CHINA: Beijing High Court Issues Guidelines for Awarding Punitive Damages

The Beijing High Court issued Guidelines on the Application of Punitive Damages in the Trial of Intellectual Property Infringement Civil Cases (the Guidelines) on April 25, 2022, in order to further standardize the application of punitive damages in civil cases of intellectual property (IP) infringement and strengthen the judicial protection of IP rights.

The Guidelines are divided into six sections consisting of 51 articles. The first section covers general issues such as the principles of applying punitive damages. The second to the fourth sections mainly cover substantive issues when punitive damages are applied, including statutory requirements, calculation of punitive damages, and relevant provisions applicable to Internet service providers. The fifth section outlines the relevant provisions on procedural issues, mainly related to the claim or change of punitive damages, and the specific requirements for the application of punitive damages in joint litigation. The last section addresses the scope of application. If the relevant provisions of guidelines previously issued by the Beijing High Court are inconsistent with the (new) Guidelines, the Guidelines shall take precedence.

The new Guidelines illustrate the circumstances for determining “intentional intellectual property infringement,” as follows:

1. Bad-faith squatting and use of others’ well-known trademarks has occurred;
2. The infringer uses others’ registered well-known trademarks on the same or similar goods;
3. The infringer covers or removes the signs of IP rights during the advertisement or provision of the infringing goods or services;
4. The infringer is aware of others’ trademark rights during the trademark right granting proceedings but still commits infringement of the trademark right;
5. The infringer still implements and uses IP rights that have been revoked or declared invalid in accordance with relevant laws due to improper acquisition, which has been deemed as infringement; or
6. The infringer continues the infringement after the competent administrative department has sent a warning notice of infringement.

Concerning the specific provisions on the application of punitive damages to Internet service providers and live streamers or purchasing agents that use their platforms, the service provider shall bear the joint liability of punitive damages with the infringers when the service provider knows that the live streamer or purchasing agent deliberately and seriously infringed others’ IP rights by using their platform but failed to take reasonable and effective measures to stop the infringement without justifiable reasons.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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