In the first of a three-part series, Managing IP sat down with Chuanhong Long, president of CCPIT Patent and Trademark Law Office, to discuss the latest crucial developments in China's IP landscape, this time analysing China's evolving approach to IP infringement litigation

MIP: How has China's approach to IP infringement litigation evolved in recent years?

CCPIT: In the past, China was frequently perceived as a hotspot for IP infringements, but recently, China has taken extensive steps to improve IP protection and enforcement. These steps include:

A comprehensive upgrade of China's IP laws, including the Trademark Law, Anti-Unfair Competition Law (Trade Secrets), Patent Law, Copyright Law, and Seed Law. These amendments have not only increased the statutory compensation cap to 5 million RMB (about $700,000 USD) but also introduced punitive damages up to five times the initial compensation. In addition, the reforms have eased the burden of proof on the plaintiffs by redistributing proof obligations, showing a clear move towards enhancing enforcement of IP rights;
The introduction and revision of numerous judicial interpretations related to the trial of IP infringement disputes. China has published a wide array of guiding and typical cases, which provide practical guidance for courts at all levels as well as practitioners. This transparency in judicial direction demonstrates an effort to eliminate uncertainties and build trust in China's evolving IP system;

A significant expansion of China's dedicated IP courts and IP tribunals, which includes the establishment of four specialised IP courts and 27 IP tribunals. These institutions exclusively handle technology-related IP disputes. Since 2019, all appeals in technical cases have been centrally handled by the IP court of the Supreme People's Court, providing greater consistency in judicial standards and measurements; and
The marked growth in the number of IP agencies and practitioners within China, contributing to a higher quality of service for clients. This infrastructure development demonstrates China's commitment to cultivating an IP-friendly environment, with the intent of fostering innovation and growth.

These ongoing reforms in China's IP laws and practices reflect a commitment to a robust IP system that is in alignment with international standards and principles.

MIP: What practical advice would you give to clients who want to secure high damages in infringement cases?

CCPIT: The following strategies may be considered:

Select the most suitable jurisdiction: generally, IP courts or tribunals in economically developed provinces have more experience and tend to support higher compensation claims;

Collect evidence of compensation from multiple perspectives and corroborate the compensation amounts calculated using different methods:
Public annual reports or competitors' disclosed operating profits can be used to estimate the profits of infringing products;
Consider utilising data from third-party institutions for reasonable estimates; and

Evidence of sales can be collected and notarised from sources such as the infringer's website or conversations with their sales staff.
Provide evidence to demonstrate the degree to which the patent contributed to the infringement profits, ensuring the court will use a high contribution factor when calculating compensation;

Consider the number of patents and other IPs being used and allocate compensation claims reasonably across different lawsuits;
Actively apply for court orders to request the court's assistance in obtaining relevant infringement data. This could involve data from administrative departments such as customs, or requiring the defendant to provide relevant data. If the defendant refuses, they may be accused of obstructing proof, and the court may support the plaintiff's preliminary compensation evidence.

Effectively combining these strategies can help secure higher compensation. However, each case has its own characteristics and requires tailored strategies to ensure the attainment of high compensation.

MIP: How could the Chinese patent litigation process be improved?

CCPIT: While China has made remarkable achievements in the protection of IP rights and demonstrating a commitment to establishing a robust legal framework and enforcement mechanisms, there remain areas for further improvement:

Further utilising the technical investigator system and the established national technical investigator pool could aid judges from different areas in fully and accurately understanding technical facts;

The burden of proof on plaintiffs in technical cases could be further eased, potentially through the introduction of a limited form of a discovery process. This would promote fairness and transparency in civil litigation by allowing litigants to request certain necessary documents from their opponents; and

Enforcement of court judgments could be further strengthened.