By Shi Yusheng and Xia Fan, King & Wood’s IP Litigation Department

The newly promulgated Tort Law of the People’s Republic of China came into force on July 1, 2010. The Tort Law, positions itself as a fundamental doctrine in the protection of one’s civil and property rights in China. Intellectual property rights, such as copyrights, patent rights, trademark rights, are included in the scope of protection under the Tort Law. Accordingly, relevant provisions of the Tort Law will have substantial impact on  IPR infringement. While there are many intersects, one major impact is discussed below.

Before the promulgation of the Tort Law, the relevant IP laws, such as the Trademark Law of the People’s Republic of China ("Trademark Law"), the Patent Law of the People’s Republic of China ("Patent Law"), and the Copyright Law of the People’s Republic of China ("Copyright Law"), do not address issues in relation to contributory infringement and consequential liability.

Contributory infringement of IPRs refers to an act where a party provides assistance to another party in their IPR infringement, for example, intentionally providing an operations site for counterfeiters or intentionally providing materials or components to counterfeiters for manufacturing patented products. In  practice, there is also no consensus on how to determine legal liabilities for contributory infringement. For example, Paragraph 2 of Article 50 of the Implementing Regulations of the Trademark Law of the People’s Republic of China ("Implementing Regulations") listed a number of acts which can be deemed as contributory infringement of trademark rights. However, the list cannot cover all types of such infringement. Similarly, the Beijing Higher People’s Court issued the Opinions on Patent Infringement Issues (Trial Implementation) ("Opinions") in 2001, in which the Court provided more specific descriptions on determination of contributory infringement of patents.

In practice, the Opinions may only be used as reference in local patent infringement trials, and lack legislative authority in all patent infringement trials nationwide. Furthermore, the Interpretation of the Supreme People’s Court on Issues Relating to Application of Law in the Trial of Copyright Disputes over Computer Network ("Interpretation on Copyright Disputes") and the Regulations on the Protection of the Right to Network Dissemination of Information ("Regulations on Information Dissemination") regulate contributory infringement acts in cases in relating to internet copyright infringement, but there are also insufficiencies in relation to the applications of these laws and regulations.

An increasing number of IPR infringement lawsuits involve claims against infringers for contributory infringement. For example, in Louis Vuitton v. the Beijing Xiushui Haosen Clothing Market Company and Taiyuan Heavy Machinery Group Company v. Taiyuan Electronic Systems Engineering Corporation, there were no statutes which provided direct reference to contributory infringement. As such, the judges could only rely on the provisions regarding contributory infringement of civil rights in the General Principles of the Civil Law of the People’s Republic of China ("General Principles"). However, the General Principles merely address contributory infringement in principle and does not provide clear indications as to whether the party in contributory infringement who provide help to the infringers of if direct infringement  bears legal liability or the type of such liability. In short, there is a lack of a legislative framework the People’s Courts can apply when determining the legal liabilities of contributory infringement in IPR infringement trials.

The Tort Law fills the legislative void and solidifies the legal basis in preventing contributory IPR infringement. Paragraph 1 of Article 9 of the Tort Law provides that "[a] person who abets or assists another person in committing a tort shall be jointly and severally liable with the tortfeasor." This is to say that, a person who assists another person’s tortious infringement conduct in relation to IPR will constitute contributory infringement and shall be jointly liable. Compared with the listing methodology used in the Implementing Regulations, the expression of "assist" enables judges to significantly expand the room for judicial application of this law.