Opinions of the Supreme People’s Court on Increasing Punishment for Intellectual Property Rights Infringement Property Rights Infringement (Mainland China)

Di Wu

After reviewing the actual practice in intellectual property cases, the Supreme People’s Court formulated its Opinions on Increasing Punishment for Intellectual Property Rights Infringement on September 14, 2020(the “Opinions”) to strive for fair trials, more effectively deter infringement by increasing penalties, and create a favorable commercial environment under the rule of law.

1. Strengthening the application of preservation measures

If a right holder is applying for preservation measures in the face of an infringement or imminent infringement of a core technology, well-known brand, popular programming, or the infringement or imminent infringement of any intellectual property right in an exhibition, the people’s court shall timely review and render a decision pursuant to law.

If a right holder petitions for an injunctive ruling to stop infringement as well as a preservation measures in an ongoing infringement action, the people’s court shall timely review both applications pursuant to the law.

If a rights holder has obtained preliminary evidence of infringement and applies for preservation of evidence because evidence of infringement may be destroyed, lost or difficult to obtain at a later time, the people’s court shall timely review and render a decision.  Technical investigators may participate in preservation measures that involve highly specialized and technical issues.

If an alleged infringer has destroyed or transferred the allegedly infringing products or other evidence against which preservation measures have been implemented so as to render the facts regarding the infringement difficult to be ascertained, the people’s court may regard the claims of the rights holder that such evidence would have substantiated as established.  In the event of obstruction of justice as provided by law, compulsory measures shall be implemented.

2. Judgment to stop infringement

If the facts are clear and sufficient to establish infringement, the people’s court may first render a judgment to stop the infringement.  As for counterfeit or pirated goods and the materials and tools used mainly in the production or manufacture of such goods, if the rights holder were able to substantiate their existence and requests their prompt destruction, the people’s court shall be supportive unless there are special circumstances, under which the people’s court may order the disposal of materials and tools mainly used in the production or manufacture of counterfeit or pirated goods outside of commercial channels to minimize the risk of further infringement as much as possible; the court will not entertain any request from the infringer to request compensation for such disposal.

3. Increased compensation for damages

The people’s courts should make full use of systems and methods such as obstruction in submission of evidence, investigation and evidence, evidence preservation, professional assessment, economic analysis, etc., to guide the parties to actively, comprehensively, correctly and honestly produce evidence, improve the scientific basis and reasonableness of calculation of damages, and fully compensate the losses of the rights holder.

4. Stronger criminal enforcement

In cases where IPR infringement is the main business of the infringer, the counterfeiting of registered trademarks for as rescue, disaster relief or epidemic-prevention goods during certain times, or repeat offenders that have already received administrative sanctions for IPR infringement, increase penalties shall be enforced with no probation as a general rule.  The unlawful income shall be seized, and there shall be enhanced application of increased fines so as to take away the offenders’ ability and condition to infringe again.