China National Intellectual Property Administration: Reply to the proposal to increase the upper limit of punishment for intellectual property infringement to 20 times

2023-09-11
Recently, the China National Intellectual Property Administration issued a letter of reply to the proposal No. 6575 of the first session of the 14th National People's Congress. Regarding the proposal to increase the upper limit of punishment for intellectual property infringement to 20 times. The response from the State Intellectual Property Office mentioned that currently, China has comprehensively established a punitive compensation system from the legislative and judicial rules levels. In the next step, to strengthen the crackdown on trademark infringement, the "Revised Draft of the Trademark Law (Draft for Soliciting Opinions)" proposes to optimize the calculation method of trademark infringement compensation amount, list the reasonable expenses of the right holder as the compensation content for trademark infringement, and modify the conditions for applying punitive compensation from "malicious" to "intentional", Introduce trademark infringement public interest litigation, crack down on trademark infringement behaviors that harm national or social public interests, strengthen infringement law enforcement methods and measures, and strengthen credit supervision and punishment.

Letter of the China National Intellectual Property Administration on the Reply to Recommendation No. 6575 of the First Session of the 14th National People's Congress


Representative of Chen Zhilie:


We have received your suggestion to increase the maximum punishment limit for intellectual property infringement to 20 times. Based on the opinions of the National Development and Reform Commission, the response is as follows:


1、 On the Punitive Compensation System for Intellectual Property in China


Punitive compensation for intellectual property refers to the compensation amount for intentional infringement of intellectual property and serious circumstances, which is much higher than the compensation amount for actual losses. This system is currently established in countries and regions such as the United States, the United Kingdom, the European Union, and South Korea, and the upper limit of punitive damages is usually three times the general compensation amount. In 2013, the third revision of China's Trademark Law established punitive compensation rules for the first time in the field of intellectual property. The fourth amendment to the Trademark Law in 2019 increased the calculation multiple of infringement compensation for malicious infringement of trademark exclusive rights from one to three times or less to one to five times or less, and increased the upper limit of legal compensation from three million yuan to five million yuan. From 2019 to 2020, the Anti Unfair Competition Law, Patent Law, and Copyright Law were successively revised, establishing punitive compensation rules for intentional infringement of intellectual property rights consistent with the Trademark Law; The Civil Code officially establishes the basis for the application of punitive damages for infringement of intellectual property rights. In March 2021, the Supreme People's Court issued the "Interpretation on the Application of Punitive Compensation in the Trial of Civil Cases of Infringement of Intellectual Property Rights", clarifying the specific application situations and standards of punitive compensation, and issuing guidance cases to provide guidance for courts at all levels in various regions to use this system. At present, China has comprehensively established a punitive compensation system at the level of legislation and judicial rules. In the next step, in order to strengthen the crackdown on trademark infringement, the Revised Draft of the Trademark Law (Draft for Soliciting Opinions) proposes to optimize the calculation method of trademark infringement compensation, list the reasonable expenses of the right holder as the compensation content for trademark infringement, and modify the conditions for applying punitive compensation from "malicious" to "intentional", Introduce trademark infringement public interest litigation, crack down on trademark infringement behaviors that harm national or social public interests, strengthen infringement law enforcement methods and measures, and strengthen credit supervision and punishment.



2、 On the Construction of Credit System in the Field of Intellectual Property



In order to standardize and improve the system of dishonesty constraints, in December 2020, the General Office of the State Council issued the "Guiding Opinions on Further Improving the System of dishonesty Constraints and Building a Long term Mechanism for Integrity Construction" (Guo Ban Fa [2020] No. 49). On this basis, the National Development and Reform Commission compiled the "National Public Credit Information Basic Catalogue (2022 Edition)" and the "National List of Basic Measures for Punishing dishonesty (2022 Edition)", Include the list of serious violations and dishonesty in the field of intellectual property in the management of the list, providing support and protection for implementing dishonesty punishment and cracking down on intellectual property infringement in accordance with the law and regulations.



On January 25, 2022, the Regulations of the China National Intellectual Property Administration on the Administration of Intellectual Property Credit was issued and implemented, which regulated the dishonest behavior in the process of intellectual property review and hearing, listed abnormal patent applications, malicious trademark registration applications and the provision of false materials not for the purpose of protecting innovation as dishonest behavior, and notified and publicized the information of dishonest subjects, In accordance with the law and regulations, we also carried out management measures such as "strict approval of financial fund project applications" and "cancellation of the qualification of the China National Intellectual Property Administration to participate in the evaluation first".



On September 1, 2021, our bureau cooperated with the State Administration of Market Regulation to formulate and issue the "Management Measures for the List of Serious Violations and Disruptions of Market Supervision and Management", which listed "intentional infringement of intellectual property rights" and those who were subject to severe administrative penalties as serious violations and dishonesty. The information of serious violations and dishonesty subjects was publicly displayed on the National Enterprise Credit Information Publicity System, And implement management measures such as "paying special attention to engineering bidding", "being listed as a key regulatory object", and "not applying the notification and commitment system" for dishonest entities.



Regarding your suggestion to increase the cost of intellectual property infringement and strengthen credit supervision in the field of intellectual property, our bureau will carefully study and promote the punitive compensation system and credit supervision to play a greater role in stimulating and protecting innovation in the process of amending the law, based on the opinions of all parties. We will continuously strengthen trademark protection, improve the legal system of intellectual property, and help create a good business environment.


Sincerely thank you for your concern and support in intellectual property work. We hope to continue to pay attention to the development of the intellectual property industry and provide more valuable opinions and suggestions for our work.


China National Intellectual Property Administration



August 21, 2023
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