Reading tips:

1. The mediation agreement should specify and specify the infringing molds that need to be destroyed, including the location, specifications, model, quantity, and other specific information of the molds;

2. The compensation clause for breach of contract in the mediation agreement can be used as the basis for compensation in the second lawsuit. In the execution procedure, the executing judge cannot directly determine whether the infringement of patents has been committed, whether it constitutes infringement, and what kind of patent rights have been infringed, which should be determined through substantive examination through the trial procedure.

【Case number】

First instance:

Zhejiang Taizhou Intermediate People's Court (2014) Zhetai Zhimin Chu Zi No. 121/122 (March 11, 2015)

Execution:

Zhejiang Taizhou Intermediate People's Court (2015) Zhetai Zhimin Zi No. 179/181

Objection to execution:

Zhejiang Taizhou Intermediate People's Court (2015) Zhetai Zhiyi Zi No. 7/8

(October 20, 2015)

【Case and Judgment】

Cadier Co., Ltd. is an international well-known furniture manufacturer in Italy. It applied to the China National Intellectual Property Administration for the infringement design patent of two chairs on September 19, 2008 and December 28, 2009, and was authorized on October 7, 2009 and October 28, 2009 respectively (ZL20083014693.4, ZL20083014692. X). TDH Company is a local leisure furniture manufacturer in Taizhou, and TDN Company is an affiliated company of TDH Company. On December 3, 2013, Cartier Co., Ltd. purchased multiple chairs from TDH Company through notarization on TDN Company's Alibaba platform, and notarized the corresponding product images on TDH Company's website. Cardiel Company filed a lawsuit with the Intermediate People's Court of Taizhou City, claiming that the two products purchased by TDH Company have fallen within the scope of design patent protection under its patent numbers ZL20083014693.4 and ZL20083014692. X, demanding that: 1. TDH and TDN Company cease all acts of infringement of the aforementioned two patents; 2、 TDH and TDN companies shall compensate Cartier Company for economic losses and reasonable expenses incurred in investigating and stopping infringement behavior (each) of 500000 yuan.

After being mediated by the Intermediate People's Court of Taizhou City, both parties voluntarily reached the following mediation agreement on February 12, 2015 regarding the two cases (2014 Zhetaizhiminchu Zi No. 121/122): Firstly, TDH Company and TDN Company promise to respect the intellectual property rights owned by Cardiel Co., Ltd; 2、 Starting from the effective date of this agreement, TDH and TDN will no longer manufacture, sell, or promise to sell products that fall under the design patents ZL20083014693.4 and ZL20083014692. X of Cartier AG, and within 7 days from the effective date of this agreement, under the supervision of Cartier AG's agent, TDH and TDN will destroy all molds of these products; 3、 After the effectiveness of this agreement, if TDH Company and TDN Company violate the provisions of this agreement and continue to manufacture, sell, or promise to sell the products mentioned in Article 2 of this agreement, Cardil Corporation has the right to demand that TDH Company and TDN Company immediately stop the infringement, and demand that TDH Company and TDN Company jointly pay a penalty of 300000 yuan per product; 4、 Within 7 days from the effective date of this agreement, TDH Company and TDN Company shall pay RMB 80000 to the account designated by Cardil AG; 5、 The acceptance fee for this case is 8800 yuan, with a 50% reduction of 4400 yuan charged, which will be borne by TDH and TDN companies; 6、 In order to make the public aware that Cardil Corporation is exercising and protecting its intellectual property rights in China, Cardil Corporation has the right to disclose the results of both cases and the content of this agreement.

After the mediation agreement was signed and a mediation letter was issued by the court, Cardil Corporation applied to the Taizhou Intermediate People's Court for compulsory execution on the grounds that TDH and TDN companies did not destroy the involved molds, nor did they stop promising to sell products belonging to Cardil Corporation's design patents ZL20083014693.4 and ZL20083014692. X, which violated the provisions of Article 1 and Article 3 of the mediation agreement TDN Company has paid a total of 600000 yuan as a penalty for breach of contract. Cartier Co., Ltd. has submitted a notarized certificate of promise to sell infringing products on the website content of TDH Company after mediation to the court as evidence to prove that TDH Company still has the fact of promise to sell infringing two patented products. Afterwards, the executed parties TDH Company and TDN Company respectively raised written objections to the execution.

The dissenters TDH Company and TDN Company both claim that they have fully fulfilled the performance obligations determined in the (2014) Zhejiang Taiwan Zhimin Chu Zi No. 121 Civil Mediation Letter, that is, they have paid 80000 RMB to Cardiel Co., Ltd., and there is no act of manufacturing, selling (including export), or promising to sell the design patent numbers ZL20083014693.4 and ZL20083014692. X products involved in the case, and the related infringing molds do not exist. There is a lack of factual and legal basis for the application for execution by Cardil Corporation. The reasons are as follows: 1. Regarding the destruction of product molds that infringe on Cardil Corporation's design patents ZL20083014693.4 and ZL20083014692. X. Firstly, in the civil mediation agreement, both parties have not confirmed whether the opponent has infringed on the patents involved in the case of Cardiel Corporation, and there is no issue of destroying the infringing molds. Secondly, both parties have not made it clear which product or corresponding mold of the objector infringes on the patent involved. If Cardil AG believes that the product mold currently owned by the objector infringes on its patent, Cardil AG should clarify which product mold of the objector infringes on its patent rights and should not refer to it as a "mold that infringes on its patent rights" in a general manner, The determination of whether infringement is a matter of substantive rights judgment should also be filed in a separate case and confirmed by the court's judgment. The enforcement department of the court should not make infringement judgments. Finally, in fact, the objector has never owned the so-called "infringing mold", and the application matter of Cartier AG cannot be executed in fact. 2、 Regarding the payment of a penalty of 300000 yuan (totaling 600000 yuan in both cases) for violating the civil mediation agreement. The objector does not have any breach of contract as claimed by Cardil AG, and Cardil AG cannot directly apply the breach clause in the execution procedure of this case. Firstly, both parties in the mediation agreement have not confirmed whether the dissenting party has previously infringed on the patent rights of Cardil Co., Ltd. Although the mediation agreement stipulates that the merger and payment of 80000 yuan to Cardil Co., Ltd. with another case is only a settlement of the previous dispute, the purpose of setting the breach clause is to prevent the dissenting party's subsequent behavior, rather than directly applying it in this case. Secondly, the civil mediation agreement did not specify which product of the objector infringed on the patent in question, nor did it specify that the webpage links provided by Cardiel AG belong to the objects that should be deleted. The judgment on whether it constitutes infringement of patent rights is a matter of substantive examination and a problem to be solved in the trial process. Even if Cartier AG believes that the products promised by the objector infringe upon its aforementioned patent rights, it should file a separate lawsuit and confirm through a judgment that the products promised by the objector have infringed upon its patent rights before considering whether to apply the breach clause, rather than directly applying for enforcement if the premise has not yet been determined. Once again, the webpage notarization provided by Cartier AG cannot prove that the corresponding promised products for sale have fallen within the scope of protection of the involved patent. The notarized images provided by Cartier AG are only a perspective view of the promised products for sale, and cannot reflect the full picture of the products. It is not possible to conduct a comprehensive infringement comparison, and naturally, it cannot be determined whether it constitutes infringement of patent rights. Finally, although the link provided by the objector appears as the objector's company webpage, it is managed by a third-party company and has been deleted. In summary, in the absence of clear execution targets and the existence of default situations, Cardil Corporation mistakenly applied the default clause and directly applied for compulsory execution, lacking factual and legal basis. Please reject its execution request.

The applicant for enforcement, Cardiel Corporation, argues that firstly, the civil mediation agreement stipulates that the two dissenters destroy all the molds of "these products", which of course refer to the products involved. Therefore, it can be confirmed that when the mediation agreement was signed, the two dissenters confirmed the existence of these product molds. Otherwise, it is impossible to agree to "destroy" the molds within seven days, so their claim that "there are no infringing molds" is completely unfounded. In addition, the two dissenters agreed to destroy the involved molds, which is the main reason why Cardil AG agreed to resolve the case through mediation. 2、 According to the notarized documents provided by Cardil Corporation, the dissenters still promise to sell two products with the same name, image, and technical parameters as the accused product after the mediation agreement takes effect, which constitutes a violation of the mediation agreement. Therefore, the two dissenters need to bear corresponding compensation responsibilities to Cardil Corporation in accordance with the provisions of the mediation agreement.

After trial, the court found that the design patent numbers ZL20083014693.4 and ZL20083014692. X involved in the (2014) Zhejiang Taiwan Zhimin Chu Zi No. 121 and 122 were not determined in the civil mediation agreement. The fourth item of the mediation agreement, namely the payment of RMB 80000 by TDH Company and TDN Company to Cartier Co., Ltd., has been fulfilled. The focus of the dispute between both parties is whether the execution application of the applicant meets the conditions for filing and execution, that is, whether the contents of Article 2 and Article 3 determined in the (2014) Zhetai Zhimin Chu Zi No. 121 Civil Mediation Agreement can be enforced. In this case, the applicant for enforcement, Cartier Co., Ltd., applied for the execution of Article 2 of the mediation agreement, which states that the two objectors destroyed all the molds that fell into the patented product in question. However, the mediation agreement did not specify the specific molds that needed to be destroyed, and the applicant for enforcement was unable to provide specific information about the location, specifications, models, quantities, and other details of the molds. Both objectors also believed that there were no molds that needed to be destroyed, Therefore, the execution target of this content is unclear and cannot be enforced. The reason why the applicant for enforcement applies for the execution of Article 3 of the mediation agreement and the two dissenters jointly pay a penalty of 300000 yuan is that the two dissenters violated the agreement and continued to promise to sell products falling into the involved patent, which the two dissenters denied. After reviewing the notarized materials provided by the applicant for enforcement, our court cannot directly determine whether the two dissenters have committed infringement, whether the content of the notarized website constitutes infringement, and what kind of patent rights have been infringed, which should be determined through substantive examination through the trial process. In summary, the conditions for the application for execution by the applicant are currently not met, and if it has been accepted, it should be rejected. The ruling is to reject the execution application of the applicant, Cardil Corporation.

【Lawyer comments】

In the case of patent infringement dispute, mediation can quickly resolve the dispute and stop the infringement compared with the judgment. The content of mediation is often that the parties to the mediation reach consensus. The court only needs to confirm that mediation does not violate the principle of voluntariness and that the content of the mediation agreement does not violate the law. The mediation agreement can be confirmed in the mediation statement. If the content of the mediation agreement is improper, The effectiveness of the lawsuit may be greatly compromised. In this case, the patent holder Cardiel Corporation had hoped to quickly resolve the case through mediation to achieve the goal of not only stopping TDH Company from infringing and destroying the molds of infringing products, but also effectively stopping and preventing TDH Company from infringing on its patent rights again. However, due to the improper provisions of the mediation agreement, The provisions of the second and third articles of the mediation agreement have to some extent become fictitious clauses, resulting in the inability to effectively achieve the purpose of the mediation agreement.

The main reason for this is that the plaintiff did not specify the specific content of the performance when setting the corresponding terms of the mediation agreement, and failed to grasp that the judgment of whether it falls within the scope of patent protection (infringement judgment) in the case of infringement of patent rights (intellectual property) disputes is a core issue to be solved in the trial process. This judgment is quite abstract and professional, and cannot be completed by the executing judge in the execution process. According to Article 463 (1) of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, the effective legal documents that the parties apply for execution by the people's court shall meet the following conditions: "1. The subject of rights and obligations shall be clear; 2. The content of payment shall be clear." TDH Company, as stipulated in the mediation agreement in this case TDN Company has violated the provisions of "no longer manufacturing, selling, or promising to sell products that fall under the design patents ZL20083014693.4 and ZL20083014692. X of Cartier AG" and "destroying molds that fall within the scope of patent protection". As the mediation agreement did not specify whether the TDH products in question are products that fall under Cartier's design patents ZL20083014693.4 and ZL20083014692. X, So if we want to execute the execution request of Cartier Company, the execution judge must make a judgment on the specific product mold and whether the promised sales products claimed by Cartier Company fall within the protection scope of Cartier ZL20083014693.4 and ZL20083014692. X appearance design patents. Obviously, this is not a matter to be solved in the execution procedure, and Cartier Company's execution request cannot be supported naturally.

Therefore, in this case, if Cardil Corporation can directly destroy the mold of a certain product of TDH in the mediation agreement, or if it is agreed that "TDH Corporation and TDN Corporation will no longer manufacture, sell, or promise to sell products belonging to Cardil Corporation's design patents ZL20083014693.4 and ZL20083014692. X", it can further clarify "including but not limited to a certain product of TDH", as well as the specific forms of infringement, If the specific webpage links or product images claimed in the execution application of Cartier Corporation are attached, TDH Corporation may find it difficult to exempt the huge breach of contract (compensation) liability stipulated in Article 3 of the mediation agreement. Of course, Cardil Corporation could have pursued TDH Corporation's corresponding infringement liability through separate litigation, but according to the spirit of the Supreme Court's (2013) Min Ti Zi No. 116 judgment, the agreement on the amount of breach of contract in the mediation agreement is only a calculation method agreed upon by both parties in advance regarding the losses suffered by the rights holder due to infringement or the benefits obtained by the infringer due to infringement in the future, The court can directly determine this as the basis for compensation for damages, not as a transaction contract between the right holder and the infringer. In this case, even if TDH Company still engaged in infringement of promised sales after the signing of the mediation agreement, it is not sufficient to prove that the act caused damage to the rights holder or TDH had profits. Therefore, even if Cardil Corporation filed a separate lawsuit, the court cannot directly apply the 300000 penalty stipulated in Article 3 of the mediation agreement to directly determine TDH Company's liability.

From the perspective of the handling process of this case, the author believes that when setting specific mediation agreement clauses in handling intellectual property infringement disputes, the following points should be noted: firstly, when setting a stop infringement clause, in addition to agreeing to stop infringing specific rights, it is also necessary to clearly list the specific forms of infringement included; 2、 If there are many infringing products and product molds, the court and all parties involved can confirm the quantity of infringing products that should be destroyed and the corresponding number of molds on site under the supervision of the handling judge, and lock or destroy them during the process of signing the mediation agreement; 3、 If there is a need to delete the infringing webpage content, the specific website address of the corresponding link must be specified in the mediation agreement; 4、 When setting the penalty (compensation) clause that the infringing party should bear for continuing to issue the infringing act, if the specific right holder wishes to directly apply the breach clause through the execution procedure, the mediation agreement must specify the specific form of infringement prohibited from occurring.