How to Stop Infringement and Get Proper Compensation
This article was originally written by KANG Liangyu in Chinese, titled “Adding Legal Representatives/Actual Decision Makers as Joint Infringers in Intellectual Property Infringement Cases” and published on the wechat official account of Tai IP. With KANG’s consent, it is now translated into English (with edits) and republished here.
Given the stringent legal requirements for proving damages and the sophisticated strategies employed by infringing parties to evade compensation—particularly when the defendant company lacks sufficient funds to satisfy any potential judgment—plaintiffs often find themselves at a disadvantage in combating infringement. By including the legal representative or the actual decision-maker of the defendant company as a joint infringer in intellectual property infringement cases, we can more effectively halt ongoing infringement and facilitate the realization of the plaintiff's claims.
In judicial practice, for the court to allow the request to add the legal representative or actual decision-maker as a joint infringer in intellectual property infringement cases, the legal representative or actual decision-maker needs to be (i) shareholders of the defendant company; or (ii) joint wrongdoer in the infringement case. If so, the plaintiff can persuade the court to deny the company's legal personality based on Article 23 of the Company Law of the People's Republic of China, thereby holding the legal representative or actual decision-maker jointly liable; or persuade the court to render the legal representative or actual decision-maker jointly liable for the damages because of their joint commission of the intellectual property infringement, in accordance with Article 1168 of the Civil Code regarding joint infringement. For the purpose of this article, we will focus on analysis of the joint commission of the intellectual property infringement.
As is well known, there are four elements of tort law: the tortuous act, intent or negligence of tort, damages, and the causation between the tortuous act and the damages. When the tortuous is committed by multiple parties, they can be further divided into joint tortfeasors, instigators, and joint dangerous acts wrongdoers. Joint infringement in the field of intellectual property is still consistent with the aforementioned classification of general tort law. When the legal representative or actual decision maker uses the company as a tool for committing infringement, the court is willing to recognize that the legal representative and the company have conspired or jointly recognized the illegal act, leading to the same damage consequences, thus allowing the corporate veil to be pierced and determining that the legal representative or actual decision maker should jointly bear the consequences of the company's infringement.
For example, in the case of Jiaxing City Zhong Chemical Co., Ltd., Shanghai Xin New Technology Co., Ltd. v. Wang Group Co., Ltd., Ningbo Wang Technology Co., Ltd. regarding the infringement of trade secrets (Case No. (2020) Supreme Court Intellectual Property Civil Final 1667), the Supreme Court found that the defendant company was established specifically to implement the theft of trade secrets for the production of vanillin, considering the entire planning process of the project, the construction of the production line, and the activities since its establishment. Additionally, the court noted that the legal representative of the defendant company, Wang Guojun, actively participated in the alleged infringing acts, signing the "Vanillin Technology Cooperation Agreement" with outsiders and enticing them to disclose the involved trade secrets through cash and equity. Thus, the court recognized the legal representative of the defendant company as a joint infringer.
Another example is the case of Sakura Kitchen (China) Co., Ltd. v. Suzhou Sakura Technology Development Co., Ltd., Zhongshan Sakura Integrated Kitchen and Bath Co., Ltd. regarding trademark infringement (Case No. (2015) Su Intellectual Property Civil Final 00179). The court held that, subjectively, Tu Rongling, as the legal representative of Suzhou Sakura Electric Co., Ltd., had a history of infringing on the intellectual property rights of Sakura Kitchen. He should have been aware of the registered trademarks of the "Sakura" series and the relevant information regarding the "Sakura" name. In spite of the court's ruling that Suzhou Sakura Electric Co., Ltd. constituted infringement, Tu Rongling subsequently established Suzhou Sakura Company, Suzhou Sakura Company Zhongshan Branch, and Zhongshan Sakura Kitchen and Bath Company, demonstrating clear subjective malice. Furthermore, since the involved trademark had been revoked, it indicated that Yu Liangcheng, as the legal representative of Zhongshan Sakura Integrated Kitchen and Bath Company, was also aware of the registered trademarks of Sakura Kitchen and the distinctions from its own trademarks. Therefore, the court concluded that the legal representatives should jointly bear the consequences of the infringement with the defendant company.
In intellectual property infringement cases, adding the legal representative or actual decision-maker as a joint infringer is not only an important means for the plaintiff to realize their legitimate rights and interests but also an effective sanction against infringing behavior. By holding the legal representatives and actual decision-makers accountable, the court can reveal the true decision-makers behind the company, ensuring that infringing acts receive the legal punishment they deserve.
In actuality, although there are certain difficulties in evidence collection, through sufficient evidence and reasonable legal grounds, the plaintiff can still successfully include the legal representative or actual decision-makers within the scope of joint infringement. This not only helps to increase the success rate of infringement cases but also provides strong support for maintaining the legitimacy and effectiveness of intellectual property rights.
