Epoch is a Japanese toy manufacturer who owns the Chinese invention patent for “fusible bead toy” (Patent No. ZL201210134638.5). In 2016, Epoch purchased three types of bead toys manufactured by Moose, an Australian company, from a Taobao store named “Shanghai Jinxi Electronic Commerce Co., Ltd” (hereinafter referred to as Jinxi). After comparison, Epoch believed the purchased products are suspected of falling into the protection scope of the involved patent. As Jinxi has been deregistered, Epoch sued Moose the manufacturer, Musha the distributor, and Jinxi’s two individual shareholders at Shanghai Intellectual Property Court, requesting the Court to order the defendants cease the acts of infringement, and order Moose compensate for the economic losses and reasonable expenses of 1.323 million yuan. In response to the lawsuit, Moose argued that Epoch had failed to prove that Moose ever manufactured and sold the alleged infringing products in China, that Moose produced the alleged infringing products based on its own patented technology, and that the alleged infringing products do not have the technical features of Epoch’s patent, do not fall within the protection scope of the Epoch’s patent, and that the compensation claimed by Epoch lacks a calculation basis. At the same time, Musha and the two individual defendants also refuse to accept Epoch’s claims, arguing that they did not manufacture the alleged infringing products, and only acted as purchasing agent, and that the alleged infringing products have been from the Taobao store after Epoch’s purchase.
Whether the alleged infringing products were manufactured in China or not is one of the key issues of the case. Epoch presented a notarized copy of Moose’s official site, on which “AUSTRALIA, USA, CHINA, etc.” are listed under “Our Team”. Meanwhile, the indication of “Made in China” can be found on the package and manual of all three alleged infringing products. Shanghai IP Court held that, although the “Made in China” label on the alleged infringing products was to meet the origin requirement of imported and exported goods, the information of manufacturer and place of manufacture marked on the alleged infringing products serves as clear direction for consumers to trace the product origin and seek quality guarantee, and express intention to be treated as the manufacturer at the marked place of manufacture. In the absence of contrary evidence, Moose is considered as having manufactured the alleged infringing products in China.
Another key issue of this case is whether the alleged infringing products fall within the protection scopes of the claims of Epoch’s patent. After comparison, the court held that the alleged infringing products have the same technical features protected by Epoch’s patent. Moreover, the “bead dispensing system” (patent application number: CN200710145245.3) raised by Moose as prior art is found to be different from the alleged infringing products, and therefore Moose’s prior art defense was not supported.
In the judgement, Shanghai IP Court ordered that Moose and Musha shall immediately cease patent infringement activities, and that Moose shall compensate Epoch for the economic losses and reasonable expenses of 800,000 yuan. The judgment has entered into force.