2. Cause of Action
    The plaintiff Goodbaby alleged that it had obtained the “Baby Carrier Wheel (3)” design patent on Sept. 29, 1998 with the patent number 97313709.6. The investigation revealed that the wheel of the “2009” baby carrier produced by the second and the third defendants was identical to the plaintiff’s patent. In accordance with the Patent Law, after the grant of the patent right for a design, no entity or individual is entitled to, without authorization of the patentee, make, sell or import the product incorporating the patented design for production or business purposes. The three defendants’ making and selling the “2009” baby carrier wheels while using the plaintiff’s patent without authorization should be regarded as constituting patent infringement. Consequently, the defendants should bear joint and several liability.
    Claims: The plaintiff requested that the court order the defendants to stop their manufacture and selling of the allegedly infringing baby carrier; to destroy all the infringing products, the semi-manufactured products and the molds in stock; to compensate the plaintiff in the amount of 100,000 yuan for economic loss; to apologize publicly; and to assume all of the incurred litigation fees in this case.

    During the hearing, the plaintiff further requested that the court order the first defendant to stop selling the infringing products; that the second and the third defendants apologize publicly in Xinmin Evening News; and that the second and the third defendants bear joint and several liability for the relevant compensation.
    The defendant Fine Works Edifice failed to submit any written defense.
    Defendants Daafu and Fuxiang argued jointly that the plaintiff’s allegations were inconsistent with the facts. They argued that the plaintiff must produce the evidence to prove that the “2009” wheels were manufactured by the defendants. In order to cooperate with the court, the defendants sought to present only relevant written evidence to the court to prove that a third party manufactured and sold this product.

    3. Facts Ascertained During the First Instance Trial
    The plaintiff Goodbaby applied for the “baby carrier wheel (3)” design patent to China Patent Office on Oct. 6, 1997 and obtained the design patent on Aug. 29, 1998.The patent number was 97313709.6 and the grant of this design patent was given in a public notification on Oct. 28, 1998. Currently this patent is still valid. 
    On Nov. 13, 2001, one of the plaintiff’s employees bought at Fine Works one “Daafu Baby Carrier (2009)” which was made by Daafu and Fuxiang.
    On Feb. 16 2001, the plaintiff’s employee applied to the Kunshang Notary Office for a notary on the bought “Daafu Baby Carrier (2009)” produced by Daafu and Fuxiang in Changzhou’s International Commercial Mansion. 
    On Dec. 4, 2000, the plaintiff brought a lawsuit against the three defendants, claiming that they had infringed its patent right.
    The comparison between the wheel of the “Daafu Baby Carrier (2009)” made by Daafu and Fuxiang and sold by the defendants Fine Works and Changzhou International Commercial Mansion using the plaintiff’s design patent (hereinafter referred to as “this patent”), with the allegedly infringing product of the defendants－ the “Daafu Baby Carrier” wheel (hereinafter referred to as the “allegedly infringing product”) showed one difference between them.
    As for the design as a whole, pursuant to the principle of complete observation and comprehensive judgment, if such a difference is minor and has no obvious visual difference and changes in the shape of the entire product, the aforesaid minor difference will not influence the judgment concerning the similarities between them. Therefore, the two designs are deemed as similar ones.
    4. Reasoning and Decision of the First Instance Court
   After hearing the case, the court held that the plaintiff Goodbaby’s design patent was legal and valid, and hence the patent should be under legal protection.

    The protection scope of design patent should be based on the picture shown in the patent gazette or be based on the product using the patented design contained in those pictures. The wheel of ‘Daafu Baby Carrier’ that was produced by the defendants Daafu and Fuxiang was similar to the plaintiff’s design patent. As the producer of the baby carrier, Daafu and Fuxiang should bear all the relevant liabilities related to the baby carrier that they manufactured, which contained infringing products. If such products are made for business purposes without authorization and embody another’s design patent as a whole, they should be regarded as constituting a type of infringement regardless of the source of the product. The patentee has the right to prevent this kind of patent infringement. The defendants’ argument that they bought the patent infringing product from a third party was not upheld because there was inadequate proof. Even if the defendants bought the product from a third party, after buying the patent-infringing product without the manufacturer’s name and address, brand name or any other identifying marks, they did not sell the product directly but used the product as a component part of their manufactured baby carrier. By marketing the baby carrier with the infringing product as a component part and by selling such carriers with their factory names and trademarks, the commercial value is what the defendants publicly announced and promised as the producer of the baby carrier. Such an act should be regarded as “manufacturing” for business purposes instead of merely “using” the design patent. As a result, the argument made by the defendants is not upheld. The wheel of ‘Daafu Baby Carrier’, which was produced by the defendants Daafu and Fuxiang, was similar to the plaintiff’s design patent, and this constituted joint patent infringement upon the plaintiff’s design patent. Therefore, the defendants Daafu and Fuxiang should bear corresponding civil liabilities. However, as for the sale of the Daafu Baby Carrier by the defendant Fine Works, because there was inadequate evidence to prove that it sold the infringing product knowingly, Fine Works should stop selling the infringing product. In sum, the plaintiff’s claims should be supported. The compensation for the plaintiff should be determined in light of the manufacturing time, the range of sales of the defendants Daafu and Fuxiang and the value reflected in the design.
    In accordance with Article 118, Article 134.1, 7, 10 of the General Principles of Civil Law and Article 11.2 and Article 59.2 of the Patent Law, the court rendered the following judgment:
    First, the defendants Daafu and Xiangfu shall immediately cease their infringement upon the plaintiff’s design patent (No. 97313709.6) and destroy all of the infringing products in their stock. The defendant Fine Works shall stop selling the infringing products. 
    Second, the defendants Daafu and Xiangfu shall compensate the plaintiff 100,000 yuan for its economic loss within 7 days after the judgment becomes effective. The two defendants shall be subject to joint and several liabilities.
    Third, the defendants Daafu and Xiangfu shall apologize to the plaintiff Goodbaby in Xinmin Evening News within 30 days after the judgment comes into force (the content shall be examined and approved by the court). Should there be any delay by the defendants, the court will publicize the main contents of the judgment and the defendants Daafu and Xiangfu shall bear the corresponding costs.
    After the judgment, the defendants filed an appeal on the grounds that their actions only constituted “use”. After the hearing, the second instance court held that their grounds for appeal could not be established, and hence dismissed their appeal and affirmed the trial court judgment. 
 [Main Legal Issues Involved in This Case]
    1.  Analysis concerning ‘Use’ of the Design Patent
    Although the aforesaid case was concluded, the issue about ‘use’ still exists. The subject of design patents involves aesthetics and it protects a type of patented product. At the same time, design not only refers to the design of the whole product, but also refers to the design of certain parts of the product. Thus, the design patent has unique specific characteristics. In China, the design patent is treated differently from the invention patent and the utility model patent. According to the Patent Law, the patentee of a design patent is entitled to preventing others form utilizing his design patent without his authorization, including to make, sell and import any products with his design patent for business purposes. The difference from the patented right for an invention or a utility model is the exclusion of the “use” of the product incorporating the patented design. The Patent Law amended in 2000 also excludes offerings for sale. Therefore, the use of a design patent will not constitute patent infringement under all circumstances. In other words, the design patent right only covers the right of ‘making’, ‘selling’ and ‘importing ’,excluding the right of ‘using’. Why isn’t this right included? Relevant theoretical explanations are as follows: Firstly, as long as the third person’s act of ‘making or selling’ without permission is prohibited, the purpose of protecting the design patent may be achieved; Secondly, it seems that in practice there is no such circumstance where the design patent is used for business purposes by a third party . It appears that this view has been accepted by the public and recognized by the relevant competent authorities. “The main purpose of granting a design patent is to prevent others from copying the protected design patent in making related products without authorization. For this purpose, it is enough to prevent others from making or selling the patented design without permission. It is unnecessary to prevent others from using the patented design for business purposes” . From the aforesaid, we can see why there is no ‘right of use ’ under the protection of design patents. Since the design patent does not cover the “right of use”, in judicial practice, when the plaintiff alleges that the defendant has infringed his design patent, the defendant always argues that he bought the product from other manufacturers, and thus he is only a user rather than a producer.

    There are many other situations and contexts which involve the legal issues contained in the aforesaid case in judicial practice. This kind of act also involves the use of the design patent for business purposes by a third party.
    In order to clarify what constitutes a design patent, it is necessary to distinguish between ‘the use of a design patent’ and ‘the use of a product incorporating the patented design’. As a legal term, there is a definite interpretation for ‘use’ in traditional civil law. While illustrating the title in civil law, Wang Zejian, a famous Taiwan scholar, points out that it involves the “use” of something. “Use” means to meet one’s personal needs based on the usage of an object or thing without damaging it or changing its features, such as living in a house, cultivating farmland, taking a ride on a vehicle or a horse, wearing clothes, playing a musical instrument, etc . Thus, we can see here that “use” means the utilization of certain functions of a thing, or that the thing itself has a certain value of “use”; that is to say, the thing has certain attributes which may meet the needs of certain people (i.e. the serviceability of the thing).
   
    As the design protected via a patent refers to a new kind of aesthetic design of a product, it incorporates a certain shape, picture, color and so on, and is able to be applied in industry. The design has to be used in a specific product; otherwise it is only a kind of artistic design involving a piece of art or model. The purpose of utilizing a design is to apply the relevant novel design to production and to make products incorporating the new design, which reflects the aesthetics of the new design. What is stressed here is that the design is the real purpose, that is to say, what is used here should be the design of the article’s appearance or that of a decorative picture. The main purpose of this kind of design is not its practical application. It must be decorative in nature, not requiring a design patent to protect the products practical application, but requiring it to protect the design incorporated in those products . The design patent protects the design from being copied, which is quite similar to copyright protection. We can even say that what the design patent protects is certain ‘works’  , which is also a kind of intellectual achievement manifested by the means of certain physical matter. The Intellectual Property Course edited by the World Intellectual Property Organization (WIPO) points out that: “The design of industrial products belongs to aesthetics. Meanwhile, it is also a sample product of the industry or a handicraft industry product. Generally speaking, the design of the industrial products is the decorative or aesthetic appearance of the products with practical applications.” These words illustrate exactly the legislative purpose and the protected object of the design patent law, i.e., the purpose of the design protection system is to protect the beautiful appearance of the industrial products and to prevent acts of copying or imitating the appearance of the patentee’s product without authorization.        
   
     To use a design product means to use the product directly to meet one’s needs, i.e. to practically use the product. For instance, with the use of a desk clock in the shape of an owl, the patent for such a design constitutes the design patent. The users mainly use the clock for its timing function and the decorative function constitutes its novel design. The product’s internal structure, material, productive techniques, brand name and other features incorporating such design are not included in the design protection. Generally speaking, it refers to the use of the product by the end consumers. 

     From the aforesaid differences, we can clearly distinguish the three crtiteria. In sum, we can easily reach the following conclusion: “Use” means the use of the product in light of its functions. It must: a) be used according to its natural features; b) not change or damage the thing’s essence; c) obey the law and public morality and not harm the public interests and the legal rights and interests of others. This is for tangible objects. Only the use of the design can embody its intangibility and this is related to the subject of design patent protection. Like other intellectual achievements, the product incorporating the patented design involves information. Although it has to be attached to certain tangible material, it is still a kind of intangible intellectual achievement. Thus it should not be included as one of the objects of ownership. If a similar or identical design is used in products, it should be deemed to fall into the protection scope of design patent rights, and consequently constitute an infringement upon the design patent.                     
     2.  The Causes of Problems and Countermeasures
     In the design patent infringement case, if the wheel of the baby carrier is the product incorporating the patented design and is assembled in the baby carrier, should the producer of the baby carrier be liable for the infringement? There are different interpretations occurring in judicial practice. There are four kinds of viewpoints. The first viewpoint is that the producer of the finished products should not be liable for infringement. According to this view, the baby carrier is legally bought from others, so the producer is only a user and the patentee of the design patent does not enjoy protection involving the ‘right of use ’. Therefore, it doesn’t constitute patent infringement. The second view is that the producer of the baby carrier and the producer of the baby carrier wheel should jointly be held liable for patent infringement. The producer of the finished product should be held liable to stop the infringement and the producer of the baby carrier wheel should be found liable for compensating the design patent owner. The third viewpoint holds that if it can be proven that the producer of the finished product has known or should have known that the component parts are patented, but still assembles those parts in its own product and then sells it, the producer should be regarded as the seller of those component parts, and be held liable for patent infringement. The fourth viewpoint holds that no matter whether the producer of the finished product gets the component parts by itself or from others legally, as long as the finished product embodies another’s product incorporating the patented design, they should all be held liable for patent infringement.   
     In the author’s opinion, the above cases mainly result from the following two reasons: one is the different understanding about the users; the other is the different understanding about the producers. In order to properly solve such problems, it is necessary to establish a standard as to whether the products (the component parts) are launched into the market legally. As the design patentee, one enjoys the right to prevent others from exploiting a design patent without authorization. Under this premise, other issues may be readily solved. As a kind of intellectual property, the essential nature of the design patent is its non-material feature. Compared with personal or real property, there are different means for intellectual achievement to exist, to be used and to be disposed of. There is no possession by means of tangible control; there is no use with tangible wearing and tearing; there is no factual disposal by destroying the intellectual achievement; and especially, there is no legal disposal by tangible delivery. Therefore, it is possible for non-patentees to dispose of the intellectual achievement of others by illegal means .   
     If the patentee produces or permits others to produce the product and then launches the product into market, the patentee has diminished his patent rights. Similar or different producers may get the product legally into the market and use it in their own products, which does not constitute patent infringement. But if the product is put into the market illegally, the patentee is entitled to asking the producer of the finished product or its component parts to be held legally liable regardless of their source. The main difference between design and tangible goods is that the owner cannot fundamentally protect the design from infringement by possessing it. Perhaps it can be argued that exemption should apply to any legal purchase in the market. But the so-called “legality” of the purchase is really a kind of illegal infringement with a legal appearance. In fact, they confuse the relationship between ‘rights’ and ‘objects’. If we take the patented product as the object of a patent right, the object of the right in rem and the patent right will be confused. In fact, the object of design patent protection is the design solution applied to products instead of the product itself. The product is just the carrier of the design solution. As is pointed by some scholars that in law when we say something belongs to somebody, we mean in essence there is a relationship between the owner and the others, i.e., a relationship about “exclusive ownership”. It is the relationship among human beings that the law regulates rather than the one between human beings and objects.vii
 
     Therefore, does a problem exist concerning ‘bona fide third party purchasers’? As a “user”, the manufacturing factory and ordinary consumer are different. In other words, we can say that there is a difference between manufacturing users and ordinary consumers as end users. The judgment concerning the infringement of design patents should be made from an ordinary consumers’ point of view. Here it is necessary to see what is the purpose of the use, i.e., to distinguish the use of design or the practical use or function of the product incorporating the design. Therefore, to apply a higher standard of duty of care to similar or relevant manufacturers may help to smoothly solve such problems. As for a patent right legally granted, it is presumed that it has been given public notification. Thus it is possible for similar manufacturing enterprises to know the manufacturing situation in the same or relevant industries, including the situation involving patents. Meanwhile, the contractual relationship between the manufacturer and the infringing party should not be considered a valid defense against the infringement action brought by the patentee. A contractual relationship is based on legal relationships regulated by the property law, and the purchaser is not entitled to enjoy patented rights automatically by purchasing infringing products from the infringing party. In addition, the contractual relationship may cover two possibilities: one is that the manufacturer of the finished products provides drawings or samples of component parts to entrust processing; the other is to purchase parts directly from the manufacturer. Generally, one finds the open sale of finished products incorporating the patented product, while it is more difficult to find the manufacturing of the component parts. In this case, if the patentee cannot prevent such acts, it will certainly be adverse to the patentee’s rights. Meanwhile, it is difficult for the patentee to determine cases of infringement and investigate whether civil liabilities exist. Each enterprise has the capability to check in advance whether the component parts it purchases are infringing products made without the authorization of the patentee. The failure to so will constitute negligence on its part. Therefore, even though the enterprise purchases the component parts, it will possibly be negligent in exercising its duty of care if it purchases patent-infringing parts. Of course this is only a presumption. But there is a certain legal basis to make such a presumption in this case and it will be beneficial to the full protection of the patentee’ rights. After discovering the infringing activity, the patentee will be entitled to claiming damages against the infringing party, the manufacturer of the component parts, by seeking to hold them liable for contractual breach. Surely, the manufacturer’s duty of care should be different from the seller’s. The duty of care of the seller of finished products should be less stringent than that of the manufacturing enterprise. Therefore, the issue of a “bona fide third party purchaser” does not exist in such a case involving the use in manufacturing.             
    When a “special” design product is used as a part of another product, sometimes the novelty of a certain part of the product may increase the appeal of the whole product  due to the creativity and contribution of the design patentee. As a design patent does not protect the function of the product, sometimes the parts of the product, such as for the baby carrier are critical for its design. Though the whole mould may be innovated, it is quite difficult to do so, while the changes in the different parts may show continuous innovation. Then a maker may use the parts in his own products. In comparison with the similar situation involving copyrights, will such use be considered as  reasonable use”? Actually, in this circumstance “use” is actually “utilization”. Such utilization means the manufacture of design products. There is no doubt that an intangible property right involves a kind of “right of utilization or monopoly” but not a right over things . Using another’s’ design patent in manufacturing and selling it as one’s own product is obviously for the business purpose of making profits. This will certainly damage the patentee’s market or economic interests. Perhaps the person “utilizing” another’s patent design will defend himself by claiming “lack of knowledge”, but he cannot deny that such an act is of commercial nature and may bring adverse influence to the patentee’s market or to his economic interests. Therefore, such “utilization” is not a “reasonable utilization” but involves manufacturing activity. Therefore, on the basis of the valuation criteria of fairness and efficiency, such acts may be defined as follows: one is to define the value according to the purpose and nature of the use, i.e. whether use of the product incorporating the patented design is for business or non-business purposes, and whether or not it is for obtaining profits. This point is of critical importance in determining the boundary between “use” and “manufacturing”. As for utilization for scientific research and experimentation without direct commercial and personal (family) use, since such use is to meet social public interests or personal needs, and will not damage the legal rights and interests of the patentee, such use should be considered legal. Conversely, commercial use for profit may violate the principal of fairness by damaging the legal interests of the patentee and dampen the patentee’s enthusiasm for creativity, and thus is a type of illegal use. Secondly, this type of use may negatively influence the patentee’s market or his economic interests because in practice, it is usually the manufacturing enterprises that apply for patent protection for the parts of the products and uses them in their own sales, and the competitors of similar or related products may take advantage of another’s patented products for illegal interests. Surely in practice, the above two factors should be considered together for making a sound judgment. Meanwhile, the structuring of design patent protection should treat this as a standard, and review the relevant legal provisions.                  

    3. Advice for Legislation
    As with the protection on design patents, patents for inventions and utility models are not treated equally, with there being different understandings and different dispositions in judicial practice, which has effected the uniformity of laws. Therefore, the protection for design patent should include ‘use’. There are many successful examples in other countries. For instance, the design laws in the four countries of northern Europe (Denmark, Norway, Finland and Sweden) prescribe that: “The designing patent right belongs to the designer, i.e. the patentee. Any other person shall not enjoy the patent right and shall not use, make and sell the patented product or any other items having no material difference without the patentee’s authorization.”   The Austrian Design Patent Law states more clearly in its Article 4: “If another’s products and the design patentee’s design are the same or may cause confusion and the products listed in the catalogue may obviously put the design in others’ products, then the design patentee is entitled to preventing others from making, circulating, selling or using those products.”  
    China may make reference to the relevant provisions regarding design patents in foreign countries and add the right of “use”. Article 38 of Japan’s newly amended Design Law (which came into effect as of Jan. 6, 2001) regarding infringement upon right as an infringing act provides that: “As a kind of operation activity, any act to make, transfer, lend, import or to provide for any transferring, lending and using any items which are used in producing something involving the registered design or  similar design shall be regarded as a kind of infringement upon the design patent or its legal monopoly exploiting right.”  Therefore, the so-called “use” discussed in this article should be prohibited as a kind of “making”. Only by this means can it be certain that the design patent will obtain sufficient and more effective protection.