China: Chinese Legal Developments: Counting the Cash

Last Updated: 7 November 2016
Article by Guoxu Yang

The Chinese government has realised the importance of the patent system in promoting the innovation of technologies and has taken certain measures and steps to enhance the protection of patent rights. The following are some trends and developments on patent protection in China in 2015.

Chinese entities and individuals are actively enforcing patent rights

According to the "White Paper on Judicial Protection of Intellectual Property Rights in 2015" released by the Supreme People's Court, the number of patent infringement civil cases of first instance reached 11,607, with a 20% increase over the number in 2014. Among those cases, 'foreign-related' disputes remain remarkably few since the number of all foreign-related civil IP cases decided at first instance in 2015 is just 1,327, a decrease of 22.6% compared with the 2014 number.

In contrast, most of the patent infringement cases are between Chinese individuals and entities. The Chinese companies mentioned in the white paper include companies invested in by foreigners, such as the Chinese subsidiary of a foreign company. In 2015, we did see more and more native Chinese companies start to enforce their patent rights. For example, Chinese internet company Sogou sued Baidu for patent infringement based on 17 patents and claimed damages of up to $40 million in total.

Some standard-essential patent (SEP) owners enforce their patents in Shanghai, Beijing, and Guangzhou. These include a Chinese company based in Xi'an, Shanxi Province, which holds SEP patents on WAPI technology. It sued Sony Mobile (China) and other companies. In addition, a Chinese company named Qihu sued competitors based upon three design patents.

Chinese patent law and protection mechanisms are improving

From a legislative aspect, China is amending its Patent Law for the fourth time. In the proposed amendments, the protection of patent rights is enhanced. For example, punitive damages will be available if the infringement is found to be wilful and the statutory damages will be increased to RMB 5 million ($752,000), according to the draft. In addition, the administrative protection of patent rights is also to be enhanced by increasing the power of local IP offices.

The Supreme Court issued new interpretations on judgments on patent infringement following the interpretations issued in 2009, which have been effective from April 1, 2016. In the new interpretations, issues such as claim construction, functional limitation, indirect infringement, SEP enforcement and determining royalties for fair, reasonable and non-discriminatory licensing, injunctions and calculation of damages, effect of an invalidation decision on infringement proceedings and judgments on design infringement are regulated.

As the Supreme Court interpretations are binding on all Chinese courts, they provide rules for rights owners and the courts in litigating patent infringement, and also help patent applicants to draft and prosecute patent applications to ensure safety and predictability of patent enforcement.

From a judicial aspect, IP courts were established in Beijing, Shanghai and Guangzhou by the end of 2014. The IP courts have exclusive jurisdiction over patent cases within the relevant areas. Until now, the goal for setting up the IP courts has been reached. Since the IP courts attracted a large number of patent cases and the judges were limited, they produced a certain backlog of cases.

But the situation is changing for the better: new judges are joining in and the way to try a case is also improving. The introduction of judge assistants, who are technical investigation officers helping the judges try patent cases, especially complicated patent cases, increase efficiency.

China is a statutory law country. The courts try cases merely according to the laws, regulations and Supreme Court interpretations. However, Chinese courts are trying to take advantage of the case law system. For example, the Supreme Court established the Typical Case Guidance Research (Beijing) Center in April 2015 trying to setup a case guiding system by prior cases having directive significance. The test has been first started from Beijing IP Court and may expand to the whole country in the future.

Each year, the Supreme Court publishes ten IP cases that have had an impact in the country and 50 typical IP cases with a certain guidance value. Local courts at the provincial level also publish typical IP cases that have a certain impact within that area. For example, in 2015, 140 typical IP cases were published by the high courts in some provinces and municipalities.

Higher damages could be expected

In patent infringement cases tried in the past, the damages awarded by the courts were not very high. According to the statistics made by sample survey of certain number of court cases in China two years ago, the average amount of damages awards by Chinese courts was only about RMB 80,000 for patent infringement cases. The damages awarded by the courts are too low to cover the expenses for stopping the infringement, let alone the economic loss of the rights owner. The situation frustrates the enthusiasm of patent owners for enforcing their patent rights, and has to be changed.

The Chinese legislative body is amending the Patent Law and the Supreme Court has issued interpretations on the determination of damages and allocation of burden of proof. According to the interpretations, if the rights owner has provided initial evidence regarding the benefit obtained by the infringer, but the accounting books and the materials relating to the infringing acts are mainly under the control of the infringers, the court may order the infringer to surrender the accounting books and materials.

Where the infringer refuses to surrender without cogent reason or delivers up forged accounting books or materials, the court may determine the benefit obtained by the infringer as a result of the infringement by reference to the rights owner's claim and the evidence as submitted. In addition, if the rights owner and the infringer had reached an agreement on the amount of damages due to patent infringement or the manner of calculating the damages based on the laws, the court should support it if the rights owner claims to determine the amount of damages based on the agreement in a patent infringement litigation.

With the enhancement of the laws, regulations and interpretations on the damages and also with the effort of patent owners to collect evidence of damages positively, higher damage compensations in patent infringement cases could be expected in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.