|Abstract as per original application
Multinational enterprises and China’s trading partners have long criticized the unreasonably low damages for intellectual property (IP) infringement granted by Chinese courts. It is also quite common that courts grant only a small percentage of the amount claimed by plaintiffs who successfully prove the IP infringement. The United State Trade Representative therefore has explicitly indicated in its Special 301 Reports multiple times that IP is not well protected in China because its courts have failed to provide sufficient compensation for IP owners whose rights are infringed. The Chinese government has also viewed the low damages as a major flaw of its IP system. Both President Xi Jinping and the Supreme People’s Court (SPC) have declared the determination to raise damages for IP infringement.
China’s resolve of raising damages was finally legislated into three major intellectual property (IP) laws in 2019 and 2020, which later came into effect in 2019 and 2021. There are five notable changes of damages rules in this wave of IP reform. First, right holders and courts have more flexibilities in choosing different method to calculate damages. Second, statutory damages are substantially raised. Third, punitive damages are introduced to all three major IP laws, namely Trademark Law, Patent Law, and Copyright Law. Fourth, the burden-shifting evidence rule concerning damages, which only existed in Trademark Law, are introduced to Patent Law and Copyright Law as well. Fifth, damages rules in different IP laws have substantively converged.
This project aims to study the impact of recent reform on damages in China. We propose to compare and analyse damages awarded by the SPC and the three IP Courts in Beijing, Shanghai and Guangzhou three years before and three years after the IP reform. The PI will also explore how the new punitive damages rules for IP infringement are implemented. The aim of these inquiries is to understand the impact of the IP damages reform based on empirical evidence. We will examine whether the policy goal is achieved after the reform. Moreover, under the new IP laws, China plans to apply a unified standard for damages determination in different categories of IP. We will examine whether this one-size-fits-all approach can appropriately address damages issues in different types of IP, or under identical or similar damages rules, whether courts will still develop dissimilar methods to evaluate damages across three major categories of IP.