The supreme people's court has recently made public its opinion on " increased sanctions for intellectual property violations (a draft opinion). According to the consultation draft, suspended sentences are generally not applicable in cases where the registered trademarks of goods, such as emergency relief and vaccination materials, are mainly used to violate intellectual property rights, as well as in cases of violation of commercial secrets by institutions, organizations and persons outside the country。
It was mentioned that, since the eighteenth anniversary, intellectual property protection has received unprecedented attention, and that issues such as the high incidence of intellectual property violations and the difficulties of rights holders have been further addressed, although some issues remain prominent. In order to strengthen sanctions for intellectual property rights violations, to effectively deter intellectual property rights violations and to promote a sound rule of law environment that does not allow for abuses, the following observations are made in relation to intellectual property law。
The first is to strengthen the application of protective measures。
• the people's court shall, in accordance with the law, increase the protection of acts against or imminent infringement of intellectual property rights involving the core technology, well-known brands, heat programmes, etc., as well as against intellectual property rights at exhibitions。
- the people's courts may review the intellectual property rights rights holders in accordance with the law if they simultaneously apply for the cessation of the infringement and the preservation of their actions。
- in cases of property preservation measures subject to renewal, an application shall be submitted to the people's court, which is hearing an intellectual property dispute。
— in cases where the intellectual property rights holder has prima facie evidence of an infringement of the intellectual property right and the evidence is likely to be lost or difficult to obtain, the people's court shall promptly review the application for preservation of the evidence and take protective measures in accordance with the law. Evidence preservation, which involves more specialized technical issues, may involve technical investigators or technical experts in related fields。
- the people's court may presume that the rights holder's claim in respect of the probative matter of the evidence is established if the person against whom the violation was brought has vandalized or transferred the product of the alleged infringement for which protective measures have been taken, so that the facts of the violation cannot be ascertained. In cases of obstruction of proceedings provided for by law, coercive measures are taken in accordance with the law。
The second is that the violation must be brought to an end in accordance with the law。
— in the case of infringement of intellectual property rights, such as the manufacture and sale of tort products, the people's court shall generally rule on the cessation of infringement in accordance with the law. Alternative measures such as economic compensation should be taken in cases where violations are not ordered by law, such as public health, protection of environmental resources, etc。
— in cases where the facts of the violation are clear and the violation can be established, the people's court may decide to stop the violation and stop the violation promptly。
• in the case of counterfeit, pirated goods and materials and instruments used primarily for the production or manufacture of counterfeit, pirated goods, the people's court shall, except in exceptional circumstances, support the right-holder in the civil proceedings by proving their existence and requesting their immediate destruction. In exceptional cases, materials and tools used primarily for the production or manufacture of counterfeit, pirated goods may be disposed of outside commercial channels. The people's court does not support a request for compensation by the offender。
— in the case of an effective decision that has already been implemented, the infringer may again apply for enforcement on the basis of the decision to cease the violation of the same intellectual property in the same manner as the infringer; in the case of a separate action by the right holder in accordance with the law, the people's court shall hear it promptly。
Thirdly, compensation is increased by law。
• full application of the system of evidentiary impediments, investigative evidence, preservation of evidence, professional evaluation, leading to the active, comprehensive, correct and honest production of evidence, increasing the scientific and reasonable calculation of damages and adequately compensating the owner of intellectual property rights。
- proactive use of business and industry tax authorities, third-party business platforms, infringers' websites or companies' legal disclosure of relevant data shown in documents, as well as industry average profit margins, to determine tort gains。
— the people's court orders the person against whom the violation has been committed to provide evidence of the benefit of the violation in his possession, which he refuses to provide without justification, and may determine the amount of compensation based on the claims of the intellectual property owner and the evidence in the case。
— correctly grasping the criteria for determining punitive damages, legally supporting claims for punitive damages by intellectual property rights holders, and maximizing the deterrent effect of punitive damages on violations。
• reasonable determination of the amount of legal compensation, taking into account such factors as the type of intellectual property requested for protection, the high level of innovation and market value, subjective fault of the infringer, the nature and extent of the violation and the severity of the consequences of the damage. Infringements are committed intentionally and in serious circumstances in order to close or reach a maximum amount of statutory compensation。
— a violation of intellectual property may be considered to be “serious” if it has been committed repeatedly, mainly on the basis of a violation, for a long period of time, in the context of a wide regional scope of the violation, in the amount of profits made by the violator, in the case of a violation which has caused significant economic loss to the intellectual property owner, and in the case of a violation which may endanger personal security or cause serious harm to the public interest。
- the people's court may review the claims of intellectual property rights holders in follow-up proceedings for the inclusion of additional reasonable expenses incurred to prevent violations in the amount of compensation。
— taking into account the subjective intent of the infringer, as well as the complexity of the case, the professionalism and intensity of the work, the amount actually paid, the practice of the profession, the price of guidance from the local government, etc., and based on the evidence provided by the intellectual property owner, it is reasonable to determine the cost of counsel for which the right holder has requested compensation。
