{"id":3557,"date":"2021-03-15T21:51:00","date_gmt":"2021-03-15T13:51:00","guid":{"rendered":"https:\/\/east-ip.com\/?p=3557"},"modified":"2025-05-01T21:57:57","modified_gmt":"2025-05-01T13:57:57","slug":"ip-enforcement-supreme-peoples-court-rules-on-punitive-damages","status":"publish","type":"post","link":"https:\/\/www.east-ip.com\/zh\/insights\/ip-enforcement-supreme-peoples-court-rules-on-punitive-damages\/","title":{"rendered":"IP Enforcement \u2013 Supreme People\u2019s Court Rules on Punitive Damages"},"content":{"rendered":"

On February 7, 2021, the Supreme People\u2019s Court of China (\u201cSPC\u201d) issued Interpretations on the Application of Punitive Damages in Adjudicating Civil Intellectual Property Rights Infringement Cases<\/em> (\u6700\u9ad8\u4eba\u6c11\u6cd5\u9662\u5173\u4e8e\u5ba1\u7406\u4fb5\u5bb3\u77e5\u8bc6\u4ea7\u6743\u6c11\u4e8b\u6848\u4ef6\u9002\u7528\u60e9\u7f5a\u6027\u8d54\u507f\u7684\u89e3\u91ca)\u201d (\u201cSPC Interpretation\u201d). The SPC Interpretation took effect on March 3, 2021, and it clarifies the conditions under which courts may impose punitive damages under all major IP legislation in China, including the Trademark Law and Anti-Unfair Competition Law.<\/p>\n\n\n\n

Under applicable legislation, punitive damages may be awarded if a Chinese court finds that an infringement was both \u201cintentional\u201d and \u201cserious\u201d. The SPC Interpretation sets out the detailed factors Chinese courts must consider when determining if these conditions exist.<\/p>\n\n\n\n

Key Provisions<\/h2>\n\n\n\n

Actual v. Statutory Damages<\/h3>\n\n\n\n

In China, punitive damages may only be applied where the base amount of damages is calculated using verifiable data relating to the infringer\u2019s actual profits, the victim\u2019s actual losses or a deemed licensing fee. Chinese IP laws do not allow plaintiffs access to punitive damages where the plaintiff has requested an award of statutory damages.\u00a0 The SPC Interpretation confirms the status quo in this regard. However, Chinese laws do allow courts to consider intentionality and seriousness when determining statutory damages.1<\/a><\/sup>\u00a0As such, plaintiffs will be well-served to cite the provisions of the SPC Interpretation as a reference when pursuing statutory damages.2<\/a><\/sup><\/p>\n\n\n\n

Intention<\/h3>\n\n\n\n

Chinese IP legislation sometimes refers alternatively to \u201cintention\u201d (\u6545\u610f) or \u201cbad faith\u201d (\u6076\u610f) (malice) for the purpose of determining an infringer\u2019s state of mind and the fixing the level of penalty or compensation. For example, the Civil Code, the Patent Law and the Copyright Law refer to \u201cintentionality\u201d, while the Trademark Law and the Anti-Unfair Competition Law refer to \u201cbad faith\u201d. Chinese courts, scholars and practitioners have generally viewed these terms as having different meanings. But the SPC Interpretation clarifies that, for the purpose of determining punitive damages, \u201cbad faith\u201d and \u201cintentionality\u201d should be deemed as having the same meaning.<\/p>\n\n\n\n

Proving Intention<\/h3>\n\n\n\n

The SPC Interpretation makes clear that intent may be deemed established where the infringer has previously been notified or warned by the plaintiff but continues the infringe.<\/p>\n\n\n\n

The interpretation also states that any case involving the counterfeiting of registered trademarks or pirating of copyright can be deemed to fulfil the intentionality requirement.<\/p>\n\n\n\n

Proving \u201cSeriousness\u201d<\/h3>\n\n\n\n

The SPC Interpretations sets out a wide range of broad as well as specific factors that courts may consider when determining whether an infringement is \u201cserious\u201d, including:<\/p>\n\n\n\n