China’s Supreme Court strengthens IP protection with punitive measures

Over 12,000 tech-related IP cases were heard in the first half of this year, up by 33.4%. Punitive damages were applied in 139 cases to protect IP owners, with a record high of 20 million yuan ($2.78 million) awarded.

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China’s Supreme People’s Court has unveiled more stringent measures to uphold intellectual property (IP) rights, foster technological innovation, and ensure equitable competition. Official court data revealed that during the initial half of the present year, over 12,000 IP cases linked to technology were adjudicated throughout the nation’s judicial system, reflecting a 33.4% surge from the prior year.

To deter IP infringements, courts resorted to punitive damages in 139 instances, with the intent of amplifying the cost of violations and safeguarding IP holders. Notably, the most substantial punitive damages granted reached a value of 20 million yuan ($2.78 million). The incorporation of punitive damages for IP breaches was integrated into China’s Civil Code, which became operational in January 2021.

Additionally, the courts observed a general upswing in case hearings, spanning domestic conflicts and contractual disputes related to the aftermath of the COVID-19 pandemic.

Why does this matter?

IP rights are crucial for fostering innovation and economic growth. By taking stronger actions against IP violations, the court supports a more conducive environment for creators, inventors, and businesses to invest in research and development, knowing that their intellectual property will be safeguarded. In addition, the use of punitive damages sends a clear message that IP infringement will come at a substantial cost. This acts as a deterrent to potential violators, encouraging them to respect others’ IP and adhere to fair competition practices. Ultimately, the measures taken by the court are aligned with China’s aspirations to be seen as a hub for innovation, attracting investment and talent, and contributing to the global technological landscape.