I. Practical Dilemmas of Evidence Collection in Intellectual Property Cases

In intellectual property infringement cases, infringing acts are characterized by transience and concealment. Moreover, right holders and their attorneys can only investigate and collect evidence on their own initiative in most cases, and may apply for public power intervention only when necessary. For this reason, evidence collection has long been a difficult and key issue in intellectual property cases. Faced with the practical dilemma that right holders have extremely limited capacity and means for evidence collection, entrapment evidence collection — as an active and efficient method — has been widely applied in practice for its advantage of directly obtaining infringing evidence.

However, its evidentiary validity is controversial in judicial practice. When a case is brought to court, the defendant often raises defenses such as “the plaintiff purchased counterfeit goods with full knowledge and induced me to infringe” or “the plaintiff conducted fishing enforcement and entrapment evidence collection”. In such circumstances, if the plaintiff’s evidence collection involves entrapment, the evidentiary validity must stand up to judicial review; otherwise, the plaintiff faces the significant litigation risk of the case being dismissed, resulting in a total loss.

This paper aims to analyze the judicial determination of the validity of entrapment evidence collection in intellectual property cases by sorting out the concept and classification of entrapment evidence collection, combined with relevant legal principles, classic cases and judicial inclinations of courts.

II. Relevant Legal Provisions and Classification of Entrapment Evidence Collection

In the field of intellectual property adjudication, entrapment evidence collection refers to a method whereby a right holder or its agent, without disclosing its real identity, designs a purchase scenario to induce the opposing party to commit an infringing act and fix the evidence, for the purpose of obtaining evidence of the opposing party’s infringement.

(I) Legal Provisions

In 2002, Cao Jianming, Vice President of the Supreme People’s Court (SPC), stated at the National Symposium on Intellectual Property Adjudication of Courts and Award Ceremony for Excellent Intellectual Property Judgment Documents: “There is no provision on entrapment evidence collection in China’s laws, nor is this concept adopted in judicial practice. Relevant theoretical and practical issues may be explored and studied.” This indicates that entrapment evidence collection had already become a concern in intellectual property adjudication as early as 2002.

In the same year, Article 8 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Disputes over Copyright (effective October 15, 2002) made preliminary provisions on entrapment evidence collection, but such provisions were limited to copyright cases, and other intellectual property cases could only apply them by analogy.

Paragraph 1 of Article 7 of the Several Provisions of the Supreme People’s Court on Evidence in Intellectual Property Civil Litigation (hereinafter referred to as the Provisions on Intellectual Property Evidence, issued November 16, 2002) further filled the gap in legal provisions on entrapment evidence collection in intellectual property cases. It confirmed that evidence obtained by entrapment evidence collection in intellectual property litigation may be admitted, and affirmed the legality of opportunity-providing entrapment. Paragraph 2 of Article 7 stipulates that evidence obtained by a right holder shall not be admitted if the alleged infringer committed an intellectual property infringement solely based on the right holder’s evidence collection act. This provision restricts right holders from directly inducing others to infringe and prohibits acts that disrupt market order.

In addition, entrapment evidence collection shall be subject to general evidence rules. Evidence shall not be obtained in violation of mandatory legal provisions, in serious violation of public order and good morals and the principle of good faith, or in a manner that harms public interests and the legitimate rights and interests of others.

(II) Classification

According to existing academic research and practical views, entrapment evidence collection is generally divided into opportunity-providing entrapment and intent-inducing entrapment.

Opportunity-providing entrapment means the infringer already has the intent to infringe and has engaged in continuous infringing acts, and the evidence collector provides an ordinary transaction opportunity to reproduce the infringing act in a controllable environment. The evidence collection act is passive. For example, a right holder, knowing that a store has long sold infringing products, entrusts another person to purchase the products and fixes the infringing evidence through notarization. This method aims to discover or prove infringing facts without harming public interests or the legitimate rights and interests of others. Therefore, evidence obtained under such circumstances may assist the right holder in filing a lawsuit.

Intent-inducing entrapment means the infringer had no intent or act of infringement initially, but developed criminal intent and committed infringement only due to the active inducement and abetment of the evidence collector. The infringer’s intent to infringe is induced, and the evidence collection act is “active” or “deceptive”. For example, an evidence collector lures a law-abiding small workshop with high profits to customize and produce liquor bearing its trademark. This method is often negatively evaluated because it risks harming public interests and the legitimate rights and interests of others, increases the total number of illegal acts in society, and disrupts market order.

In plain terms, in judicial determination, evidence obtained by targeting an “inveterate infringer” who “was already in the wrong” may be admitted as infringing evidence. If the evidence collector “abetted the infringer to do wrong”, the relevant evidence cannot achieve the probative purpose claimed.

III. Judicial Review of the Evidentiary Validity of Entrapment Evidence Collection

Against the dilemma of “difficulty in burden of proof” in intellectual property rights protection, entrapment evidence collection has become a sharp tool for right holders to fix evidence, yet it can easily slip into the gray area of inducing infringement. Through long-term judicial practice, China’s judicial organs have not adopted an across-the-board negative or affirmative attitude toward entrapment evidence collection, but have formed a key distinguishing standard based on the principle of good faith.

Two landmark judgments issued successively by the Supreme People’s Court and the Jiangsu Higher People’s Court — one affirmative and one negative — have defined the legal boundary between opportunity-providing entrapment and intent-inducing entrapment. On the whole, the validity of opportunity-providing entrapment is recognized, while that of intent-inducing entrapment is rejected.

This section elaborates on the characteristics and drastically different judicial consequences of the two evidence collection methods through two landmark typical cases — the Peking University Founder Group Corporation Case and the Huang Huangjun Case — so as to clarify the legal boundary of evidence collection for intellectual property rights protection.

(I) A Milestone for Opportunity-Providing Entrapment — The Peking University Founder Group Corporation Case Establishes a New Path for Intellectual Property Rights Protection

The general recognition of opportunity-providing entrapment by courts originates from the copyright infringement dispute between Peking University Founder Group Corporation and Beijing Gaoshu Technology Co., Ltd., known as “China’s First Case of Entrapment Evidence Collection”. The judgment of the Supreme People’s Court established the core adjudication rules for entrapment evidence collection.

In this case, the plaintiffs, Peking University Founder Group Corporation and Honglou Research Institute, were the copyright owners of software including Founder Century RIP Software. When installed on an independent computer and connected to a laser phototypesetter, the above software could realize its functions. In 2001, the plaintiffs dispatched employees to sign a contract with the defendant, Gaoshu Tianli Company, in their personal capacity. The contract stipulated the supply of laser phototypesetters without RIP software. However, the defendant installed pirated Founder RIP Software and Founder Wenhe Software on two computers prepared by the plaintiffs. A notary public office preserved the computers installed with pirated software and the pirated software. In September of the same year, the plaintiffs sued the defendant in court for copyright infringement.

The case underwent three trials, and courts at all levels held different views on the validity of entrapment evidence collection. The court of first instance held that the evidence of the defendant’s infringement obtained by the plaintiff through entrapment evidence collection was not prohibited by law and should be recognized. It ruled that the defendant constituted copyright infringement. Dissatisfied, the defendant appealed to the court of second instance. The court of second instance held that the plaintiff’s evidence collection method violated the principle of fairness and would disrupt normal market order if widely adopted, thus refusing to recognize the method. Under the reasoning of the second instance court, the compensation amount was substantially reduced.

After the application for retrial filed by Peking University Founder Group Corporation and Honglou Research Institute with the second instance court was rejected, they filed an application for retrial with the Supreme People’s Court.

The Supreme People’s Court affirmed the legal validity of the entrapment evidence collection conducted by the plaintiffs. It held that the evidence collection method did not violate mandatory provisions of laws and regulations. Without such method, the plaintiffs could not obtain direct and effective evidence, nor discover other infringing acts of the defendant. There was no violation of fairness or disruption of market order, and the purpose was to protect legitimate rights and interests and crack down on infringement.

Where infringing acts are extremely concealed and difficult to obtain through conventional means, adopting such evidence collection method helps solve the difficulty of evidence collection in such cases and conforms to the legal spirit of strengthening intellectual property protection.

(II) Rejection of Intent-Inducing Entrapment — The Huang Huangjun Case Warns Against Inductive Rights Protection

The case of Huang Huangjun v. Guimou Household Goods Factory (infringement of design patent right) was selected as one of the Top 10 Typical Intellectual Property Judicial Protection Cases of Jiangsu Courts in 2023, and is also a typical case where judicial organs reject intent-inducing entrapment.

The basic facts are as follows: Huang Huangjun was the design patent owner of a “USB flash drive”. After the patent was granted, he had not produced the patented product involved or licensed others to use the patent. One day, Huang Huangjun entrusted an evidence collector to inquire the customer service of Guimou Household Goods Factory’s store on 1688.com whether it had a product named “Creative Pattern USB Flash Drive, Retro Style”. The collector claimed the previously collected link was unavailable and sent a picture of a USB flash drive with the same appearance as the alleged infringing product.

The customer service confirmed availability and sent the product link. The evidence collector placed an order for one product. On the same day, the factory purchased one “Creative Pattern USB Flash Drive, Retro Style” from its Pinduoduo store and filled in the recipient address provided by the evidence collector.

Comparison showed that the alleged infringing product was nearly identical to Huang Huangjun’s patented design with only minor differences, constituting a similar design. Huang Huangjun sued the factory in court based on this evidence, claiming infringement of his design patent right.

Investigation found that Guimou Household Goods Factory had not sold infringing products to anyone other than the single product sold for Huang Huangjun’s evidence collection. Huang Huangjun failed to provide evidence such as the source of the product link he claimed to have collected or the USB flash drive picture sent to the customer service, and had collected evidence in the same manner for several times.

Based on the above facts, the court held that Guimou Household Goods Factory had no intent to sell infringing products and committed infringement only due to Huang Huangjun’s inducement (e.g., raising purchase demand and sending product pictures), which constituted intent-inducing entrapment. The evidence obtained illegally should be excluded, and the claim lacked factual basis and was dismissed.

The court explicitly ruled that evidence obtained by inducing the alleged infringer to sell infringing products solely to the right holder has no legal validity. By rejecting such bad-faith evidence collection methods, the court guided right holders to protect their rights through legal and proper procedures, which is conducive to maintaining a fair order in the field of intellectual property protection.

(III) Key Distinctions Between Entrapment Evidence Collection Acts

Combined with Article 7 of the Provisions on Intellectual Property Evidence and the adjudication logic of the above cases, opportunity-providing entrapment and intent-inducing entrapment can be strictly distinguished from three aspects:

First, regarding the time when the alleged infringer’s subjective malice arises. In opportunity-providing entrapment, the alleged infringer’s intent to infringe arises independently before the right holder collects evidence. For example, the infringer sells infringing products for a long time, and the right holder’s purchase is only to fix infringing evidence. In intent-inducing entrapment, the alleged infringer’s intent to infringe is usually induced by the evidence collector’s prior acts such as inducement and deception.

Second, regarding causality. In opportunity-providing entrapment, there is no inevitable causal relationship between the infringing act and the evidence collection act — the infringement would inevitably occur regardless of whether the right holder collects evidence to protect legitimate rights and interests. In intent-inducing entrapment, the alleged infringer’s infringement has an inevitable causal relationship with the right holder’s inducement and deception; without such acts, the infringement would not have occurred.

Third, regarding the continuity of infringing acts. In opportunity-providing entrapment, the infringing evidence obtained is not accidental, and the alleged infringer’s infringement is repeated and continuous. In intent-inducing entrapment, the infringement is accidental and targeted. For instance, in the Huang Huangjun case, Guimou Household Goods Factory purchased and sold the infringing product only once at the request of the evidence collector.

To sum up, China’s judicial practice strictly distinguishes between opportunity-providing entrapment and intent-inducing entrapment. The former fixes existing infringing facts and is legal and valid; the latter induces new infringements, violates the principle of good faith, and its evidence shall not be admitted.

IV. Compliance Guidelines for Evidence Collection in Intellectual Property Rights Protection

Faced with the concealed and fragmented trend of infringement in intellectual property cases, entrapment evidence collection is prone to cross red lines. For intellectual property lawyers, conducting legal and compliant evidence collection is the only way to obtain key evidence, achieve effective rights protection and reduce their own risks.

First, before evidence collection, evaluate the possibility of conventional evidence collection and whether the target infringer has obvious signs of continuous infringement. Try to collect preliminary infringing evidence of the infringer (e.g., online sales records and sampling inspection records of infringing products).

Second, if entrapment evidence collection is unavoidable, strictly adopt the opportunity-providing method. The purpose of evidence collection shall be limited to discovering and fixing existing infringing facts, rather than creating new facts. When purchasing infringing products, act as an ordinary consumer and make ordinary transaction requests, and shall not induce the infringer with excess profits or special customization requirements.

Meanwhile, communicate with notaries in advance to fix evidence of the purchase process, and fully record the entire process of transaction negotiation, order placement, payment and goods receipt. Notarized documents greatly enhance the probative force of evidence. In addition, except for proving the continuous state of infringement, avoid repeated purchases of the same infringing product.

Finally, evidence obtained through opportunity-providing entrapment shall be corroborated with other evidence (e.g., publicity on the infringer’s official WeChat official account and website, prior administrative penalty decisions, and product sampling inspection records disclosed by market supervision administrations) to form a complete evidence chain.

V. Conclusion

At present, China’s judicial practice adopts an attitude of limited recognition and strict regulation toward entrapment evidence collection. Taking the distinction between “providing opportunity” and “inducing intent” as the key, courts comprehensively examine the authenticity, relevance and legality of evidence to determine the validity of infringing evidence in intellectual property cases.

It should be noted that with the surge in intellectual property infringement cases in recent years, courts will inevitably scrutinize the legality of rights protection evidence in such cases more meticulously in terms of review trends, including whether conventional evidence collection was adopted; if entrapment evidence collection was used, which type specified in the Provisions on Intellectual Property Evidence it falls under; and whether it involves inducement.

As intellectual property lawyers, we should deeply understand the boundaries between different types of entrapment evidence collection, make full preparations before evidence collection, and maintain sufficient prudence and attention during evidence collection to ensure the legality and compliance of evidence collection acts. Only in this way can we efficiently and legally obtain evidence, reduce the risk of evidence being excluded, and fully protect the legitimate rights and interests of clients.

References

[1] Article 8 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Disputes over Copyright (2002): Physical evidence, invoices and other materials obtained by a party by ordering or purchasing infringing reproductions through on-site transactions, either by itself or by entrusting others, may be taken as evidence. A notarial certificate issued by a notary public truthfully certifying the evidence obtained by the other party in the manner prescribed in the preceding paragraph and the evidence collection process without disclosing identity to the party suspected of infringement shall be admitted as evidence, unless there is evidence to the contrary.

Note: This judicial interpretation was revised in 2020, with no amendment to Article 8.

[2] Paragraph 1 of Article 7 of the Several Provisions of the Supreme People’s Court on Evidence in Intellectual Property Civil Litigation: Physical evidence, receipts and other materials obtained by a right holder, for the purpose of discovering or proving an intellectual property infringement, by purchasing infringing goods from the alleged infringer in the name of an ordinary buyer by itself or by entrusting others, may be taken as evidence to sue the alleged infringer for infringement.

[3] Paragraph 2 of Article 7 of the Several Provisions of the Supreme People’s Court on Evidence in Intellectual Property Civil Litigation: Evidence formed by an alleged infringer who committed an intellectual property infringement based on another person’s act may be taken as evidence for a right holder to sue the alleged infringer for infringement, except where the alleged infringer committed the intellectual property infringement solely based on the right holder’s evidence collection act.

[4] Civil Judgment of the Supreme People’s Court (2006) Min San Ti Zi No. 1.