improve the ability to protect their intellectual property.

Third, establishing and perfecting the rule of evidence suitable for the characteristics of intellectual property related litigations Since intellectual property related litigations have characteristics distinctive from general civil litigations, Chinese judges have explored the utilization of such rules as evidence disclosure, limited burden of proof, deduction from facts in the practice of intellectual property adjudication. Such initiatives have accumulated some practical experience and provided possibility for us to explore the rule of evidence that is suitable for the characteristics of intellectual property litigations. As for the rule of evidence suitable for intellectual property related litigations, the following aspects shall be considered:

1. Evidence collection "He who asserts must prove" is certainly the basic rule of the burden of proof in civil litigations. Therefore, it is the obligation and responsibility of the parties to collect and provide evidences. Based on the particularities of intellectual property litigations, the collection of evidence shall focus more on and give play to the roles of relevant procedural systems. First, the evidence preservation system has been provided for in current laws. The preservation of evidence falls into action and during-action, which plays a unique role of evidence collection in the intellection property litigation and sometimes could be decisive. Second, the investigation order system being used in judicial practice. In intellectual property litigations, there are many cases that the information of a third party is recalled; although the Civil Procedural Law provides for the obligation of witness for those who know about the case, the information required from a third party in intellectual property litigation is completely different. It is necessary to strengthen and standardize the investigation order system, and specially identify the conditions and obligations for the information provision by relevant departments and personnel and their responsibilities if not provided. The investigation order system shall become an effective procedural system that the evidence was called for evidence from a third party in intellectual property litigation.

2. Burden of proof Existing rule of evidence only provides for that the burden of proof in a patent case involving the development method of new products shall be placed inversely; in fact there are many evidences that practically mastered or controlled by the infringing party but inaccessible to the right holder. In the fairness principle of burden-of-proof responsibility distribution according to Article 7 of Several Provisions of the Supreme People's Court on Evidence in Civil Procedures (2001), the evidences shall be classified to determine the burden-of-proof responsibility distribution and transfer rule specific to intellectual property litigations.

3. Rule of evidence collection In addition to the rule of evidence exchange in general civil litigation, the special rule of evidence collection shall be developed for some special intellectual property cases. For instance, in the trial of case involving the infringement of trade secret, when the principle of shift in the burden of proof is flexibly applied to the reasonable distribution of the burden of proof so as not cause "secondary information leakage" to the parties during the litigation, it is necessary to take such measures as symmetrical, staged and limited disclosure of evidence, to equally protect the litigation rights of both parties according to law.

4. Time limit of adducing evidence Although the time limit of adducing evidence is provided for under the rule of evidence, it is generally described and not strictly executed. In intellectual property litigations, due to the complex facts of case, many points in dispute and high degree of correlation among points in dispute, Some parties often take a wait and see attitude and are negligent to or selectively adduce evidences when their fundamental interests has not been endangered, and give other evidences only when the situation is not favorable or the judgement of instance is against them. This not only causes protracted process and efficiency, but also compromises the seriousness of litigations. Judges shall be entitled to designate or limit the time limit of adducing evidences according to the different conditions of cases, so that the parties which exceed the time limit shall have their lost. In this way, the parties could be urged to actively and timely adduce evidence to promote active status of the plaintiff and the defendant, which not only guarantee the legal right of defense of the defendant but also is beneficial for the court's determination of fact to comply with objective reality to the greatest extent.

5. Evidence review and verification The rules of factual presumption and the spoliation of evidence are massively applicable in the field of intellectual property litigation, for instance in the determination of infringement act and consequence, when the plaintiff presents the evidences to prove that he has the legal right and the defendant has the infringement acts, and if the defendant's specific way of act, the different acts of several defendants, the actual scale and profit of the allegedly infringing acts met certain conditions, such rules may apply. However, the rules are now applied in a restrained manner in practice, for which adequate experience has not been accumulated. More researches on the application conditions and procedures and active exploration and practice may to some extent solve the issue of "difficulty to prove".

 

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