Translation: Supreme People’s Court’s Opinions on Increasing Sanctions for Intellectual Property Infringement

Issued September 14, 2020

For the purposes of hearing cases properly, strengthening the sanctions on the infringement of intellectual property rights, effectively curbing the infringement of intellectual property rights, and creating a good legalized business environment, taking into consideration the actual trial of intellectual property rights, the following opinions are developed.

I. Strengthening the application of preservation measures

1. Where a right holder applies for conduct preservation with regard to infringement or imminent infringement involving any core technology, well-known brand, hit program, etc., or with respect to infringement or imminent infringement of intellectual property rights at any exhibition, which will cause irreparable damage, the people’s court shall review and make a ruling in accordance with the law and in a timely manner.
2. Where a right holder, during an intellectual property infringement lawsuit, applies for both preliminary judgment to cease the infringement and for conduct preservation, the people’s court shall review both applications together in accordance with the law and in a timely manner.
3. Where a right holder has preliminary evidence to prove that there is an infringement of intellectual property rights and that the evidence may be destroyed or lost, or may be difficult to obtain in the future, and the right holder applies for evidence preservation, the people’s court shall review and make a ruling in accordance with the law and in a timely manner. Where evidence preservation involves highly professional and technical issues, technical investigators or technical experts in relevant fields may participate [in the evidence preservation].
4. With regard to allegedly infringing products or other evidence on which preservation measures has already been taken, if the alleged infringer damages or transfers [such product or evidence] without authorization, causing it unable to ascertain the fact of the infringement, the people’s court may presume that the right holder’s claim that was to be supported by the evidence is established. Where a circumstance of obstructing litigation as provided for by law is constituted, compulsory measures shall be taken in accordance with law.

II. Making a judgment to cease infringement in accordance with law

5. Where the facts of infringement are clear and the infringement can be determined, the people’s court may first rule to cease the infringement in accordance with the law.
6. With regard to counterfeit or pirated goods and materials and tools mainly used for the production or manufacture of counterfeit or pirated goods, if the right holder during the civil action has provided evidence to prove the existence of thereof and requested prompt destruction, the people’s court shall support it except in special circumstances. Under special circumstances, the people’s court may order to have the materials and tools mainly used to produce or manufacture counterfeit or pirated goods disposed outside the commercial channels. Where the infringer requests compensation, the people’s court shall not support it.

III. Increasing compensation in accordance with the law.

7. The people’s court shall make full use of rules and methods including obstruction of evidence, investigation and evidence collection, evidence preservation, professional appraisal, and economic analysis to direct the parties to actively, comprehensively, correctly and honestly provide evidence, improve the scientific nature and rationality of the calculation of the amount of damages, and fully compensate for the loss of rights holders.
8. The people’s court shall determine the profit of the infringement in accordance with the law by actively using the relevant data and the average profit margin of the industry provided by the parties and obtained from the industrial and commercial department and tax department, the third-party business platform, the infringer’s website, the publicity materials, or other legally disclosed documents.
9. Where a right holder ­legally requests [the people’s court] to determine the amount of damages based on the profit of the infringement and has proved with evidence, the people’s court may orders the infringer to provide the evidence on the profit of the infringement that the infringer controls; where the infringer refuses to provide the evidence without justifiable reasons, the people’s court may determine the amount of damages based on the claim of the right holder and the evidence on record.
10. With regard to intentional infringement on intellectual property rights that constitutes serious circumstances, [the people’s court shall] support the right holder’s request for punitive damages in accordance with the law, and give full play to the deterrent effect of punitive damages on intentional infringement.
11. The people’s court shall reasonably determine the amount of statutory damages in accordance with the law. Where the infringement has caused substantial loss to the right holder or has brought huge profit to the infringer, for the purpose of fully compensate the right holder for the loss and effectively curb the infringement, the people’s court may, upon request of the right holder, determine the amount of statutory damages to the extent that is close to or reaches the upper limit.

When the people’s court determines the extent to which it imposes a high amount of statutory damages, it shall consider these factors: whether the infringer has the intention of infringement; whether the infringer is mainly engaged in infringement; whether there is repeated infringement; whether the infringement lasts for a long time; whether it covers a wide geographical area; and whether it may threats safety of human beings, damage environmental resources or harm public interests, etc.

12. Where during the second-instance proceeding, the right holder requests to include newly incurred reasonable expenses paid to cease the infringement into the amount of damages, the people’s court may review it along with others.
13. The people’s court shall reasonably determine the attorney fees requested by the right holder after comprehensively considering factors including the complexity of the case, the professionality and intensity of the work, industrial practices, and guidance price of the local government, and based on evidence provided by the right holder.

IV. Intensifying criminal enforcement

14. [When the people’s court determines] the amount of illegal business operations and the amount of illegal gains resulting from crimes of infringing on intellectual property rights committed through online sales, [the people’s court] shall comprehensively consider electronic data of online sales, bank account transaction records, delivery notes, computer system records of logistics companies, witness testimony, confession of defendants, etc.
15. With regard to [an infringer] who mainly engages in infringement, counterfeits registered trademark of goods that are used for emergency rescue and disaster relief and pandemic prevention during a certain period, or commits a crime of infringing on intellectual property rights after being given an administrative penalty for infringing on intellectual property rights, a heavier punishment shall be imposed in accordance with the law, and probation is generally not applicable.
16. In accordance with the law, strictly go after and seize illegal gains, strengthen the application of pecuniary penalty, and deprive criminals of the capacity and conditions to infringe on intellectual property rights again.

Translation by SIPS.

Original text in Chinese: http://www.court.gov.cn/fabu-xiangqing-255591.html