On Nov. 27, 2016, China released a Guideline on better protection of property rights, in an effort to shore up social confidence and promote social justice. The Guideline highlights, among others, the intent of strengthening protection of intellectual property rights (IPRs).

In particular, the Guideline calls for,

  • intensifying the punishment for IPR infringements by increasing the legal cap on liability, exploring for and establishing the punitive damage system for infringing IPRs such as patent rights and copyrights, and urging infringers to pay punitive compensation for his/her malicious behaviors and any reasonable expenses of right owners for preventing infringement, thus increasing the costs for IPR infringement;
  • establishing working mechanism for collecting source information of counterfeiting products and including willful infringement behaviors over IPRs into the credit records of the relevant enterprises or individuals, so as to further push forward the information disclosure of administrative cases of IPR infringement;
  • improving the working mechanism for judicial examination on IPR cases to ensure an active role of the intellectual property courts in advancing the adjudication system of combined trials of criminal, civil and administrative IPR cases, so as to strengthen the convergence of administrative enforcement and criminal justice to intensify the judicial protection of IPRs;
  • improving the foreigner-related IPR enforcement mechanism by strengthening the international cooperation of criminal enforcement and intensifying the investigation of foreigner-related intellectual property criminal cases;
  • cracking down upon unfair competition, strengthening protection of brand reputation;
  • combining protection and utilization of IPRs, fastening the establishment of mechanisms and platforms for transfer of IPRs to speed up exploitation of IPRs.

In a very recent patent infringement judgment made by Beijing Intellectual Property Court on Dec. 8, 2016 regarding a patent for a USBKey used by banks, the Court supported the patentee’s claimed damages of 50 million RMB (about USD 7,241,969) including the damages of 48,142,000 RMB (about USD 6,972,857) calculated on the amount of the infringing products multiplying the reasonable profits of each product, the inferred damages of 858,000 RMB (about USD 124,272) where the defendant refused to submit the evidence of sales volumes as well as reasonable expenses of 1 million RMB (about USD 144,839) of the right owner for enforcing the patent. It seems that the courts have been following the spirits of the above Guideline in the trial of IPR cases.