When people think of patent disputes in China, they often imagine high-volume litigation, with thousands of cases filed each year. What many companies do not realise, however, is that the risk profile has changed dramatically. Punitive damages, which go beyond compensating for actual loss and are aimed at punishing intentional or malicious infringement, are now being applied by Chinese courts with growing frequency. This development has caught many businesses off guard, particularly foreign companies entering the Chinese market under the assumption that damages would remain relatively low.
The shift in litigation
In 2024 alone, Chinese courts applied punitive damages in 460 cases of severe infringement, marking a 44.2% increase from 2023. The awards have also grown dramatically, with cases involving trade secrets and software seeing damages as high as 640 million yuan. Across provinces like Beijing, Jiangsu, Guangdong, and Shanghai, courts are not just granting higher damages but also consistently applying them to protect rights holders.
Why this matters?
Many international businesses operating in or with China may not be aware that their exposure in patent disputes now includes punitive damages. What was once seen as a jurisdiction with "low damages" is quickly shifting into one where infringement can come with very costly consequences.
The bottom line
Punitive damages are no longer theoretical in China, they are real, growing, and actively shaping patent litigation strategy. Companies investing in China should take note, as the risks (and rewards for patentees) are higher than ever.
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