Increased Compensation in IPR Infringement Cases

Tailwind for China’s entrepreneurs: The Supreme People’s Court has released a document that protects the property rights of entrepreneurs and strengthens their autonomy concerning management issues. The Circular on Creating a Favorable Legal Landscape to Facilitate Innovation and the Start-Up of Entrepreneurs by Leveraging the Adjudicatory Function of the Court also includes the protection of IP and raises awareness among entrepreneurs about legal issues.

The protection of intellectual property facilitates the provision of evidence in IP litigation and increases its efficiency. The so-called Three-in-One system intends to deal with all three types of IP cases, i.e. civil, administrative and criminal, by a single division of the same court at all levels: the first instance and the appeal. The protection of trade secrets will be extended, with more emphasis on employee rights.

In the case of damages, a mechanism for the judicial determination of reasonable payments will be established and the possibilities of punitive damages by counterfeiters are weighed. On the bottom line, compensation for IP infringement cases shall be increased. The determination of the amounts should be based primarily on the market value of intellectual property. This should compensate the right holder, penalize the counterfeiter and make counterfeiting more expensive in general.

The aim of the Supreme People’s Court is to reduce the gap between the low costs of counterfeiters and the high expenditure of the original manufacturers for the enforcement of their rights. A successful strategy, as our project experience has shown so far. The compensation payments that can be obtained in China have been rising significantly for some time.

Picture: Supreme People’s Court of the People’s Republic of China

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