The New Civil Code of the PRC and Intellectual Property

The new Civil Code of the PRC, which will come into force on 1 January 2021, consolidates and elaborates some existing laws. It does not have a dedicated IP part, so the lex specialis such as the Patent Law, Trademark Law, Unfair Competition Law and Copyright Law will remain in force.

What is the impact of the new Civil Code on the already existing IP legislation?

The new Code contains about 30 articles directly related to intellectual property rights. Not all of them are new, many are found in existing laws. The most important innovation is the introduction of punitive damages (Article 1185), which has already been announced by the amendments to the Unfair Competition Act and the Trademark Act, as well as by the draft amendments to the Patent Act and the Copyright Act.

Punitive damages can be claimed by the plaintiff if there is intentional and serious infringement. So far, there is no official interpretation of the terms “intentional” and “serious” that is valid nationwide. The Beijing Supreme People’s Court has already stated that repeated or persistent infringement is a clear indicator of intentional infringement, not only after a judgment, but already after receiving a warning or an administrative decision, removing evidence or refusing to comply with an injunction. The Court went on to say that an infringement is considered serious if it is long and/or widespread, if it generates large illegal profits or if it endangers personal safety (e.g. of consumers), the environment or public interests.

It remains to be seen in how many court cases the plaintiffs actually claim punitive damages and how the courts will interpret the term “serious” in specific cases. The new Civil Code will not have a major impact on IP proceedings in China, as the provisions of the special laws will continue to apply. 

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