The Supreme People’s Court of China recently released the interpretations on the application of punitive damages in the civil case trial regarding intellectual property right (IP) infringement (the Interpretation), aiming to provide clear criteria for adjudication, as reported by Caixin on March 6. The Interpretation, which consists of seven provisions, has come into force on March 3.
In essence, the Interpretation is a summary of relevant laws and regulations and judicial practice in the past. According to the judicial protection of intellectual property rights in Chinese courts (2019), local people’s courts at all levels received 5,242 new first instance cases of IP infringement, with a YoY increase of 21.37%. Among them, there were 4,982 criminal cases of registered trademark infringement, up 21.01% YoY, and 210 criminal cases of copyright infringement, rising 34.62% YoY. It is necessary to increase the punishments for such infringement cases.
Punitive damages refer to excessive compensations over the actual damages of obligees, in order to increase costs of illegal practices. The introduction of punitive damages is a major move to strengthen the protection of IP in China. The revised trademark law in 2013 took the lead in establishing a punitive damages system. Following that, the anti-unfair competition law amended in 2019, the patent law and the copyright law amended in 2020 all added punitive damages rules. For instance, if the cases are severe, the compensations paid for the intentional infringement of trademarks, copyrights, or related rights will be more than one time and less than five times of the fixed amount. Notably, the amended copyright law also included sports event live broadcasting and short videos in the protection scope to strengthen copyright protection and deter piracy.