New Chinese Intellectual Property Policy

China announced Pro-Patenting policy and the policy was made public on Feb 2021.
The policy would be most-advanced approach as the East Asian high-tech country.

Five times counter as the punitive damage award

In the new policy, punitive damage award is an eye-catching policy in new Chinese Patent Protection.
The punitive damage award is not so popular in Asian Countries since the roots of this legal theory came under the rule of the common law in UK.

However, several East Asian high-tech countries adopted the triple count damage rewards in their IP litigation processes such as South Korea and Taiwan.
The United States also admitted the punitive damage reward until three times under the willful infringement cases.

The IP litigations are sometimes heavy competition among companies.
The courts decide huge amount of damage rewards to defendants as the outcome of the social change trials.
Thus, that is not uncommon that court decisions are very huge, and the punitive damage theory makes more financial remedy for litigation winner.

China admits the Five times counter as the punitive damage reward to plaintiffs (Unfair Competition Law, the 17.3 article).
The law says, “if defendant is willful infringer and serious offence by using tread secrets, the damage award can be increased until the five times. The damage award should be included attorney fees as well.”

The political pressures by US & EU

The argument by the United States and Europe caused pressure for China to increase damages awards.
On Feb 26th, 2021, the Chinese IP Supreme Court have ordered 26 M USD damages to defendant in the tread secret litigation.
This amount is national record as the Chinese Damages Awards.

The Unfair Competition and Tread Secret issues are now risky behavior in China.
In the same month, Tiktok sued Tencent before the Beijing IP Court under the Antitrust Law.
Tiktok has filed 15 M USD damages against Tencent.

In the new policy, damage award tends to be more expensive direction as new Chinese Patent Protection.

Rocket Docket in Chinese Legal Process

2 years and half ago, Chinese IP Supreme Court had started and reported their 2 years case summaries.
For 2 years, IP Supreme Court received 5,121 cases and made 4,200 decisions (82%).
In 2020, IP Supreme Court made 2,787 of 4,200 decisions and have increased in each of the past 2.5 years.
In 4,200 case, the withdraw rate was 36% and most cases were reached to the final trial.

The higher court turned over the lower court decision in 339 cases (19%).
Thus, 80% decisions in the lower courts were favored by the higher court.

In the view angle of the streamlined legal process, one Chinese judge took 82.5 cases in 2020 and their average hearing period in IP field was 123 days.
Chinese hearing became quickly and their original legal process of IP has two-tiered court system, not three.

Totally, Chinese IP litigations are so quickly, and people started to call “Rocket Docket”.
We called “Rocket Docket” for the Eastern district – Texas that now Chinese Courts try to be.

Chinese IP new policy caused pressure by Western Countries but now the policy may create new frontiers in IP field.

One Stop Asian IPs
Masuvalley and Partners