Background
In July 2012, our client Swarovski AG found that a jewellery store selling crystal jewellery in Guangzhou was suspected to have infringed on several of their design patents. Therefore, our client instructed us to conduct investigations and take the corresponding legal measures based on our investigation findings.

Process
We first conducted an on-site investigation of the jewellery store in Guangzhou, finding that four categories of the products were suspected to constitute infringements of four design patents of our client, and we also found that the products suspected of patent infringement were sourced from a factory in Dongyang. Thereafter, we conducted an in-depth investigation of the factory and identified two distributors of the factory in Yiwu. Based on our findings, we successfully obtained two categories of products suspected of constituting patent infringement from the aforesaid two distributors and another four categories of products suspected of the same from the jewellery store in Guangzhou by way of notarized purchase, and notarized the sales promotions on the website of the jewellery store.

After obtaining sufficient evidence, we filed a patent infringement lawsuit with the competent court and also applied for evidence preservation at the same time. During the course of evidence preservation, a large number of patent infringing products were seized. We therefore filed an application for changing our claims to increase the amount of damages in the corresponding case, and filed a separate patent infringement lawsuit at the same time.  To better support our claims for damages, we submitted evidence such as relevant materials regarding the sales promotions and the selling prices of the patented products of our client.

Result
The case was ultimately closed through settlement of the parties with the defendant paying RMB280,000 in damages on the spot and providing a written guarantee stating that it would not engage in any patent infringing activities within the valid period of the patents concerned.

Significance
While foreign clients are paying more and more attention to the Chinese market, how to effectively crack down on infringing activities has also become a focus of attention of foreign clients. There is no doubt that the most direct and effective approach to putting a stop to infringing activities is by targeting the sources of products.  In practice, as the efforts in the crackdown on infringing activities increase, the  infringers and their activities are becoming more and more elusive. How to crack down on infringing activities by tracking from the sellers to sources of production not only tests our investigators but also raises higher requirements of the agent handling the case concerned to deal with the case from a more overall and strategic perspective.

In addition, besides ceasing the infringement, a large amount of damages may be a better deterrent for infringers. Given that the efforts put into investigating patent infringement cases are relatively weak as compared with those in trademark cases, the damages awardable in patent infringement cases lack forceful support in terms of evidence. Thus, how to collect more favourable evidence from multiple sources to support the claims for damages is another test facing the agents handling such cases.

When dealing with the case discussed herein, on the one hand, we obtained as many infringing products as possible for the purpose of evidence collection to fight against the infringer from the perspective of the breadth of the infringing products; on the other hand, we actively cooperated with the court in relation to evidence preservation to fight against the infringer from the perspective of the quantity of the infringing products by seizing as many infringing products as possible. In addition, we took the factors relating to the patents of our client such as the sales promotions of the patented products and the popularity of the plaintiff into account, which ultimately guaranteed the relatively favourable outcome of the case.