"Legal source defense" is one of the frequently used defense arguments in intellectual property infringement disputes. Intellectual property rights belong to the intangible assets of the right holders. Only by protecting intellectual property rights can we protect the innovation enthusiasm of the right holders and ultimately promote social innovation and development. However, if each transaction requires the transaction party to strictly examine the trademark, design patent and other related intellectual property rights, it will greatly increase the transaction cost, affect the efficiency of the transaction, and deviate from the legislative purpose of promoting the transaction. Under the premise of protecting the intellectual property rights of the right holders, in order to balance the relationship between the intellectual property rights holders and bona fide third parties, the legal source defense system came into being. The design of the legal source defense system gives special consideration to the civil legal acts made by bona fide third parties in the product trading and circulation link. However, in order to protect the legitimate rights and interests of the intellectual property owner, the bona fide third party advocating the legal source defense must perform the disclosure of the transaction counterpart and bear the corresponding burden of proof, so that the intellectual property right holder can find the source of the infringing product and investigate the legal responsibility of the manufacturer of the infringing product, so as to fundamentally stop the infringement. Therefore, the legal source defense system aims to strike a balance between the interests of intellectual property rights and bona fide sellers, protect the rights and interests of right holders, and at the same time ensure the security of normal business transactions and maintain the stability of social and economic order.

What is the legal source defense? China's Trademark Law, Patent Law and Copyright Law have corresponding provisions; Although there is no explicit provision in the Anti-Unfair Competition Law, it is also applicable in judicial practice, such as the case of unfair competition dispute between Donge Ejiao Co., Ltd. and Shandong Dongrun Ejiao Group Co., Ltd. and Shanghai Leyun Shangbei District Retail Co., LTD., case No. (2018) Zhejiang 0110 Minchu 9226. Article 64 (2) of the Trademark Law stipulates: "Whoever sells a commodity without knowing that it infringes on the exclusive right to use a registered trademark and can prove that the commodity has been legally acquired by himself and the supplier shall not be liable for compensation." Article 70 of the Patent Law states: "Any person who uses, promises to sell or sells a patent infringing product for the purpose of production or business without knowing that it is manufactured and sold without the permission of the patentee shall not be liable for compensation if he can prove that the product is of lawful origin." Article 53 of the Copyright Law states: "Where the publisher or producer of the reproduction fails to prove that the publication or production is legally authorized, or the distributor of the reproduction or the renter of a cinematographic work or a work created by a similar method of cinematographic production, computer software, sound recording or video recording fails to prove that the reproduction of the distribution or rental has a lawful source, it shall bear legal responsibility." Although the three separate laws of intellectual property rights have different provisions on the defense of legal source, they all have corresponding provisions. It should be noted that the legal source defense does not apply to all infringements. For example, in trademark infringement litigation, only sales can apply the legal source defense; In a patent infringement action, use only, offer to sell and sale acts may apply.

What does the legitimate source defense apply to? The establishment requirement of legal source defense depends on whether the objective requirement that the accused infringing product has legal source and the subjective requirement that the defendant has no subjective fault can be satisfied at the same time. Specifically, the above objective elements of legitimate source refer to the defendant's ability to obtain the products sold through normal commercial means such as legal purchase channels, normal sales contracts, reasonable prices, and provide direct suppliers. As to the objective elements, the defendant bears the burden of proof. Article 4, paragraph 1, of the Provisions of the Supreme People's Court on Evidence for Intellectual Property Civil Litigation stipulates that where the defendant claims legal source defense according to law, he shall provide evidence to prove the fact that the accused infringing product or copy was legally obtained, including legal purchase channels, reasonable prices and direct suppliers. Among them, as for the identity of the supplier of the accused infringing product, it is generally believed that if the source is a natural person, the defendant should submit clear personal information of the subject; If the supplier is a legal person or other organization, the defendant shall submit the business registration information of the subject. Only in this way, the right holder can find the source of the infringing product, investigate the legal responsibility of the infringing product provider, and then fundamentally stop the infringing act; Otherwise, it is unfair to intellectual property rights holders. If the defendant does not know the specific identity of the supplier of the infringing product, it should not be found that the legal source defense is established. The objector's subjective no-fault requirement means that the defendant should prove that he did not know and should not have known that the product he sold was infringing. The defendant bears the burden of proof on this subjective element. In judicial practice, if the defendant can prove that he has fulfilled the corresponding duty of care, obtained the products in accordance with legal and normal market trading rules, the source of the products sold is clear, the channels are legal, the price is reasonable, and the sales behavior is in line with the principle of good faith and the trading practice, it can be presumed that the seller actually does not know and should not know that the products he sells are infringing products. That is, the seller is presumed to have no subjective fault. Article 4 (2) of the Provisions of the Supreme People's Court on Evidence for Intellectual Property Civil Proceedings stipulates that if the source evidence of the accused product or copy is equivalent to its duty of reasonable care, the defendant may be deemed to have completed the proof mentioned in the preceding paragraph, and it is presumed that he did not know that the accused product or copy infringed intellectual property rights; The defendant's business scale, professional degree, market trading habits, etc., can be used as evidence to determine his duty of reasonable care. In this case, the right holder should provide evidence to the contrary. If the right holder provides further evidence sufficient to overturn the above presumption, the defendant's legal source defense is not established and should bear the liability for compensation. If the right holder does not provide further evidence to the contrary to overturn the above presumption, the defendant shall be found to have a legitimate source defense.

If the legal source defense is established, should the supplier of the accused infringing product be added as the defendant or the third party? At present, there is no conclusion on this issue in judicial practice. Some people believe that, considering the efficiency of litigation, when the right holder does not apply or does not agree to add the supplier of the accused infringing product as the defendant, the court should not take the initiative to add, otherwise it will affect the efficiency of the trial of the case, so that the normal trial of the case can not be guaranteed. There are also views that if the supplier of the accused infringing product is not added as the defendant, the right holder needs to Sue separately, which will lead to litigation and cause a huge waste of judicial resources. Therefore, when the legal source defense is established, the court should add the supplier of the accused infringing product as the defendant. The author believes that this problem is the value balance between the pursuit of judicial efficiency and judicial justice, which should be dealt with differently according to specific circumstances in judicial practice. Under the premise that the defendant has provided solid evidence of the legal source and the supplier of the infringing product, if the right holder applies for or agrees to add the supplier of the accused infringing product as the defendant, the court shall add the supplier of the accused infringing product as the defendant to participate in the lawsuit; If the right holder does not apply or does not agree to add the supplier of the accused infringing product as the defendant, the court may add the supplier of the accused infringing product to participate in the lawsuit according to its authority. Of course, according to the provisions of Article 232 of the Supreme People's Court's Interpretation on the Application of the Civil Procedure Law of the People's Republic of China, the infringer's application for the addition of a third party outside the case should be filed at the latest before the end of the case's first-instance court debate.

What are the legal consequences of the legitimate source defense? Legal source defense is the defense reason for the defendant to exempt from compensation loss, but not the defense reason for the defendant to exempt from tort liability. The legal source defense is established to exempt the perpetrator from the liability for compensation, not the tort liability. Under the premise that the legal source defense is established, the defendant does not bear the liability for damages, but still bears the tort liability, and still bears the legal adverse consequences such as stopping the infringement. Should the right holder's claim for reasonable expenses be supported when the legal source defense is established? The law is not clear. In judicial practice, it is generally believed that the establishment of the legal source defense does not change the tort nature of the act, and the reasonable expenditure of the right protection is based on the tort, and the legal source defense exempts the perpetrator from the liability of compensation rather than the tort liability, so the reasonable expenditure of the right to obtain the relief of stopping the infringement should still be supported. On the other hand, in the case that the legal source defense is established, the reasonable cost borne by the anti-defendant is conducive to warning market traders that they should fulfill certain review obligations when carrying out market transactions, avoid condoning the occurrence of infringement, and better protect the rights and interests of intellectual property rights holders while taking into account the interests of bona fide sellers. Therefore, the legal source defense does not exempt the liability for reasonable costs.