In 2020, JS exported goods that used FC's registered trademark and were seized by the Customs; FC filed a trademark infringement lawsuit, but the Court of Final Appeal ruled that JS's export behavior was “processing with supplied materials” and did not constitute trademark use, and dismissed FC's lawsuit. One year later, JS considered that the lawsuit, although dismissed, constituted a “malicious intellectual property lawsuit” and caused losses, and filed a lawsuit with the Shanghai Pudong New District People's Court, claiming for a huge amount of compensation (hereinafter referred to as “the case”). Mr. Liu Ming and Mr. Xiong Yanhua of Beijing King&Capital Law Firm represented the defendant FC and won the case after more than a year of trial.
This case is related to the legitimate use of FC's core trademark rights, and the successful litigation not only safeguards FC's legitimate rights and interests, but also has typical and reference value in intellectual property disputes, especially in the abuse of intellectual property rights in market competition.
Maliciously filed intellectual property litigation damage liability disputes (referred to as malicious intellectual property litigation) case, is a new civil case in 2011, a three-level case, under the “intellectual property rights, infringement disputes”. The lawyer searched and studied, over the past ten years, only more than 100 related cases, only dozens of cases really into the trial.
Judicial decision generally believe that the intellectual property lawsuit belongs to a kind of infringement, the constitutive elements include: 1. the actor filed intellectual property lawsuit without fact or legal basis; 2. the actor filed the lawsuit subjectively malicious; 3. the actor filed the intellectual property lawsuit maliciously caused damage to others, and the loss of intellectual property lawsuit and the actor filed maliciously has a cause and effect relationship. Among them, malice is the most critical elements. Patent and trademark infringement litigation for prior litigation, for example, the malice of the parties can be manifested in the acquisition of rights, can also be manifested in the exercise of the rights of the link.
Because “bad faith” belongs to the subjective category, according to the existing legal provisions is difficult to objectively determine and controversial.
In this case, JS Company claimed that FC Company filed a prior trademark infringement lawsuit with bad faith, the core reason is that FC Company's registered trademark there are a number of cases of disputes did not win, and in the court's relevant effective judgment in the evaluation of FC Company's legal representative of the registered trademark “contrary to the honesty and credit”, but still filed the same kind of lawsuit constitutes bad faith. Because of the relevant prior cases and judgment in the negative evaluation, make this case “bad faith” exclusion difficulty.
In the case, the attorney believed that the determination of “bad faith” should be based on whether FC had a proper right to file the prior trademark infringement lawsuit. The proper right basis should be based on the fact that the trademark has not been revoked or declared invalid. Abuse of rights includes abuse of substantive rights and abuse of litigation rights, and malicious prosecution prohibits the abuse of litigation rights, not the abuse of substantive rights. The determination of “bad faith” should adhere to the judicial concept of prudence and rationality, and in particular should not be broadly construed. Even if the party's intellectual property lawsuit is not supported, if the underlying rights are legal and stable, for repeated or different subjects of similar infringement can still be litigated to defend their rights, and can not be presumed to have improper litigation purpose because of the failure to win the case.
The case was highly controversial and the trial lasted for more than a year, with several hearings to verify the details. The lawyers also provided comprehensive representation, search reports, and evidence materials. The judgment of the court of first instance was 25,000 words long, which almost fully adopted the attorney's opinion, and comprehensively analyzed and argued the jurisprudence and facts of the intellectual property malicious litigation in the context of the case. Finally, it was found that FC had legal and factual basis for filing the prior trademark infringement lawsuit, and did not have the improper litigation purpose of infringing on JS, and rejected all the litigation requests of JS.
In the market competition, there are indeed a large number of intellectual property litigation as a competitive means to interfere with the normal operation of competitors, knowing that there is no possibility of winning the lawsuit. This case, as a typical intellectual property malicious litigation case, has guidance and reference value on the composition of “malice”, the boundaries between legitimate defense of rights and malicious litigation, and the difference between abuse of substantive rights and litigation rights.
