Choosing electronic evidence to achieve maximum litigation benefits

31 August 2023

Choosing electronic evidence to achieve maximum litigation benefits

About a decade ago, when foreign rights holders wanted to take action against IP infringement in China, the burden of gathering evidence was so heavy that the rights holders often decided to drop the case because of cost reasons. This is no longer the case, as China has taken substantial steps to improve the environment for IP rights holders to better enforce their rights.

Acceptance of electronic evidence

The increasing acceptance of electronic evidence by the Chinese judiciary and law enforcement authorities has allowed foreign IP rights holders to fix infringement evidence at a much lower cost.

Under the Civil Procedure Law of the PRC, what type of evidence is admissible to a legal proceeding is expressly enumerated. Before 2012, there were only seven types of evidence that could be admitted, namely (1) documentary evidence; (2) physical evidence; (3) audio-visual materials; (4) witness testimony; (5) statements of the parties; (6) appraisal conclusions; and (7) record of investigation. At that time, it was a common problem, and there was an unresolved debate among judges as to whether the evidence in electronic form was admissible, and if yes, what type of evidence it fit in. As such, many courts in China were reluctant to accept screenshots or video clips showing IP infringement on the grounds of admissibility issues, causing IP rights owners both abroad and at home to have to opt for notarization of the same to have the evidence admitted.

However, the process of notarization was both time-consuming and expensive. This was further compounded by the fact that huge demand for notarization from rights holders across the globe to fix evidence of IP infringement had effectively made the notarization a seller’s market. Which made it more difficult or expensive for the rights holders to fix evidence.

Things had started to improve with the amendment to the Civil Procedure Law of the PRC in 2012. In that amendment, the Chinese legislature added another type of evidence admissible to the legal proceedings, i.e., electronic[AL1]  data (电子数据), officially opening the door for the rapid development of applying electronic technologies in legal proceedings and especially in IP infringement litigations in the following decade.

In 2015, the Supreme People’s Court of the PRC (SPC) defined electronic data in their judicial interpretation of the PRC Civil Procedural Law as “information formed or stored in an electronic medium through email, electronic data exchange, online chat records, blogs, microblogs, cell-phone text messages, electronic signatures, or domain name, etc.” and said that this definition applied to audio and visual materials stored in electronic media.

In 2020, the SPC further stipulated in their Several Provisions on Evidence of Civil Procedures that the following information or electronic files should be considered as electronic data: (1) information published on webpages, blogs, microblogs, and other online platforms; (2) communication information of network application services such as text messages, emails, instant messaging, group chat, etc.; (3) user registration information, identity authentication information, electronic transaction records; communication records; log-in logs and other information; (4) documents, images, audio, video, digital certificates, computer programs, and other electronic files; (5) other information stored, processed, and transmitted in digital form that can prove the facts of the case.

At this point, the attitude of the Chinese judiciary towards electronic evidence has become effective all-inclusive. Any information stored, processed, and transmitted in digital form is admissible.

Application of blockchain in fixing electronic evidence

Then it comes to the questions of how to determine the authenticity of the electronic evidence.

The Chinese Civil Procedure Law requires the parties to submit the original of their evidence to determine its authenticity. In SPC’s Several Provisions on Evidence of Civil Procedures (2020), it was stipulated that the following are sufficient to satisfy the “original copy” requirement for electronic data: (1) a copy made by the producer of the electronic data that is consistent with the original; (2) a printout; or (3) any other output medium directly derived from the electronic data that can be displayed or identified.

However, electronic data is inherently susceptible to alteration and manipulation, which is one of the reasons that the judges were stringent on admitting electronic evidence in the first place. A single printout and any copy made by the party alone will not automatically get the evidence admitted by the court. Moreover, the opposing party will most likely object to admitting that copy of electronic data on the grounds of unclear authenticity.

Previously, the Chinese courts had relied on notarization to solve the data authentication problem, as the Civil Procedure Law of the PRC provides that the notarized documents shall be considered as the basis for fact-finding (unless proven otherwise). But as discussed above, notarization is time-consuming and expensive, and is often not suitable for fixing evidence at the early stage of a case when the rights holder has not decided whether to invest money and effort in a potential enforcement action.

Luckily the growing need from Chinese legal practice to authenticate electronic data coincided with the explosive development of new technologies such as blockchain and timestamp.

  • Blockchain is a digital database (“the ledger”) that is replicated, shared, and synchronized among all participating members (or “nodes”) in a peer-to-peer network. When an electronic file (video, audio, or screenshot) is submitted to a node, it is given an algorithmically generated, unique code called a “hash value”. Each node of the blockchain independently validates the information and the hash value in the database, and the database is updated only if a consensus of over 50 percent participating nodes is reached.

For this reason: (1) it is very difficult for a hacker to alter or manipulate information in the database because the there is no central data storage, and the hacker must hack over 50 percent of the nodes at the same time to be successful. And (2) it is very useful to verify whether electronic data was altered or manipulated because any alteration will change the hash value of the electronic file.

  • A timestamp is data in electronic form which binds other data in electronic form to a particular time, establishing evidence that the latter data existed at that time. This effectively allows the creator of a timestamp to obtain a unique “fingerprint” for their file that records the critical date of existence.

The Chinese legal practice had quickly embraced applying the technologies to legal proceedings.

In the Provisions on Several Issues in the Trial of Cases in Internet Courts (2018), the SPC provides that: If the electronic data submitted by the parties can be authenticated through technical means of evidence collection, fixation, and tamper-resistance such as electronic signatures, trusted timestamp, hash value verification, blockchain, etc., or through the authentication of the electronic evidence deposition platform, the Internet Court should admit the data as valid evidence. SPC further confirm that the parties may request calling expert witness to testify on electronic technology issues and that the courts may, on motion or on its own, commission an appraisal or retrieve other relevant evidence for verifying the authenticity of electronic data.

Authorities across the country began developing their own evidence deposition platforms. The SPC developed the Judicial Chain, aiming to build a blockchain that is unified nationwide and enables inter-network and inter-operation judicial application. It also made requirements to the nation’s judiciary to (1) constantly advance capacity building for interoperation collaborative application; (2) enhance technical capabilities of the judicial blockchain; (3) build an internet-based judicial blockchain verification platform. At the same time, the National Time Service Center of China collaborated with tech companies to build a UniTrust Timestamp Authority, which provides evidence-fixing services based on timestamp technology.

Countless other evidence-deposition platforms had also been developed by the notary publics as well as the private sectors in China.

The emergence of these platforms allows any person to preserve (and deposit) evidence using their PC or smartphone apps, thus bringing the cost of evidence-fixing significantly lower. For comparison, notarization of the content of an infringing online store usually costs thousands of renminbi, while the costs of timestamping the same store, on the other hand, are in the tens of renminbi.

According to statistics released by the SPC, the use of the above-mentioned technologies in fixing evidence had surged. From the launch of the People’s Court Judicial Blockchain Unified Platform in August 2019 to the publication of the SPC’s white paper on internet judice later that year, 194 million pieces of data had been uploaded and deposited. Based on the author’s personal experience, blockchain-evidence-deposition or timestamping is used to some extent in every case.

Tips on fixing electronic evidence

  1. Before fixing
    • Choosing the right platform. As the laws still consider deeds issued by the notary public to be prima facie evidence, and some notary offices have developed their own evidence deposition platform, it is recommended to fix evidence using those platforms and obtain a notary deed.

Evidence deposition platforms developed by the courts across the country have the same effects in theory. However, rights holders should pay attention that platforms by the local courts may not be recognized by courts in another locality. It is always wise to use the SPC’s blockchain evidence deposition platform.

If the above is not available and rights holders are to use platforms from the private sector, reviewing the qualification of the deposition platform will be a necessary.

    • Inspecting the deposition device. When fixing electronic evidence, it is recommended to inspect the cleanliness, network connection reliability and time accuracy of the deposition device beforehand and display and record the inspection process in the final fixed evidence.
  1. During fixing

It is necessary to display and record the process of: (a) the identification of webpage or apps deposited, i.e., information from government records or developer indication; (b) the discovery of the alleged infringement; and (c) the specific alleged infringement, and so on.

  1. Tips on what to fix
    • WeChat, Alipay records: First, the interface with the content that shows the user’s personal information should be fixed; second, files, audio, or video generated during a chat shall be displayed completely and clearly; third, chat records showing facts relevant to a given case should be fixed completely.
    • Text messages and email: the content, the sender / receiver, time of sending / receipt, where the message or email was saved, and other relevant information should be fixed.
    • Electronic invoices and payment vouchers: For electronic invoices, the QR codes for verifying the invoice should be clearly displayed. For electronic payment vouchers, the right holders should click into the payment bill detail page and fix the content of payer information, receiving account, amount of payment, electronic transaction flow number, and note information.

Electronic evidence facilitates litigants, of course, there are some problems that need to be considered. On the one hand, with the rapid advancement of technology and the development of artificial intelligence, whether electronic evidence will present more challenges involving distinguishing authenticity beyond the current blockchain and timestamp solutions; on the other hand, internet companies often collect a large amount of personal information when users use their services, which may also be misused by unauthorized third parties, leading to challenges in online privacy. It is believed that by applying artificial intelligence technology more to the analysis and discrimination of electronic evidence in the future, the stability of evidence can be ensured and reliable judgment basis can be provided. At the same time, comprehensive regulatory and technological measures are expected to protect individuals' online privacy. Only by striking a good balance between the reliability of electronic evidence and the security of network privacy, can the maximum interests of the parties in the litigation be realized.

About the author

 Bin Zhang

Bin Zhang

is deputy director of the legal department at CCPIT Patent and Trademark Law Office. He graduated from Wuhan University with an LLB in international law in 1989 and obtained his LLM in intellectual property law from UNH School of Law in the United States in 2003. Since joining the firm in 1989, he has successfully handled a great number of IP cases covering trademark, copyright, licensing, unfair competition, customs protection, trade name, cyber-squatting through litigation, administration or negotiation. He has published many articles in periodicals or newspapers. He is also a co-author of the text book "Practice of IP Lawyers"

 Yifan Yang

Yifan Yang

is a trademark attorney at CCPIT Patent and Trademark Law Office in Beijing. He joined the firm after graduating from the University of International Business and Economics, where he obtained Master of Laws degree. Yang is specialized in handling trademark infringement and unfair competition cases. His expertise also includes copyright infringement, domain name disputes, legal advice on IP licenses, and other IP-related contracts. 

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