On 24 November 2020, IndieGoGo, a leading U.S. online crowdfunding website operator, won both the first and second instances of a patent infringement case brought by Sino Lithium (Suzhou) Electric Technology Co., Ltd. ("Sino Lithium"). The Higher People's Court of Jiangsu Province (the "Higher Court") rejected all the claims made by Sino Lithium against IndieGoGo in the appeal, holding that IndieGoGo neither knew nor ought to have known the alleged sale or offer for sale of the infringing product by the fundraiser on its website, and that there was no evidence that IndieGoGo had aided or abetted the alleged infringement. The final decision has now taken effect. This is a typical case involving the potential infringement of Chinese intellectual property rights by overseas e-commerce websites selling products to the Chinese public.
Founded in 2008 and headquartered in San Francisco, IndieGoGo is one of the first crowdfunding platforms in the U.S.
In 2017, Sino Lithium filed a lawsuit with Suzhou Intermediate People's Court (the "Intermediate Court") against IndieGoGo, alleging that IndieGoGo and a fundraiser who posted an e-bike crowdfunding project on its website had jointly infringed on its patent rights, and requested the court to order IndieGoGo to cease infringement and pay high damages of RMB 2 million.
In the first instance, the Intermediate Court decided on 19 June 2019 to reject all the claims of the plaintiff after examining the operation mode of IndieGoGo's website, the measures it had taken in response to the objections raised by Sino Lithium, and the evidence produced by the plaintiff. In the appeal filed by the unsatisfied plaintiff, the Higher Court upheld the first-instance judgment, finding that the allegedly infringing project was initiated by the fundraiser alone, and that the fundraiser should be the sole infringer without any other proven infringers or contributors to the infringement even if IndieGoGo had sold or offered to sell a product infringing Sino Lithium's certain patent.
The findings made by the Intermediate Court and the Higher Court on the role of crowdfunding in patent infringement matters respectively in the first and second instances will provide an important guide and reference for similar cases. The case further clarifies the liabilities of an overseas e-commerce platform may bear in China, and serves as a critical precedent for determining the duty of reasonable care of an overseas e-commerce platform, and whether such platform has aided or abetted the infringement acts committed by its users.
King & Wood Mallesons represented IndieGoGo in the case. By developing and implementing a professional and thorough defense strategy, we secured a complete victory for the client in both the first and second instance, receiving high praise and recognition from the client.
This case was led by partner He Fang, and supported by Zhang Siwei.
