A criminal raid can interrupt the supply of counterfeit goods, identify participants and secure evidence that a brand owner could not readily obtain alone. Recovering civil damages requires a further, deliberate process: selecting the responsible defendants, establishing a route to a civil hearing, proving the amount claimed and identifying assets against which an award can be enforced. China's new framework for civil disputes involving criminal offenses makes that process clearer and should change how brands prepare enforcement cases from the outset.

On September 21, 2026, the Supreme People's Court (SPC) published its Provisions on Several Issues Concerning the Trial of Civil Disputes Involving Criminal Offenses, Fa Shi [2026] No. 19, effective September 22, 2026 (the Provisions). This article examines their implications for trademark counterfeiting and assistance in infringement. For brand owners, the practical priority is to incorporate civil recovery into the criminal evidence plan, rather than begin the damages exercise only after conviction. The analysis below addresses procedural timing, criminal evidence, inventory, profits, shared liability and recovery.^[1]

References to the Trademark Law are to its 2019 amended text unless expressly discussing the revised law effective January 1, 2027. The current punitive damages interpretation is Fa Shi [2026] No. 7. Public cases are identified by source; numerical examples are hypothetical and are neither client matters nor predictions of awards. English titles of Chinese instruments are descriptive translations.^[2][3][4]

1 What the new framework changes

Compensation alongside criminal punishment is an existing substantive entitlement. Article 67 of the Trademark Law expressly provides for compensation as well as criminal liability for specified trademark offenses. Article 187 of the Civil Code confirms that administrative or criminal responsibility does not displace civil liability. The new Provisions principally address how that entitlement can be pursued across different proceedings.^[2][5]

Earlier rules were dispersed across economic disputes, private lending and general procedural instruments. The Provisions consolidate rules on acceptance of civil actions, separate proceedings, stays, evidence and enforcement. They therefore give claimants more specific grounds on which to make procedural applications. The SPC's accompanying explanation also acknowledges that some disputed issues remain open for further development. Describing the reform as an unconditional abolition of criminal proceedings taking priority would overstate it.^[1][6]

The resulting inquiry is more concrete than whether a dispute is merely connected with a crime. What obligation does the civil defendant owe? Can the essential facts be determined independently? Has another proceeding already disposed of the relief now sought? A complaint that answers those questions is more useful than a criminal judgment submitted without a corresponding civil analysis.

2 Match the civil route to the procedural stage

Claims against parties other than the criminal defendant

Article 3(2) addresses conduct by a legal representative, person in charge or employee in the course of their duties, followed by a compensation claim against a legal person or unincorporated organization not criminally implicated. Article 3(4) addresses claims against other debtors where some debtors are criminally implicated. Article 3 expressly uses a shorthand that includes both suspected and established criminal conduct; a conviction is not required for every reference to that conduct.^[1]

In a trademark dispute, prosecution of an individual employee and a claim against the operating entity may engage Article 3 and the employer liability rule in Article 1191 of the Civil Code. Evidence of employment or management, business accounts, order handling, warehouse use and the destination of revenue should explain whether the employee acted in performing work duties. If the entity itself organized the business, its own participation should also be established. Its absence from the criminal indictment is not proof of every civil element. Conversely, a claimant should not be required to obtain an invented certificate establishing that the entity is free of criminal responsibility before filing.^[5]

Claims against other assisting infringers require the same discipline: identify their participation and the harm for which responsibility is asserted. Adding a defendant should reflect an evidenced liability case. Adding a nominal party simply to avoid analysis of the same facts undermines that case.

Suing the same person while criminal proceedings remain pending

This is a central difficulty. Article 2 defines the same facts by reference to the same parties and basic facts; Articles 3 and 4 directly address related but distinct facts. A claim against the same person arising from the same facts cannot therefore rely on Article 3 alone. Equally, Article 3's failure to cover a particular claim is not itself an express prohibition on accepting it.

Acceptance concerns whether the claim may enter the civil process; a stay concerns whether an accepted case can proceed. A perceived need to await a criminal outcome does not, by itself, supply a legal ground for refusing acceptance. Nor does acceptance establish that no stay is required. Different heads or amounts of damages do not necessarily turn the same parties and basic facts into distinct facts under Article 2. The comparison should examine the conduct, period and responsible persons, not simply the labels attached to the proceedings.^[1][7]

In our view, a claim with an independent trademark basis requires separate examination of the ordinary filing requirements and the need to await the criminal outcome.

First, establish standing, an identified defendant, specific relief, supporting facts and reasons, and jurisdiction under Articles 60 and 67 of the Trademark Law and Articles 122 and 126 of the Civil Procedure Law. Second, consider Article 127 of the Civil Procedure Law: is there a legal rule assigning the dispute to another authority, or an effective judgment, ruling or mediation statement creating a procedural obstacle? Explain how the trademark damages claim relates to matters already dealt with in the criminal process. The existence of a criminal connection is not itself such a special rule. Third, for an accepted civil action, identify whether an essential finding necessarily depends on an unfinished case within Article 153(5) of the Civil Procedure Law. This is an interpretive position supported by the statutory framework, not an unconditional parallel-proceedings guarantee for every same-facts case.^[2][7]

The SPC's ruling in (2023) Zui Gao Fa Zhi Min Zhong No. 2865 illustrates the method. The first-instance court had dismissed a software copyright action because the parties and facts overlapped with a criminal investigation. The SPC examined the registration, accused software, earlier adjudications and infringement comparison, found that civil adjudication did not require the criminal outcome, and directed the case to be heard. The case supports substantive scrutiny of independent evidence and filing conditions; as a software ruling predating the new Provisions, it does not decide every subsequent trademark case.^[8]

The complaint should identify the evidence supporting ownership, the trademark comparison, the defendant's business and verified transactions. It should then explain whether unresolved criminal inquiries concern other brands or participants, or facts indispensable to this civil claim. If a distinct part is ready for determination, Article 156 of the Civil Procedure Law may support an application for an advance judgment on that part, subject to the court's assessment of separability. A refusal to accept or dismissal of an action may be appealed under the applicable rules; a stay calls for an application to resume proceedings once its particular grounds cease. Those remedies should not be conflated.^[7]

After conviction or termination of criminal pursuit

Once the criminal judgment takes effect, a stay based on the need to await that judgment will ordinarily have lost that basis. The brand owner should submit the judgment's effective status and relevant performance records, request resumption, or pursue trademark harm not previously determined. The important comparison is between the criminal disposition, compensation arrangements and actual payments. A fine or confiscation of proceeds is different from adjudication and satisfaction of the rights holder's damages claim.

Article 15 provides a direct acceptance rule where authorities decline to open a case, withdraw it or decline prosecution, or where an effective adjudication acquits the defendant or finds no criminal responsibility. It also addresses corresponding partial facts. Failure to meet a criminal threshold leaves civil infringement to be examined on its own elements. An affirmative criminal finding that the alleged conduct did not occur, however, must be addressed substantively; invoking a different proof standard is insufficient.^[1]

At every stage, review limitation, earlier civil adjudications and settlements. Articles 188 and 195 of the Civil Code govern relevant limitation and interruption questions. Preserve records of rights being asserted. A continuing criminal investigation is not a substitute for separately managing the deadline for each civil claim.^[5]

3 Reorganize the criminal file around the civil elements

Articles 6 to 8 create three routes. Facts established by an effective criminal adjudication can be relied on without repeated proof, subject to sufficient contrary evidence. Material not used as a basis for the criminal decision and not excluded as illegally obtained evidence can be submitted for examination and challenge in the civil case. Facts not established because they fell below the criminal standard may be proved to the civil standard. These categories should remain distinct in the evidence submission.^[1]

The exemption from repeated proof is rebuttable, but reversing a criminal finding has procedural safeguards. Under Article 6(2) and (3), where contrary evidence is sufficient to overturn facts on which conviction or sentencing was based, the civil court must promptly notify the criminal court in writing. If that court maintains that its decision is correct, the matter must be referred to their common higher court. The SPC explanatory Q&A emphasizes that the civil court may not simply issue a conflicting judgment. Supplementing transactions the criminal judgment did not evaluate is different from contradicting facts on which conviction or sentence rested.^[1][6]

Start by mapping each claim to a specific finding or record. A finding that the defendant knowingly dispatched counterfeits supports knowledge and assistance. A finding of brand-specific transactions supports scale for the corresponding period. Allegations and witness accounts merely recited in a judgment require further examination to determine whether the court adopted them. Multi-brand totals need allocation; quantities transferred between locations need reconciliation to avoid duplication.

Next, reconstruct transactions excluded from the criminal amount through verifiable records. Orders identify goods, brands and buyers; payments explain revenue; logistics records support delivery; cancellations and refunds correct transaction status. Where an account holder differs from the defendant, establish control, settlement and the operating relationship. Statements about production capacity or daily dispatch are useful investigative leads and evidence of scale. Using them to quantify damages requires support for operating days, interruptions, the brand mix and realized sales.

Article 8 is particularly relevant where a period of trading was excluded for insufficient criminal proof, but orders, payments and deliveries reinforce one another in civil proceedings. Explain why the criminal case did not establish the fact and how the civil evidence now supports it. The standards differ, but certain civil facts, including fraud, coercion and malicious collusion, remain subject to the special requirements in Article 86 of the civil evidence provisions.^[9]

Preserve what the civil case will need before destruction

Article 27 of the 2025 criminal IP interpretation expressly permits, on the rights holder's application, destruction after a related civil or administrative case concludes, or after sampling, photography or other evidence preservation. Brands should use that opportunity to preserve sufficient evidence of the mark, model, packaging, stage of completion and batch, matched to the seizure inventory.^[10]

A general photograph of a warehouse may be insufficient where finished footwear or apparel, components and labels are seized together. Separate counts, product-level mark images, carton and batch references, warehouse records and extraction documentation are more useful. Electronic records should retain original files, field definitions and extraction information. Articles 44 and 93 of the civil evidence provisions address the completeness of extracts and authenticity of electronic data; those requirements are best addressed when evidence is collected.^[9]

4 Give inventory an evidenced role in the damages claim

Inventory disputes concern at least three questions: the infringing act, transaction status and valuation. A manufacturer's unauthorized use of the same registered mark on identical goods can be assessed under Article 57 of the Trademark Law; intentional warehousing or transport assistance has a separate basis. A defense that goods remained unsold should be examined to determine whether it disputes liability, sales volume or the monetary claim. The claimant should answer each issue at the correct level.^[2]

First, establish whether apparent inventory includes goods already sold but awaiting delivery, held for a customer, or scheduled for dispatch. Physical presence in a warehouse does not necessarily mean no sale occurred, but an order does not necessarily establish a completed sale either. Payments, performance, cancellations and refunds determine the appropriate classification. Verified sales can enter the corresponding calculation; genuinely unsold stock requires a different evidential route.

Second, use that stock to establish the business's actual scale. Replenishment, organized storage, size-based packaging, sorting by brand, matching orders and turnover records can demonstrate continuity and commercial organization, supporting a reasoned statutory damages assessment. If the claimant can establish lost customer orders, disruption of a specific channel or forced price reductions, prove each loss and its causal relationship with the infringement. A generic assertion of reputational damage is not a substitute for an evidenced amount.

Third, investigate the historical business behind the stock. A seizure is a snapshot of operations on a particular date. It can support an application for warehouse receipts, dispatch and stocktaking data, reconciled against sales accounts and courier settlements. The purpose is to establish actual trading, not to assume that inventory multiplied by a chosen turnover rate equals historical sales. Any estimate needs evidence for its period, turnover and brand composition, with a reasoned account of uncertainty.

The publicly reported counterfeit trademark case involving Lu Moufa and others records separate seizures of 25,730 counterfeit products and 72,550 tags and labels. The published case addresses the identity of marks, not a civil inventory damages formula. For civil evidence planning, the relevant lesson is to keep units separate: several labels attached to one product are not several products.^[11]

Inventory can materially support damages when its role matches the chosen legal method.

Where all goods were intercepted before distribution and neither sales nor other specific loss can be established, develop the infringement circumstances and reasonable expenses supporting the applicable statutory approach. Where sales and profit evidence exists, use the established portion and explain the unresolved portion. The presence of inventory should not cause the entire quantity analysis to be abandoned.

5 Build a civil valuation from the criminal figures

Article 28 of the 2025 criminal IP interpretation defines the illegal business amount by reference to the value of products manufactured, stored, transported or sold. Sales amount concerns revenue received and receivable from sales; illegal proceeds use specified cost deductions. Those measures support conviction and sentencing. Under Article 63 of the Trademark Law, the civil claim must explain its basis in actual loss, infringement profits, royalties or statutory damages.^[2][10]

The current Article 63 retains a sequence: actual loss first, infringement profits where actual loss is difficult to establish, and royalties or statutory damages where their respective legal conditions are met. A profits-based pleading should explain why actual loss is difficult to determine; it should not anticipate the parallel loss-and-profits wording taking effect in 2027. Profit is also distinct from revenue. Multiplying a price by a margin can produce a reliable unit profit only if the price and margin use compatible accounting and commercial bases.^[2][3]

Match the calculation to the profit evidence

Articles 14 and 15 of the trademark civil interpretation provide methods connecting sales quantities with unit profits for infringement profits and the rights holder's loss. The rules also address use of the registered trademark goods' unit profit where the infringing goods' unit profit cannot be established. The evidential task is to explain whose profit is used and which product, period and channel it represents.^[12]

Brands should provide, where available, actual transaction prices, cost composition and business data for the relevant or comparable products, explaining the relationships between the registered owner, selling entity and group reporting company. A consolidated margin can inform the analysis, but product mix, territory, taxes, discounts, wholesale or retail channels and accounting methodology need reconciliation. An audit supports the reliability of the financial statement; it does not automatically establish that every ratio in it measures loss on a particular product in China.

The trademark's contribution also requires a reasoned position. Where sales depend on impersonating the brand, sales representations, purchasing incentives and prominent counterfeit branding can support the importance of that factor. Where technology, design or other features contribute value, explain the relationship between the amount claimed and the trademark right in suit. A contribution adjustment is not a mandatory fixed deduction in every case, and an arbitrary 30% or 50% does not become reliable merely because it appears conservative. Infringement of both a word and device mark on one item must not duplicate the same transactional harm.

Test the claim through a complete calculation

Assume evidence establishes 800 historical sales of one brand generating RMB160,000 in revenue, and a separate 1,200 genuinely unsold items. If an evidenced unit profit of RMB60 is appropriate to the selected method, the 800 sales yield RMB48,000. The RMB60 must be supported; it is not a convenient assumption to insert into a real case. The 1,200 items separately support scale, or acquire a further role through evidence of transactions, performance or specific loss.

If accounts establish additional periods, incorporate that evidence. If RMB48,000 is only a verified portion of a demonstrably larger business, explain whether it represents an established minimum or the complete relevant base. A proven portion does not automatically equal the whole loss. Nor should statutory damages simply be added to profit-based damages for the same scope without an explanation preventing overlap. A clearer pleading identifies the principal calculation and alternative method, the conditions for each and the scope each covers, allowing the court to select the lawful approach within the claim.

Make document production requests specific

Article 63(2), Articles 45 to 48 of the civil evidence provisions and Article 10 of the 2026 punitive damages interpretation address production and consequences of non-production. Identify why the records exist and are controlled by the defendant, and specify the period, brand, platform, order data or accounting vouchers sought. Existing transactions and dispatch records can define the request.^[2][4][9]

This mechanism requires more than asking a defendant to prove it earned nothing. The claimant first identifies a verifiable category of records; the court examines the application and orders production where appropriate. If records are unjustifiably withheld or falsified, the claimant then seeks the applicable consequences using its submissions and the evidence already available. Trade secrets can be protected through non-public examination and other lawful arrangements; commercial sensitivity should not be treated as an automatic exemption from production.

6 Define the shared harm before asserting shared liability

Article 57(6) of the Trademark Law and Articles 1168 and 1169 of the Civil Code provide the substantive framework for intentional facilitation, joint infringement and assistance. Article 22 of the criminal interpretation identifies transport, warehousing, custody, courier services, accounts and payment settlement among forms of assistance in a joint crime. Criminal findings can support the civil elements, but the pleading should identify what infringement each person knew about, what assistance they provided and which transactions and harm it covered.^[2][5][10]

The published counterfeit trademark case involving Long and others describes participants procuring packaging, obtaining unbranded products, supplying a payment account, arranging premises and organizing packaging. The court found a joint crime and addressed the participants' respective roles in sentencing. The division of work did not require each person to perform every production and sales step. The scope of civil damages must still be determined under civil law rather than by converting criminal roles into percentages.^[11]

To assert joint and several liability, first establish the common harm. Repeated receipt, sorting, dispatch and returns handling for a counterfeit network can be supported by orders, operating records and settlements. Evidence of a single delivery, however, does not establish participation in every transaction at another warehouse or years earlier. A well-supported scope of common harm is the basis for meaningful coverage of the responsible participants.

Once joint and several liability is established, Article 178 of the Civil Code distinguishes liability to the claimant from internal allocation among liable persons. Receiving only a storage fee, or being a secondary offender in the criminal case, is not by itself a sufficient reason to cap external liability at that fee or a fixed percentage. Punitive claims against multiple defendants require further individualized analysis of intent and serious circumstances; shared compensatory liability should not obscure that additional inquiry.

7 Decide punitive damages strategy before the case is pleaded

Fa Shi [2026] No. 7, effective May 1, 2026, replaced the 2021 interpretation and operates alongside Article 1185 of the Civil Code and Article 63 of the Trademark Law. Article 14 preserves a temporal exception: it does not apply where an effective adjudication preceded commencement and retrial is subsequently sought or ordered.^[5] Its rules on the base, multiplier, fully enforced fines and timing belong in the initial litigation strategy.^[4]

First, organize intent and serious circumstances by defendant, period and conduct. Counterfeiting, continued infringement after effective notice and repetition after settlement can support intent under Article 6. Article 7 identifies serious circumstances including infringement as the principal business or principal profit source, destruction or concealment of evidence, and repeated infringement. Map criminal findings of knowledge, organization and continuity to those elements.

Second, establish an evidential base. Article 8 excludes statutory damages as a punitive base. Article 9 permits reference, under its conditions, to operating profit, sales profit and industry or rights holder margins. Article 10 addresses unjustified non-production or false production following a court order. An estimate of profits supported by evidence is legally different from a discretionary statutory damages award.

Third, express the total accurately. Article 11 permits non-integer multipliers within the statutory range. Article 12 caps the total determined through punitive damages at five times the base, with reasonable enforcement expenses assessed separately. If the earlier RMB48,000 example is lawfully established as the complete base for the relevant scope, and intent, serious circumstances and the proposed multiplier are established, a three-times calculation produces RMB144,000 for that component, plus allowed reasonable expenses. The same RMB48,000 is not added again, and unclassified inventory value does not automatically enter the base.

Fourth, address fines directly. Article 13 requires consideration of a fine imposed for the same infringement and fully enforced when selecting the multiplier, without requiring a party to request that consideration. Establish the conduct covered, enforcement status and any multi-brand allocation issue, and address the appropriateness of the overall sanction. A fine paid to the State is not compensation received by the rights holder and should not simply be deducted from compensatory damages. The former interpretation's permissive language does not replace the current rule.^[4][13]

Finally, claim in time. Articles 2 to 4 require a specified amount, method, facts and reasons. Addition before the close of first-instance oral argument must be permitted; a new request on appeal will not be upheld if mediation fails. If the plaintiff persists in not claiming punitive damages after the court explains the issue, a later separate action on the same infringement facts will not be accepted after the first litigation concludes. Develop the request while evidence is being completed and adjust it appropriately; do not assume a second action will remain available.

8 Connect the award to actual recovery

Article 9(1) addresses actions under Article 3 against persons other than the criminal defendant and provides for corresponding deductions for property returned or compensation obtained through criminal recovery or restitution. Paragraph 2 addresses corresponding treatment during enforcement of an effective civil adjudication. Retain that context and scope. Claims against the criminal offender must also avoid duplicate compensation for the same harm, but should explain the substantive obligation and its performance rather than omit Article 9(1)'s limitation.^[1]

Maintain a receipt-by-receipt record identifying payer, recipient, legal basis, brand, period, harm and actual payment date. Proceeds paid to the treasury, funds still controlled by the authorities and sums paid to another brand owner are not automatically this claimant's recovery. A promise to pay must also be distinguished from performance.

Criminal leniency and civil settlement can be addressed in one carefully drafted arrangement. Article 24 of the criminal interpretation identifies obtaining the rights holder's forgiveness as a circumstance permitting lighter punishment under law. The civil agreement should define the conduct, period, parties and rights settled, payment conditions and any reservation of claims against others. Where lawful, the brand can clearly connect payment progress, cessation and any statement of forgiveness for criminal sentencing purposes. Vague language that everything has been resolved invites later disagreement about the release.^[10]

Prepare for enforcement early. Seizing counterfeits stops distribution; collecting money requires assets of liable persons that may lawfully be executed against. Under Articles 65 and 66 of the Trademark Law, consider interim injunctions, asset preservation and evidence preservation according to their separate requirements. Where a non-party disputes title to property restrained in criminal proceedings, Article 10 of the Provisions directs the matter to the relevant criminal-procedure channels. That ownership issue should not be confused with the brand's damages action.^[1][2]

Article 187 of the Civil Code prioritizes civil liability where the liable person has insufficient property to meet civil, administrative and criminal liabilities arising from the same act. This priority is not a license to disregard attachment priorities, third-party rights or the applicable enforcement procedure.^[5]

9 What brand owners should change now

Begin by adding civil objectives to the criminal evidence plan. Beyond authentication, identify brand allocation, transaction status, operating control, profit records and preservation before destruction. Assess the procedural and valuation routes together before filing: defendants require liability evidence, waiting requires a reason grounded in factual dependence, and damages require a stated method. Bring settlement receipts, criminal restitution and civil enforcement into the same recovery record.

Overseas headquarters should identify the registered owner, licensor, local sales company and provider of financial data early. Prepare evidence of use, product revenue and costs, comparable channels and the relationship between China business data and group reporting. Assigning these tasks to specific business and finance personnel helps avoid repeated requests late in litigation. The objective is evidence supporting the particular claimant and claim, not a large volume of disconnected corporate materials.

Looking ahead, Article 77 of the revised Trademark Law, effective January 1, 2027, places actual loss and infringement profits alongside one another as damages routes. Article 78 specifies actual use during the three years before infringement for the relevant non-use defense. Cases spanning commencement require separate examination of temporal application and implementing rules. Evidence preparation can anticipate those needs, while the legal basis remains tied to the rules applicable to the case.^[3]

The value of a criminal enforcement action should extend to a supported civil claim and achievable relief. The new Provisions clarify procedural and evidential coordination. For brand protection counsel, the work is to apply that framework to each defendant, each group of goods, each damages method and each actual recovery.

Authorities and cases

[1] Civil–Criminal Provisions Fa Shi [2026] No. 19

[2] Trademark Law 2019 amended text

[3] Trademark Law 2026 revision effective January 1, 2027

[4] Punitive damages interpretation Fa Shi [2026] No. 7

[5] PRC Civil Code

[6] SPC explanatory Q&A on the Civil–Criminal Provisions

[7] Civil Procedure Law 2023 amended text

[8] SPC ruling (2023) Zui Gao Fa Zhi Min Zhong No. 2865 dated April 11, 2024

[9] SPC civil evidence provisions 2019 amended text

[10] Criminal IP interpretation Fa Shi [2025] No. 5

[11] SPC and SPP criminal IP protection typical cases Cases 2 and 3

[12] SPC trademark civil interpretation 2020 amended text Articles 14 and 15

[13] 2021 punitive damages interpretation repealed and cited for historical comparison only

About the author

Michelle Xu is Managing Partner and Director of GreRoyalt Law Firm in Shanghai. Her practice focuses on intellectual property protection and dispute resolution.

michelle.xu@greroyalt.com

This article provides general legal information and is not advice on a specific matter.