News• Apr 23, 2025
Notice on Issuing the "2025 Intellectual Property Administrative Protection Work Plan"
National Intellectual Property AdministrationIntellectual Property Bureaus of all provinces, autonomous regions, municipalities directly under the Central Government, and the Xinjiang Production and Construction Corps:The "2025 Intellectual Property Administrative Protection Work Plan" (hereinafter referred to as the "Work Plan") is hereby issued to you. Please earnestly implement it in light of local realities.Each provincial intellectual property bureau should carefully organize and implement the tasks deployed in the Work Plan, and submit semi-annual and annual work summaries respectively by July 15, 2025, and January 15, 2026, through the comprehensive office system (OA) of the National Intellectual Property Administration. Electronic copies should be simultaneously sent to the contact email address. The statistical table of intellectual property law enforcement guidance cases should be submitted together with the summary.National Intellectual Property Administration March 17, 2025This Work Plan is formulated to thoroughly implement the important instructions and directives of General Secretary XI Jinping on comprehensively strengthening intellectual property protection work, resolutely implement the decision-making and deployment of the Central Committee of the Communist Party of China and the State Council, effectively promote the implementation of the "Outline for Building an Intellectual Property Power (2021-2035)", the "14th Five-Year Plan for Intellectual Property Protection and Utilization", and the "Opinions on Strengthening Intellectual Property Protection", further improve the intellectual property protection system, strengthen the whole-chain protection of intellectual property, and help create a first-class business environment that is market-oriented, law-based, and internationalized.I. Promote the Implementation of Laws and Regulations. Implement and publicize the Patent Law and its implementing regulations. Cooperate with the revision of the Trademark Law and the Regulations on the Protection of Layout-Designs of Integrated Circuits. Implement the "Measures for Administrative Adjudication and Mediation of Patent Disputes", the "Provisions on Regulating Patent Application Behaviors", the "Provisions on the Registration and Administration of Collective Marks and Certification Marks", and the "Measures for the Protection of Geographical Indication Products". Implement law enforcement norms such as the "Provisions on Evidence in Trademark Administrative Law Enforcement", the "Calculation Method for the Illegal Business Volume of Trademark Infringement Cases", and the "Provisions on Case Causes of Intellectual Property Cases in the Market Regulation Field (for Trial Implementation)".II. Improve and Optimize the Protection System. Promote the implementation of the "Implementation Plan for the Intellectual Property Protection System Construction Project", and strengthen the construction of the intellectual property protection policy and standard system, management system, social co-governance system, security governance system, and support system. Conduct an assessment of the implementation of the intellectual property protection construction project in a timely manner. Establish a regular communication mechanism with private enterprises and foreign-funded enterprises, listen to their opinions and suggestions on intellectual property protection in a timely manner, and respond to their demands.III. Standardize the Application and Use of Patents and Trademarks. Continuously and severely crack down on abnormal patent applications, malicious trademark registrations, and hoarding through measures such as improving management systems, carrying out special campaigns, guiding industry self-discipline, and strengthening the supervision of agency institutions. Strengthen professional guidance on investigating and punishing the illegal use of prohibited trademarks that are deceptive or have an adverse impact. For trademarks that have already been registered, promptly report them to the National Intellectual Property Administration for ex officio invalidation in accordance with procedures, and intensify follow-up handling after the invalidation decision takes effect. Promote the implementation of the "Trial Standards for Government Procurement Requirements for Patent and Trademark Agency Services".IV. Strengthen Patent Protection. Improve the administrative adjudication review and reporting mechanism for major patent infringement disputes. Strictly review the facts and evidence that meet the case-filing conditions, and standardize the issuance of supporting materials. Promote the standardization of administrative adjudication of patent infringement disputes, smooth the acceptance channels, optimize the trial model, intensify case handling efforts, and highlight the quality and efficiency of case handling. Accurately identify infringement facts, strictly determine infringement acts, and actively handle simple cases quickly and complex cases meticulously. Encourage localities to fully rely on professional forces such as technology investigation centers, technology investigator expert databases, and intellectual property appraisal institutions to provide technical support for case handling.V. Strengthen Trademark Protection. Strengthen the timely, key, and cited protection of well-known trademarks. Encourage localities to strengthen the protection of time-honored Chinese brand trademarks and well-known trademarks related to the inheritance and development of cultural heritage by carrying out special governance campaigns and establishing enterprise credit evaluation systems, and severely crack down on "brand-aping" and other infringement acts. Strengthen the supervision and professional guidance on concealed infringement acts in the Internet field, such as infringement through keywords, combined use of registered trademarks, and using design patents to infringe on others' prior registered trademarks.VI. Strengthen the Protection of Geographical Indications. Implement the "Implementation Plan for the Unified Geographical Indication Recognition System", and orderly promote the transformation of original agricultural geographical indications. Promote the construction of national geographical indication protection demonstration zones with high quality, and strengthen the supervision during the implementation of geographical indication protection projects. Conduct an evaluation of the implementation of the "14th Five-Year Plan for the Protection and Utilization of Geographical Indications". Encourage localities to use means such as origin traceability to improve the characteristic quality assurance system for geographical indications and the professional inspection and testing system for geographical indications. Establish and improve the work system for the approval, cancellation, and supervision of the use of the special mark for geographical indications, and standardize the use of the special mark.VII. Strengthen the Protection in New Fields and New Business Forms. Actively cooperate with the registration service of data intellectual property, organize and carry out publicity and promotion, policy interpretation, and registration guidance for the public in a timely manner, and guide and encourage the public to actively carry out registration. Strengthen intellectual property protection in the field of artificial intelligence, and publicize and implement the "Trial Guidelines for Patent Application Related to Artificial Intelligence". Increase the intensity of intellectual property protection for forward-looking and strategic emerging industries such as new energy vehicles, lithium-ion batteries, and photovoltaics. Improve the working mechanism in combination with industry and regional characteristics, strengthen the handling of cases such as patent administrative adjudication, and provide precise guidance services.VIII. Strengthen Protection in People's Livelihood and Hot-spot Areas. Focus on fields related to public interests and the vital interests of the people, such as food and medicine, rehabilitation aids, children's toys, household appliances, and green and low-carbon technologies. Increase the intensity of daily supervision over intellectual property infringement and illegal acts and administrative law enforcement guidance on trademarks and patents. For areas where infringement occurs frequently, promptly carry out special governance of intellectual property. Increase the intensity of intellectual property protection in the seed industry, and strengthen professional guidance on investigating and punishing infringement acts such as counterfeiting and brand-faking.IX. Strengthen Protection during Major Events and Key Nodes. Do a good job in the intellectual property protection of large-scale events such as the 9th Asian Winter Games, the 12th World Games, and the 15th National Games. Severely crack down on infringement acts such as counterfeiting sports event souvenirs and cultural and creative products. Strengthen the intellectual property protection of large-scale exhibitions such as the China Import and Export Fair, the China International Import Expo, the China International Fair for Trade in Services, and the China International Consumer Products Expo. Strengthen pre-exhibition inspections, in-exhibition inspections, and post-exhibition follow-up, smooth the complaint channels, and quickly handle intellectual property disputes. Do a good job in intellectual property protection during festivals such as May Day, the Mid-Autumn Festival, and National Day. Strengthen the supervision of e-commerce platforms, supermarkets, and professional markets to prevent the circulation of counterfeit and infringing goods. Conduct risk investigations and special rectifications at the time when seasonal geographical indication products are intensively launched on the market, and strictly regulate the illegal use of geographical indications.X. Strengthen Foreign-related Intellectual Property Protection. Promote the establishment of a foreign-related intellectual property protection working mechanism within the region. Improve the foreign-related intellectual property protection service system, handle various cases fairly and justly, and equally protect the legitimate rights and interests of foreign-invested enterprises. Strengthen the construction of local sub-centers for overseas intellectual property dispute response guidance, with a focus on strengthening guidance services for private enterprises in overseas disputes. Improve the overseas risk early-warning mechanism, strengthen the early-warning monitoring of disputes such as "Section 337 investigations", cross-border e-commerce litigation, and malicious trademark squatting, and enhance the timeliness and initiative of serving enterprises. Strengthen coordination and connection with the commerce department, and strictly manage the external transfer of intellectual property rights in technology exports in accordance with the law.XI. Deepen Rapid and Collaborative Protection. Further promote the high-quality work of rapid and collaborative intellectual property protection, strengthen the operation and management of national-level intellectual property protection centers and rapid rights protection centers, review and verify the pre-filing entities and agency institutions for patent pre-examination, and strengthen the management of pre-examination quality and public opinion monitoring. Aggregate various intellectual property resources, strengthen departmental communication and cooperation, standardize and smooth the connection procedures, and promote the rapid handling of intellectual property disputes. Encourage national-level intellectual property protection centers and rapid rights protection centers to provide assistance or technical support for administrative adjudication and administrative mediation. Encourage national-level intellectual property protection centers to carry out multi-mode trials of patent reexamination and invalidation cases, and promote the connection between patent right confirmation and administrative adjudication and administrative mediation of infringement disputes. Encourage national-level intellectual property protection centers to set up workstations in areas with concentrated original innovation, such as national laboratories and large-scale scientific facilities. Establish an intellectual property public service mechanism in science and technology parks and industrial parks, and support qualified intellectual property public service institutions to carry out information services such as overseas intellectual property rights protection and infringement early-warning.XII. Strengthen Cross-departmental and Cross-regional Collaboration. Strengthen cooperation with people's courts, procuratorial organs, and public security organs, establish a long-term liaison mechanism, and promote the unification of standards for administrative and judicial protection of intellectual property. Deepen cross-regional intellectual property administrative protection cooperation in regions such as Beijing-Tianjin-Hebei, the Yangtze River Delta, the Pan-Pearl River Delta, and Chengdu-Chongqing. Do solid and detailed work in information sharing, joint evidence collection, mutual recognition of results, etc., strengthen the follow-up handling of transferred clues, strengthen the collaborative protection of key trademarks and geographical indications and the evaluation of protection effects, and solve new problems such as "concealed" infringement across regions.XIII. Promote the Resolution of Disputes through Social Co-governance. Strengthen the administrative mediation of patent ownership disputes, invention award and remuneration disputes, etc., strengthen case-handling guidance and linkage, and improve the quality and efficiency of mediation. Strengthen the professional construction of people's mediation organizations. Strengthen the construction of the mediation team by setting up full-time mediators and establishing expert databases, etc., and enhance the professionalism and credibility of mediation. Promote the online connection between litigation and mediation for intellectual property disputes. Strengthen intellectual property dispute arbitration, and expand the use of arbitration channels to resolve intellectual property disputes. Strengthen the construction of the credit system in the field of intellectual property, and strengthen the dishonesty punishment for trademark and patent infringement, malicious trademark squatting, abnormal patent applications, etc. Give full play to the role of typical cases of multiple mediation of intellectual property disputes, do a good job in case selection, promotion, and release, and intensify the experience exchange and promotion.XIV. Strengthen Professional Law Enforcement Guidance. Strengthen professional guidance on law enforcement in the field of intellectual property to effectively crack down on various infringement and illegal acts. Standardize the case request handling work system. For requests for instructions on difficult cases, conduct case situation research and legal analysis in a timely manner and give replies. Strictly implement the written reply and filing system for provincial intellectual property management departments. Increase the intensity of follow-up handling of replied cases, and improve the quality and efficiency of case handling. Do a good job in the review of case files. Strengthen the selection and submission of guiding cases.XV. Promote Intelligent Supervision and Protection. Continuously explore the application of new technologies such as the Internet, big data, cloud computing, and blockchain in intellectual property supervision. Promote the use of the National Intellectual Property Protection Information Platform, support localities in accelerating the construction of intellectual property public service platforms and independently controllable special databases, and strengthen data sharing and business collaboration. Steadily promote the implementation of national standards such as the "Specifications for Intellectual Property Protection in Commodity Trading Markets" and the "Intellectual Property Protection Management on E-commerce Platforms". Encourage regions with conditions to use big data technology to carry out infringement and illegal risk monitoring, and achieve real-time monitoring of clues of infringement and illegal acts on e-commerce platforms.XVI. Strengthen Publicity and Training. Coordinate traditional and emerging media, make good use of converged media, and publicize the measures and achievements of intellectual property protection work through multiple channels. Make full use of important opportunities such as the National Intellectual Property Publicity Week to carry out centralized publicity, release typical cases and experience, and create a good atmosphere for strengthening administrative protection. Strengthen the publicity and training of newly issued policies and regulations such as the "Measures for Administrative Adjudication and Mediation of Patent Disputes" and the "Provisions on Evidence in Trademark Administrative Law Enforcement", and actively carry out activities such as business training, case discussions, and skills competitions to improve the administrative protection capabilities of grass-roots intellectual property departments.XVII. Strengthen Organizational Guarantee. Each provincial intellectual property bureau should earnestly organize and implement, clarify the division of responsibilities, refine work measures, and make targeted improvements in response to the shortcomings and deficiencies in intellectual property protection in the 2024 central quality, food safety, and intellectual property protection assessment. Strengthen supervision and guidance, commend units and individuals who are responsible for their work and have outstanding achievements, and criticize those where infringement occurs frequently and the protection effect is not good. Promptly urge rectification, report work progress to the National Intellectual Property Administration as required, and seek instructions and reports in a timely manner for important matters.Notice on Issuing the 2025 Intellectual Property Administrative Protection Work Plan (qq.com) (Source: China National Intellectual Property Administration WeChat)
News• Aug 15, 2024
Key infringement cases highlight Chinese courts’ approaches to damages
In summaryDamages awards are key issues that right holders care about, especially after Chinese courts have implemented punitive damages since 2013. Recently, there have been some major cases in China that have granted a very high number of damages awards. This article mainly introduces some typical cases in the past year and the Chinese laws and regulations on damages awards and punitive damages, which are helpful for rights holders to collect evidence and claim punitive damages in a trademark infringement civil lawsuit.Discussion pointsRecent trademark infringement cases in China with high damages awardsMethods of calculating benefits obtained by the infringers in trademark infringement casesConsiderations of Chinese courts on damages awardsApplication of punitive damagesEvidence collection to prove damages in practiceReferenced in this articleChinese Trademark LawSupreme People's Court Interpretation on the Application of Punitive Damages in Civil Cases of Intellectual Property InfringementSupreme People's Court Provisions on Several Issues Concerning Evidence in Civil Litigation of Intellectual Property RightsChateau Lafite Pan Pan Siemens Article 63 of the Chinese Trademark Law stipulates the following ways to calculate damages: the actual losses suffered by the rights holder, the benefits gained by the infringers due to the infringement and a reasonable multiple of the trademark licensing fee. The above calculation methods should be applied in order and are subject to five times of punitive damages at most if the infringement is severe and of bad faith. If all methods are not able to determine the damages, the court shall award compensation by discretion in the range of under 5 million yuan (statutory damages).[1]In practice, statutory damages are mostly applied. After 2019, punitive damages have increasingly been applied by the courts. When calculating damages, the most commonly applicable method is calculating the benefits gained by the infringers. In the past year, there were several high damages awards cases in China, and they applied different methods to calculate the damages amounts, which demonstrates the current judicial trend towards punishing and deterring infringers. Below are three typical cases, which were listed in the national top 10 of intellectual property cases or the local top 10 of intellectual property cases.Chateau Lafite caseThe plaintiff was the trademark holder of ‘LAFITE’ and ‘CHATEAU LAFITE ROTHSCHILD’ for wine.[2] The infringers registered and used the trademarks ‘CHATEAU LAFITE in Chinese’ and ‘LAFEI MANOR’ for wine. The Court decided that both marks were similar to the plaintiff’s marks and such use constituted trademark infringement. As for the damages awards, the plaintiff claimed to calculate them based on the benefits gained by the infringers, namely, sales volume times profit rate, and claimed punitive damages. The Court thoroughly examined all the evidence submitted by each party and made the following calculation.First, based on the sales invoices and customs declaration forms of importing wine, the Court calculated the whole sales volume of the infringing goods.Second, the Court needed to calculate the profit rate by comparing the infringing goods’ selling price and cost price. As the infringing goods were sold in different units, such as bottle, box and set, etc, the Court decided to calculate the same per bottle, which is the minimum selling unit, by dividing the whole sales volume and number of sold bottles extracted from invoices.The cost price of infringing goods was calculated based on the customs declaration forms as the wine was imported to China. Pursuant to the price of each litre of imported wine and the fact that each bottle of wine contains 0.75 litre, the Court was able to calculate the cost price per bottle. Therefore, the profit rate equalled to:(Selling price per bottle – cost price per bottle)Selling price per bottleThe benefits the infringers gained could then be calculated accordingly.Finally, as for the claim of punitive damages, the Court considered the high reputation of LAFITE, the extensive sales scales of the infringers and the misleading advertising of taking a free ride on LAFITE’s reputation, and granted two times the punitive damages. Pan Pan case The plaintiff was the trademark holder of ‘Pan Pan’, which is a reputable brand of security doors in China, and its house logo is a panda.[3] The infringers registered a company with the trade name ‘Xin Pan Pan’ engaging in the same business of construction materials, including security doors and windows. The infringers also prominently used ‘Xin Pan Pan’ as a trademark extensively, including in the domain name, website, WeChat account, app, advertising brochures and offline shops. The Court decided that both parties’ marks were similar and were used on similar goods. The infringers’ behaviour easily caused confusion and constituted trademark infringement.In this case, the plaintiff was not able to collect the infringers’ sales data, and the infringers stated there were no proper financial documents to calculate their profits during the infringing period (2017–2019). Under this circumstance, although the evidence submitted by the plaintiff was not very sufficient or accurate, it could be used as valid evidence of the infringers’ profits. The evidence submitted by the plaintiff mainly included advertising material in 2018 in which the infringers declared they would reach one billion yuan in production value and a 50 per cent growth rate per year in the next five years. Based on the aforesaid statistics, the Court was able to figure out the total sales volume from 2017 to 2019 to be 361 million yuan. As for the profit rate, the Court adopted a national average profit rate of 7.5 per cent in the furniture manufacturing industry in 2017. Therefore, the profit gained from the infringement was 27.075 million yuan (361 times 7.5 per cent). The Court granted four times the punitive damages in this case, due to the following considerations: the legal representative of the infringers had business relationship with the plaintiff and should have known about ‘Pan Pan’ trademark;the infringers not only plagiarised the ‘Pan Pan’ mark, but also used a similar panda logo;the infringers sometimes omitted the ‘Xin’ character and directly used ‘Pan Pan’; even after the ‘Xin Pan Pan’ mark was invalidated, the infringers still continued the infringement; and the infringers’ business expanded to 12 provinces and 180 distributors and nearly 100 offline shops. The damages awards were determined to be 108.3 million yuan (27.075 times 4) and more than the plaintiff’s claim of 95 million yuan. Therefore, the plaintiff’s claim was fully supported by the court.Siemens caseSiemens is a famous brand of household electric appliance. The infringers used ‘Shanghai Siemens Electrics Co, Ltd’ (a shell company registered in Seychelles) on its washing machines. The Court decided the above company name was used as a trademark with the function of identifying the source and ‘Siemens’ was the distinctive part, which was identical with the plaintiff’s mark. Such behaviour constituted trademark infringement and the use of ‘Siemens’ as trade name constituted unfair competition.[4]The plaintiff claimed damages awards of 100 million yuan based on the infringers’ benefits due to the infringement.[5] However, the plaintiff failed to submit financial information of the infringers to prove this. The Court demanded the infringers submit their account books to ascertain the facts, but the infringers did not cooperate. The Court thus considered the following points to determine the damages: Siemens was an enterprise in the Fortune Global 500 and its trademark had acquired a high reputation.The infringers obviously acted in bad faith as they should have known about Siemens, and they also plagiarised other brands, such as Philips and AO Smith. The scale of infringement was extensive, considering the plaintiff discovered infringing washing machines in many provinces, and the infringers claimed to have more than 1500 distributors, with sales volumes of 1.5 billion yuan per year, and their business lasted for around five years.Referring to the annual reports of other peer operators in the industry of washing machines, the Court admitted an average profit rate of 35 per cent. Out of the total sales volume of 1.5 billion yuan for all washing machines, the Court decided 1/15 of them were branded with an infringing mark by discretion. Hence, the infringers’ benefits would be 1.5 billion times 1/15 times 35% times 5, namely, 175 million yuan, which was beyond the plaintiff’s claim. Based on the above, the plaintiff’s claim of 100 million yuan should be fully supported. Calculation of benefits obtained by infringersDamages awards are an important part of increasing the deterrence of civil action. If infringers could make more profits than damages awards, civil action would certainly not be able to stop infringement. On the other hand, Chinese laws follow the Principle of Indemnity that damages awards should cover the right holders’ losses but should not be more, to prevent malicious lawsuits. In practice, it has always been a challenge for right holders to collect sufficient evidence to accurately calculate infringers’ benefits, and the court is usually inclined to decide damages awards by discretion, which is easier without many calculations.The above three cases share the following common points that allow the court to determine very high damages awards: the right holders had some basic evidence to prove the infringers’ benefits, such as invoices, customs declaration forms, statements from the infringers in some advertising materials; and the benefits were clearly much more than the statutory amount (5 million yuan). Under such circumstances, it would be unconscionable to decide the damages awards under the range of 5 million yuan.There is another productive way for right holders to claim damages by requiring infringers to provide financial statistics. The Chinese Trademark Law stipulates that: In order to determine the amount of damages, when the right holders have made every effort to provide evidence, and the account books and materials related to the infringement are mainly in the possession of the infringers, the court may order the infringers to provide such account books and materials related to the infringement; if the infringers do not provide the same or provide false accounts and materials, the court may refer to the rights holders’ claims and provided evidence to determine the amount of damages.[6]Furthermore, the Supreme People's Court Provisions on Several Issues Concerning Evidence in Civil Litigation of Intellectual Property Rights stipulates that:The court, in accordance with the law, requires the parties to submit relevant evidence. If a party refuses to submit without justifiable reasons, submits false evidence, destroys evidence, or engages in other acts that render the evidence unusable, the court may presume that the claims of the other party concerning the matters to be proved by such evidence are established.[7]The above laws and regulations basically form the system of proof impairment in China and are very helpful for right holders to reduce their liability of proof. With the above support, the right holders first collect some basic evidence of the infringers’ profits, such as: sales data displayed on e-commerce platforms; the infringers’ self-admission at some event or in advertising materials (especially TikTok videos and Little Red Book posts); and the average rate of profit in the industry. Based on this evidence, the right holders further file a request with the court for account books and materials related to the infringement from the infringers. If the infringers do not cooperate with the court’s order, they shall bear the negative consequences, and the right holders’ evidence and calculations will be very likely to be admitted by the court.Punitive damagesPunitive damages are a relatively new system in China.[8] They are predicated on the plaintiff's request, and the court must not apply punitive damages on its own initiative. Punitive damages must be claimed before the conclusion of the court debate in the first instance. Applying punitive damages requires two preconditions: the infringement is severe and in bad faith (intentional). The Supreme People's Court Interpretation on the Application of Punitive Damages in Civil Cases of Intellectual Property Infringement (the Judicial Interpretation on Punitive Damages) explains in detail the application of punitive damages. In ‘severe’ cases, the Judicial Interpretation on Punitive Damages lists the following conditions: committing the same or a similar infringement again after being administratively penalised or adjudicated by the court for infringement, the infringer again commits the same or a similar infringement; engaging in the infringement of intellectual property rights as a business; abricating, destroying or concealing evidence of the infringement; refusing to comply with preservation rulings; the profits obtained from the infringement or losses suffered by the right holder are substantial; the infringement may endanger national security, public interest or personal health; andother circumstances that can be determined as severe.[9]In bad faith cases, the Judicial Interpretation on Punitive Damages lists the following conditions: the infringer continues to commit the infringement after being notified or warned by the right holder or an interested party; the infringer or its legal representative or administrator is the legal representative, administrator or actual controller of the right holder or an interested party; there exists a labour, service, cooperation, licensing, distribution, agency, representation or other such relationship between the infringer and the right holder or an interested party, and the infringer has had access to the infringed intellectual property; there have been business dealings or negotiations for the purpose of reaching a contract between the infringer and the right holder or an interested party, and the infringer has had access to the infringed intellectual property; the infringer engages in piracy or counterfeiting registered trademarks; andother circumstances that can be deemed as bad faith or intentional.[10]If a trademark infringement case meets the above requirements, then punitive damages can be considered. The punitive damages are calculated by base number times a multiple. As mentioned above, the base number should be determined by the actual losses suffered by the right holder, the benefits gained by the infringer due to the infringement and a reasonable multiple of the licensing fee for the trademark. As for the multiple, the Judicial Interpretation on Punitive Damages stipulates the factors to consider, namely, the degree of the infringers’ subjective fault and the severity of the infringement act, etc.[11] These considerations are quite general, so in practice the multiple is mainly decided discretionarily by the court, and the multiple does not have to be an integer, according to the understanding and application of the Judicial Interpretation on Punitive Damages.[12] Technically, punitive damages only apply when the damages can be calculated by the actual losses suffered by the right holder, the benefits obtained by the infringer due to the infringement or the multiple of the licensing fee for the trademark. If the court applies statutory damages, punitive damages should not be adopted. This is mainly because of the consideration that when the court decides the amount of statutory damages within the 5 million yuan limit, it should have considered the factors of the reputation of the right holder, the severity of the infringement and the bad faith of the infringer, etc, which already include the factors of punitive damages. In the past few years, there have been some cases that adopt punitive damages and statutory damages at the same time. That is to say, for the damages that can be calculated and ascertained (with evidence such as sales data), the court calculates the same and rules punitive damages accordingly; for the damages that cannot be accurately calculated (without sufficient evidence), the court decides the amount at its discretion. The final damages awards will be the sum of the above two parts.[13] This mainly happens when the infringement is severe, and each part of damages alone may not be able to cover the right holders’ losses or to deter the infringers. This is a new and meaningful exploration of the damages awards system that can help the right holders to reduce their burden proof and better defend their interests. As we know, it is challenging for right holders to have the exact financial information of the infringers, especially considering that many infringers in China are rather small-scale, with no standardised financial management. Therefore, with this new tendency, punitive damages can be used more often and play a more important role in future trademark infringement cases.Currently, the examination criteria of damages awards and punitive damages still varies in different provinces and courts in China, especially when the evidence is insufficient to calculate the damages from infringers’ benefits accurately. Some courts stick to the statutory damages and have a high standard for evidence, some are more open to discretionary damages and are willing to apply punitive damages when there is only basic evidence. For rights holders, it is advisable to arrange a thorough investigation against the infringers before initiating the lawsuit and try to establish jurisdiction in the more open courts. Here are two insights for the right holders in defending their rights through the above three typical cases and the judicial interpretation on punitive damages: They should actively defend their rights, such as filing oppositions or invalidations against malicious trademarks, or sending demand letters to infringers, because these measures can lead to the infringers’ activities being considered repeated infringements, which can then be subject to punitive damages.They should fully utilise sales data disclosed by infringers through their website and other public channels to prove infringers’ profits.[1] Article 63 of the Chinese Trademark Law.[2] One of the national top 10 intellectual property cases in China in 2023, [2022] Zui Gao Fa Min Zhong No. 313. [3] One of the top 10 intellectual property cases in Jiangsu Province in 2023, [2022] Zui Gao Fa Min Zhong No. 209.[4] One of the national top 10 intellectual property cases in China in 2023, [2022] Zui Gao Fa Min Zhong No. 312.[5] The plaintiff claimed damages based on unfair competition, not the trademark infringement. But considering the spirit of trademark law and anti-unfair competition law on damages awards is the same, and this case is rather representative, it is included in the article.[6] Article 63 of Chinese Trademark Law. [7] Article 25 of the Supreme People's Court Provisions on Several Issues Concerning Evidence in Civil Litigation of Intellectual Property Rights.[8] Punitive damages were included in Chinese Trademark Law in 2013 when the multiple was three times at most. In 2019, the Chinese Trademark Law was amended, and the multiple was raised up to five times. In 2021, punitive damages were added into Civil Code.[9] Article 4 of the Judicial Interpretation on Punitive Damages.[10] Article 3 of the Judicial Interpretation on Punitive Damages.[11] Article 6 of the Judicial Interpretation on Punitive Damages.[12] https://www.court.gov.cn/zixun/xiangqing/297121.html. [13] [2022] Hu 73 Min Zhong No. 187. [2020] Yue 0104 Min Chu No. 46217.
