Panasonic Co., Ltd. obtained the design patent at issue named “the beauty apparatus” on September 5, 2012, with the issuance publication No. CN302065954S. Holding that the “Jin Dao ion steamer beauty apparatus KD-2331” which was produced, sold, and offered for sale by Zhuhai Jin Dao Electrical Appliance Co. Ltd. (hereinafter referred to as Jin Dao Company) and sold by Beijing Li Kang Fu Ya Trading Co, Ltd. (hereinafter referred to as Li Kang Company) infringed its design patent right, Panasonic Co., Ltd. requested the court to order the two defendants to stop infringement; destroy all the promotional materials related to the allegedly infringing product as well as remove the promotional contents thereof; Jin Dao Company destroy the moulds involved and specialized production equipment as well as all the inventory of the allegedly infringing product and also the unsold product to be retrieved from the stores; Jin Dao Company compensate 3 million RMB (around USD446,000 ) for economic loss and the two defendants jointly compensate 200,000 RMB( around USD30,000 ) for reasonable expenses.
Beijing Intellectual Property Court of first instance held that the existing differences between the allegedly infringing product and the patent design at issue did not have a substantial impact on the overall visual effect of the two, which belong to similar designs. Jin Dao Company produced, sold and offered for sale the allegedly infringing product without the permission of Panasonic Co., Ltd.; Li Kang Company sold and offered for sale the allegedly infringing product without the permission of Panasonic Co., Ltd. The existing evidence could prove the profit of Jin Dao Company from sale and offer for sale of the allegedly infringing product, and Panasonic Co., Ltd. had reasonable grounds to claim the 3 million RMB compensation based on the sales 2 / 2 volume displayed online and the average price. In addition, in regards to the reasonable expenses paid by Panasonic Co., Ltd. to stop the infringement, Li Kang Company, as the seller, did not stop selling the allegedly infringing product after knowing the lawsuit in this case and therefore should jointly bear the expenditure in the litigation with Jin Dao Company.
Accordingly, the court made the first-instance judgment that the two defendants should stop the infringement; Jin Dao Company make 3 million RMB compensation for economic losses; Jin Dao Company and Li Kang Company jointly compensate reasonable expenses of 200,000 RMB.
Both companies were not satisfied with the judgment and made appeal to Beijing High Court. The High Court held that the alleged infringing product fell into the protection scope of the patent at issue. Regarding the amount of compensation, Panasonic Co., Ltd. obtained the sum of the sales volume of products with the model of the alleged infringing product, namely 18,411,347 sets, as well as the average price of 260 RMB by notarized search on some online retailer platforms, as the basis for compensation claim. In accordance with the above total sales volume of the alleged infringing product multiplied with its average price, even if the reasonable profit per infringing product were underestimated, the calculated results were still much higher than 3 million RMB. With the support of the above evidence, the claim of Panasonic Co., Ltd. With the compensation amount of 3 million RMB had a relatively high degree of rationality. The court of first instance fully supported the compensation claim of Panasonic Co., Ltd. for economic losses, which had factual and legal grounds.
Therefore, the High Court dismissed the appeal and upheld the first- instance judgment.
The appeal case of design patent dispute in favor of Panasonic Co., Ltd., as one of the 2016 Top 10 IP cases in China Courts recently released by the Supreme Court, has certain exemplary significance as it makes clear the rules for trial and determination on the evidence of infringement profit in patent infringement cases.
The judgment of the second instance takes the view that considering the difficulty of proof for patent damage and the control of account books and materials related to patent infringement acts mainly at the infringer’s side, under the circumstances that the right holder has fully illustrated the rationality of its claim of the compensation amount and the infringer cannot provide contrary evidence to overrule the claim, the court may determine the profits obtained by the infringer due to the infringement based on the claim and evidence provided by the right holder.