China Patents: Patent enforcement at trade fairs

A very recent court judgment issued by the Beijing IP Court imposed contributory liability on trade fair organisers for patent infringement. Though the reasoning is quite unclear, this decision gives some worthy attention to IP enforcement at Chinese trade fairs.

In China, there are ways for IP rights owners to enforce their IP rights, to some limited extent, at major trade fairs, such as the Canton Trade Fair. IP rights owners file complaints at the complaint desks at the trade fairs, which are often set up by trade fair organisers but actually operated by the local patent office, copyright bureau and AICs jointly. Once the officials at the complaint desk decide that there is an infringement they will ask the vendors to remove the infringing items from the exhibition booths. But there is no penalty decision nor fine imposed on the exhibitors. The major purpose is to give some peace of mind to IP rights owners and avoid any on site legal proceedings by courts or government authorities. What IPR owners have not been happy about is the burdensome formality requirements and the very limited number of actions that the complaint desk will take. Obviously, the trade fair organisers do not want to cause too much disruption or confrontation.

The Beijing IP Court decision involves a local patent owner Zhang Weidong. He owned a utilty model patent covering door patching pieces. He purchased the asserted product, witnessed by a notary public, at the Furniture Expo held in Beijing China International Exhibition Centre (Exhibition Center) in March 2015, and then filed a lawsuit against the landlord company that owns and runs the Exhibition Centre and the organiser company that runs the Furniture Expo. It is unclear why the patent owner did not name the manufacturer of the product in the lawsuit, which might be due to failure to locate the defendant.

In the judgment, the Court concluded that there is a patent infringement, and held that the landlord company is not liable because it fulfils all the obligations when signing the lease with the organiser company. But the Court had a different view about the liability of the organiser company. Without much reasoning, the court held that the trade fair organiser, as the lessor of the booth and the organiser of the expo, bears the obligations of appropriately regulating the business activities of the exhibitors as well as reviewing their qualifications. The court concluded that the trade fair organiser has not fulfilled the corresponding obligations and as a result has assisted the patent infringement under the Tort Law, and thus will be liable for the plaintiff's damage and reasonable expenses of Rmb20,000 in total. However, the Court did not elaborate how the trade fair organiser should fulfil its legal obligations. The judgment reads a bit too short. Perhaps the judges in the Beijing IP Court are getting overly busy.

China issued its trade fair IP protection measures, through joint efforts of various IP enforcement related agencies, including MOFCOM, the National Copyright Administration, the State Administration for Industry and Commerce and the State Intellectual Property office back in 2006. The measures stipulate some obligations that the trade fair organiser shall bear. For example, the organiser should review the exhibitors' projects at the initial stage when promoting the exhibition; the trade fair agreements should set out clearly the consequences of the IP infringement; the exhibitors shall fully cooperate with IP enforcement work taken by government agencies. For any trade fair lasting over three days, complaint desks shall be made available for IP rights owners. Also, IP rights owners also owe some duties for follow-up enforcement actions. Apparently, the government does not want IP rights owners to abuse trade fair actions to deal with same infringers again and again without taking other actions.

In this case, it is somewhat hard to understand why the plaintiff never named the direct infringer. It is true that China does not require naming direct infringement when contributory infringement is alleged. Earlier this year, the Supreme Court issued its judicial interpretation on patent trials, setting out tests for contributory and inducement liability. It would be much more revealing if the judges explained why the trade fair organiser was held to have knowingly assisted the patent infringers.

The expo industry is booming in China. The need to clean up infringement becomes more urgent for many IP rights owners. This case is encouraging but IP rights owners should continue the fight and develop clearer case precedents.

He Jing	Wang Ying

AnJie Law Firm26/F, Tower D, Central International Trade Center6A Jianguomenwai Avenue, Chaoyang District, Beijing 100022, PR ChinaTel: +86 10 8567 5988Fax: +86 10 8567 5999wuli@anjielaw.comwww.anjielaw.com