Punitive Damages for Intellectual Property Rights Infringement in China

Promoting punitive damages in China for intellectual property rights infringements mainly lies in the expectation of raising infringement costs as a deterrence measure and making up the weak points of the current modalities of remedies. After years of developments, China’s laws have established a preliminarily four-pillar system for punitive damages in intellectual property (IP) disputes, supported by the Civil Code of China, IP laws, the Supreme People’s Court of China’s judicial interpretation, and specific cases. The four-pillar system is still in its initial stage, showing notable contradictions, harsh legislation, and uncertainty in operation. This article provides an overview and critical assessment of China’s IP punitive damages framework and characteristics, which reveals several concerns, including its obstacles in implementation and a lack of attention to the legitimate interests of other parties. This chapter thus proposes that punitive damages, as a quasi-criminal sanction, as well as its scope of application must be much further narrowed and clarified by establishing adequately clear definitions and restraints concerning every aspect. The subsequent institutional designs should better fulfil the social benefits of IP punitive damages as a tool to prevent infringement, rather than being a mere punishment per se.