*AI-generated translation, for reference only.

Keywords

Civil litigation; infringement of utility model patent right; objection to jurisdiction; jurisdictional connecting point; online sales; place of the sales act; place of shipment by a party not involved in the case

Case Facts

Xiamen [REDACTED] Sanitary Ware Technology Co., Ltd. (hereinafter "[REDACTED] Sanitary Ware Company”) alleged that: it is the patentee of the utility model patent titled "Water Outlet Control Device" with Patent No. 201520371883.7. On June 15, 2022, under the supervision of notaries, its entrusted personnel used a mobile phone provided by the notary office, logged into the "Taote" APP, entered the "[REDACTED] Horticulture Hall Shop" operated by a [REDACTED] Nail Salon in Fenyang City (hereinafter "[REDACTED] Nail Salon”), and clicked to purchase the accused infringing product. After receiving the order, [REDACTED] Nail Salon purchased the corresponding goods from a third party, filled in [REDACTED] Sanitary Ware Company's address as the shipping address, and had the third party directly mail the goods to [REDACTED] Sanitary Ware Company (“drop shipping”). On June 29 of the same year, the notaries collected on its behalf a YTO Express parcel; the parcel slip indicated that the accused infringing product was sent from Dongxihu District, Wuhan City, Hubei Province, and bore the words and logo of "Pinduoduo." [REDACTED] Sanitary Ware Company therefore filed a lawsuit, with [REDACTED] Nail Salon as the defendant, before the Wuhan Intermediate People's Court of Hubei Province, requesting an order that [REDACTED] Nail Salon immediately cease the act of infringing the patent right at issue and compensate for economic losses of RMB 50,000.

 [REDACTED] Nail Salon raised an objection to jurisdiction, arguing that both the sales act of the accused infringing product and the defendant's domicile were located in Fenyang City, Shanxi Province, and that therefore the Wuhan Intermediate People's Court of Hubei Province had no jurisdiction over the case and should transfer the case to the Lüliang Intermediate People's Court of Shanxi Province, which had jurisdiction.

The Wuhan Intermediate People's Court of Hubei Province held that it was neither the court of the place where the accused infringing act occurred nor the court of the defendant's domicile, that it had no jurisdiction over the case, and that the case should be transferred to a court with jurisdiction. Accordingly, on February 15, 2023, it issued Civil Ruling (2022) E 01 Zhi Min Chu No. 2638: the case is transferred to the Taiyuan Intermediate People's Court of Shanxi Province for handling. Dissatisfied, [REDACTED] Nail Salon appealed. On June 15, 2023, the Supreme People's Court issued Civil Ruling (2023) SPC IP Civil Jurisdiction Final 170: 1. the Civil Ruling (2022) E 01 Zhi Min Chu No. 2638 of the Wuhan Intermediate People's Court of Hubei Province is revoked; 2. the case shall be tried by the Wuhan Intermediate People's Court of Hubei Province.

Judge's Opinion

The court's effective judgment held that, in the online environment, the place of the sales act provided for in Article 2 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Patent Dispute Cases, in principle, includes the principal place of business of the online seller, the place where the accused infringing product is stored, the place of shipment, or the place of sealing-up or seizure, etc.—none of which is subject to the will of the online purchaser; however, the delivery address of online shopping, which the online purchaser may freely choose, is generally not suitable to be regarded as the place of the online sales act. Specific to this case, the evidence provided by [REDACTED] Sanitary Ware Company preliminarily proved that [REDACTED] Nail Salon was the online seller of the accused infringing product, that the place of shipment of the accused infringing product was Wuhan City, Hubei Province, and that this place of shipment was not subject to the will of [REDACTED] Sanitary Ware Company as the online purchaser; therefore, this place of shipment constitutes the jurisdictional connecting point of the case. This case involves the situation in which "after the purchaser submits the order, the seller then purchases the corresponding goods from a third party and instructs that third party to deliver the goods directly to the purchaser" (referred to as "drop shipping"); the shipping party is not a party to the case, ships the goods according to the seller's instructions, and performs not a contractual relationship with the purchaser. Therefore, the third party's delivery act shall be deemed the seller's delivery act, and further, the third party's place of shipment shall be deemed the seller's place of shipment. The place of shipment of the accused infringing product in this case is located in Wuhan City, Hubei Province, and the Wuhan Intermediate People's Court of Hubei Province accordingly has jurisdiction over the case.

Judgment Digest

Where an accused infringing product is sold online, and the seller, only after the purchaser submits the order, purchases the corresponding goods from a third party and instructs that third party to send the goods directly to the purchaser, the third party's delivery act shall be deemed the seller's delivery act, and its place of shipment shall be deemed the seller's place of shipment; this place of shipment may constitute the jurisdictional connecting point of an infringement case in which that seller is the defendant.

Related Index

Article 29 of the Civil Procedure Law of the People's Republic of China (the version applicable to this case is Article 29 of the Civil Procedure Law of the People's Republic of China that took effect on January 1, 2022)

Article 2 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Patent Dispute Cases (Fa Shi [2015] No. 4)

First instance: Civil Ruling (2022) E 01 Zhi Min Chu No. 2638 of the Wuhan Intermediate People's Court of Hubei Province (February 15, 2023)

Second instance: Civil Ruling (2023) SPC IP Civil Jurisdiction Final 170 of the Supreme People's Court (June 15, 2023)