On August 16, 2016, the Beijing Intellectual Property Court issued a judgment finding contributory liabilities by the sponsor of an industrial exhibition in a patent infringement case. It is believed to be the first case where a court had made such a decision under a similar factual pattern.
The judgment, if eventually upheld in appeal, would drastically increase the obligations of exhibition sponsors. For patent owners, it may mean another option of enforcement.
The case is Zhang Weidong v. Beijing Guozhan International Exhibition Centre Co., Ltd. ("Guozhan") and Beijing Zhong Zhuang Hua Gang Architecture Technology Exhibition Co., Ltd. ("Zhongzhuang") (张伟东诉北京国展国际展览中心有限责任公司和北京中装华港建筑科技展览有限公司, (2015)京知民初字第907号).
For the two defendants, Guozhan is the property manager of the exhibition facilities and works under a management agreement with the owner of the property, while Zhongzhuang as the sponsor of a décor exhibition leased the facilities from Guozhan and then subleased individual booths to various vendors during the exhibition.
The patent owner purchased infringing goods from the vendor of a booth and filed the lawsuit based on this purchase.
From the fact accounts in the judgment, the patent owner did not name that specific vendor as a co-defendant, and the court did not exercise its discretion to add the vendor as a codefendant or third party, either. As a more relevant fact, the patent owner did not send a cease & desist letter to that vendor or file a complaint with Zhongzhuang or Guozhan.
The above implies that the patent owner had the initial plan to have the facility manager and sponsor of the exhibition, instead of the individual vendor attending the exhibition, as the primary targets in his lawsuit.
In the judgment, the court does not impose liabilities on Guozhan as the facility manager, on the grounds that in leasing the facilities to Zhongzhuang, Guozhan has fulfilled its "relevant obligations" (the court however did not specify what obligations a facility manager should fulfil during an exhibition).
In finding liabilities for Zhongzhuang, the court has the following reasoning:
The vendor at booth W4-C10B exhibited and sold the accused products during the décor exhibition and thus infringed the plaintiff's patent. For a participating vendor, Zhongzhuang is the landlord of the exhibition facility and has the obligation to monitor and manage the vendor's operations, including the obligation to vet the vendor's qualification and credentials. Zhongzhuang has failed to fulfil its obligation and objectively contributed to the infringement, and thus should be liable for the plaintiff's damages and reasonable expenses for stopping the infringement.
This judgment, if upheld in appeal, would drastically increase exhibition sponsors' obligation regarding potential patent infringement. It is a reasonable question whether the sponsor of a large exhibition has the capacity and expertise to determine whether all products showcased by all the vendors may or may not infringe others' patent rights, particularly if the products are large or complex ones. Therefore, when the patent owner did not give a prior warning or file a complaint as in this case, it is questionable for the court to hold that a sponsor is liable for contributory infringement.