Thursday, July 14, 2016

Yuan on IP Damages in China

Yuan Zhenfu, Deputy Dean of the Shanghai University Law School, has published a short article in the Jan-Feb issue of China IP Magazine (pp. 50-53) titled How to Increase Infringement Compensation? (translation by Yu Shiwen).  Like the article by Jingjing Hu that I recently blogged about (here), this paper argues that damages for IP infringement in China are in general far too low.  The paper cites, among other things, a study conducted by the Research Center of Intellectual Property Right at Zhonhnan University of Economics and Law finding that "from 2008-2012, the average legal compensation for patent infringement cases was only 80,000 Yuan" (p.5).  (It's not clear to me from the context whether this is the average for all patents, including utility models and design patents, or only for invention patents.)  Dean Yuan goes on to note, however, that efforts are underway from the Supreme People's Court and the Legislative Affairs Office of the State Council to reform certain aspects of damages law, including increasing statutory damages to 5 million yuan (equal to about $U.S. 760,000) from the current 1 million (see also this short report published by the Covington firm last December). The article also includes a brief discussion of some recent cases in which Chinese courts have awarded relatively substantial damages, including one in which the court awarded damages of 5.4 million yuan for fifteen consolidated utility model infringement actions (that is, statutory damages of 360,000 yuan for each).  The article concludes with some tips for litigants, including "setting high compensation indications in previous settlements" which may serve as a guide to future awards.

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