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China indicates its commitment to strengthen intellectual property rights protection

The Guideline on Strengthening Intellectual Property Rights Protection

06 December 2019

On 24 November 2019, China issued the Opinion on Strengthening the Protection of Intellectual Property Rights (IPR).

Trade War - Peace Offering

The opinion was issued in the context of the current trade war between China and the US. It serves as a peace offering with China expressly stating that it will strive by 2022, to effectively contain infringement and improve the current situation of IPR holders finding it difficult to prove their rights and receiving low compensation. Whilst such commitment is welcomed, it remains to be seen how it will be achieved.

In the Opinion, China has pledged to strengthen the punishment of infringement and counterfeiting including accelerating the introduction of punitive damages in patent and copyright infringement actions; increasing the maximum amount of compensation for infringement, and otherwise increasing damages. In China, statutory damages are awarded where actual damages cannot be established. The current maximum statutory damages for copyright infringement is RMB 500,000; for patent infringement, RMB 1 million and for trade mark infringement, recently increased to RMB 5 million. This may appear to be low compared to the quantum of damages that may be awarded say in the US courts.

China has further promised to focus on resolving difficulties on the part of IPR holders to prove their rights by reviewing evidence standards and rules, formulating evidence guidelines and judicial interpretations, and lowering the burden of proof. This is a long standing issue in China, made more difficult by the lack of discovery.

Case Guidance

Interestingly, China is professing to establish a case guidance mechanism, public trial for major cases and publicising repeated infringements. How the case guidance mechanism will be implemented remains unclear bearing in mind that China is not a common law jurisdiction.

Apart from issues in infringement and enforcement proceedings, China has also vowed to accelerate examination and rights protection procedures for patents, trademarks and new plant varieties in key technical fields.

Positive Gestures

The Opinion certainly represents a positive gesture on the part of China and indicates China's commitment to strengthening judicial protection for innovation.