A recent decision by the Yuyao Court (Zhejiang province) to accept a civil claim of acts of infringement that had been filed by the victim was rendered in the presence of a large number of officials who had been invited to attend the hearing as the court intended to widely publicise its decision.

However, whether the decision was groundbreaking is questionable. Indeed, such a procedural move is expressly provided for in article 101 of the Criminal Procedure Code (revised in 2018):

A victim who suffers from property losses due to the defendant's criminal offenses shall be entitled to bring an incidental civil action during criminal proceedings.

The reason for the publicity surrounding this case is that the courts had previously interpreted the term "property losses" restrictively.


On 13 December 2000 the Supreme People's Court (SPC) issued a judicial interpretation (2000/47) that defined the scope of civil proceedings incidental to criminal matters as including material damage suffered as a result of a "criminal violation of personal rights" or the "destruction of his property". The interpretation excluded moral damage from the scope of possible incidental action. "Material damage" was further defined as the "actual damage" or the "damage necessarily suffered" by the victim. This judicial interpretation was annulled in 2015.

On 20 December 2012 the SPC issued the Interpretation on the Application of the Criminal Procedure Law (adopted at the 1559th session of the SPC Judicial Committee – Fa Shi [2012] 21). Chapter 6 of this interpretation concerns incidental civil actions and article 138 provides as follows:

A victim who suffers material damage as a result of the violation of his personal rights or the destruction of his property by criminals shall have the right to institute incidental civil proceedings in the course of criminal proceeding . . . the People's Court shall not accept any civil action for moral damage.

Therefore, the restrictive interpretation of the term "property losses" remained unchanged.

As a result, the practice of most courts was to refuse incidental civil claims in cases concerning intellectual property, which was viewed as intangible assets that could not be destroyed. The victim had to file a separate civil lawsuit during or after the criminal prosecution.

In recent years, some IP owners, especially trademark registrants, have tried to file civil lawsuits incidental to criminal prosecution, but the practice has varied from province to province. In Zhejiang province, the courts would not accept such civil lawsuits.

However, the debate never ended. Recently, the judges and public prosecutors of Zhejiang province discussed this issue again and preliminarily agreed to have a trial on a civil lawsuit incidental to a criminal prosecution in an IP infringement case.


A longstanding conflict existed between Andreas Stihl, the manufacturer of the famous orange and black chainsaws, and the Lu family, operating under several legal entities, including Hua Sen, Jia Ji and Sen Bao. The Lu family had been raided several times since 2014 and had continued to infringe the Stihl trademark. The quantities seized were more than sufficient to justify a criminal prosecution. Therefore, it was decided, after a full consultation with the public prosecutor, to file a civil claim for the full amount of the statutory damages provided for in the Trademark Law at the time (Rmb1 million).

On 29 March 2021 the Yuyao Court adopted all of the public prosecutor's recommendations and pronounced prison sentences of between two and three years, along with probation periods, to take account of the defendants' attitude. Stihl obtained Rmb500,000 as damages.


It is hoped that this case will be followed by many others and that the term "property losses" in the Criminal Procedure Code will be interpreted, as is correct, as including losses caused to the owners of IP rights.

It will then be possible to implement other provisions of the aforementioned 2012 SPC interpretation, which contain many practical aspects, such as:

  • the possibility for public security, the public prosecutor or the courts to mediate with the victim and the defendant to come up with an agreement on compensation (articles 148 and 153);
  • the possibility for the court to seal, seize or freeze the defendant's assets (article 152); and
  • the courts taking into account the compensation paid by the defendant (article 155).

The practice for the defendants to seek leniency in criminal prosecutions based on the compensation offered and paid to the victim or plaintiff already exists. However, the new judgment in the Stihl case might make this practice more systematic, which would be welcome.

For further information on this topic please contact Gang Bai or Paul Ranjard at Wanhuida Intellectual Property by telephone (+86 10 6892 1000) or email ([email protected] or [email protected]). The Wanhuida Intellectual Property website can be accessed at