On the morning of May 29, 2024, the High People's Court of Jilin Province held a public hearing over a case arising from a design patent infringement of rice packaging. In this case, XU Jiaxin, a senior judge of the second grade of the People's Republic of China and the president of the High People's Court of Jilin Province, served as the chief judge. This hearing was live-streamed throughout via over 50 media and platforms, including the China Media Group account of the program At the Scene of the Trial, Tiktok, Kuaishou and Channel of Xinhua News Agency, Channel of People's Court Daily, and Tiktok and Weibo account of the High People's Court of Jilin Province.

Case Brief

Founded in 2012, Xu's Rice Company is a company engaged in the production and sale of rice in Qianguo County, Jilin Province. In September 2021, Xu's Rice Company received a notice from the Changchun Intermediate People's Court in which Wei, the patentee of the design, sued Xu's Rice Company for patent infringement. Wei then withdrew the lawsuit in October 2021. On July 7, 2022, Wei again filed a lawsuit against Xu's Rice Company for design patent infringement in Songyuan Intermediate People's Court (hereinafter referred to as the "Case No. 28"). In this regard, Xu's Rice Company entrusted the attorneys of Beijing Unitalen Law Office to respond to the lawsuit.

In handling Case No. 28, the undertaking attorneys of Unitalen found out that, regarding Evidence 2 submitted by the plaintiff, in the Patent Right Evaluation Report issued by the CNIPA, it has been determined that a patent right for design shall not be granted to the patent involved, and all of the three prior documents cited are patent documents of design of the packaging bags of Xu's Rice Company. Moreover, the patent involved has been declared to be invalid before the lawsuit filed by Wei. Therefore, Wei was suspected of infringing the lawful rights and interests of Xu's Rice Company by maliciously filing the IP lawsuit. After communicating with the client, the undertaking attorneys claimed counter-compensation in the lawsuit. In the ruling of the first instance, the Songyuan Intermediate People's Court dismissed the lawsuit filed by the plaintiff and ruled that the counter-compensation request may be brought forward in a separate lawsuit. Neither party appealed after.

After Case No. 28 was closed, the undertaking attorneys advised the client to strike back. On the one hand, the registered addresses of Xu's Rice Company and Mi Lao Da Rice Company are near to each other; and Wei sells small grain rice in Mengzi, Yunnan through Mi Lao Da Rice Company of Qianguo County, whose distributors used to act as agents in the sale of small grain rice of Xu's Rice Company, and thus Wei possesses a "subjective bad faith". On the other hand, Xu's Rice Company completed the design of the sued rice packaging bags as early as 2014 and is the original copyright owner. The packaging bags used by Mi Lao Da Rice Company were confusingly similar to those of Xu's Rice Company. Therefore, counterclaims can be filed to defend against Wei's abuse of the procedural rights and Mi Lao Da Rice Company's copyright infringement and unfair competition.

In May and August 2023, the attorneys of Unitalen, on behalf of the client, filed two main lawsuits (hereinafter referred to as "Case No. 38" and "Case No. 19" respectively) of rights protection in the court of the first instance against Wei's malicious lawsuit infringement case and Mi Lao Da Rice Company's copyright infringement and unfair competition case, respectively, formally initiating rights protection by striking back.

In Case No.38, the court of the first instance determined that Wei constituted malicious litigation and should compensate the plaintiff for 100,000 yuan. Wei was not satisfied with the ruling of the first instance and appealed to the High People's Court of Jilin Province. On May 29, after the public hearing, the High People's Court of Jilin Province pronounced in court that Wei constituted malicious litigation and changed the compensation amount to 60,000 yuan.

In Case No.19, the court of the first instance determined that the two defendants constituted copyright infringement and unfair competition, and ruled that the two defendants should compensate the plaintiff for 100,000 yuan in total. The two defendants were not satisfied with the ruling and lodged an appeal. The High People's Court of Yunnan Province made a ruling on the second instance on May 29, in which it was determined that the two defendants infringed the plaintiff's copyright, and that the compensation amount determined in the first instance was not inappropriate, but the judgment was changed to be that the act of the two defendants did not constitute unfair competition because the evidence submitted by the plaintiff was insufficient to prove the popularity of the packaging thereof.

At this point, from passive participation in patent infringement litigation to active counterattack, the attorneys of Unitalen filed counterclaims and initiated lawsuits of IP rights protection in accordance with the law, turning the tables on behalf of the client. In the end, the rulings of winning the final judgments on the second instance of the two cases were received on the same day. The legitimate rights and interests of the client were safeguarded, and the illegal acts were cracked down.

Comparison of the rice packaging involved

Typical Significance

As the first damage liability dispute case over IP litigation filed maliciously in Jilin Province, the trial of the case of "counterclaim against malicious lawsuit" was live-streamed via China Media Group, and the judgment was pronounced in court, which actively promoted to the public the relationship and legal boundaries between the protection of IP rights to promote innovation and the maintenance of fair competition and honesty and credit system.