GreRoyalt
(Adopted at the 1972nd Meeting of the Adjudication Committee of the Supreme People's Court on April 7, 2026, and effective as of May 1, 2026)
For the purpose of lawfully punishing serious intellectual property infringement, strictly implementing the punitive damages system for intellectual property rights, and in accordance with the relevant provisions of the Civil Code of the People's Republic of China, the Copyright Law of the People's Republic of China, the Trademark Law of the People's Republic of China, the Patent Law of the People's Republic of China, the Anti-Unfair Competition Law of the People's Republic of China, the Seed Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China, and other relevant laws, and in light of adjudication practice, this Interpretation is hereby formulated.
Article 1
Where a plaintiff claims that the defendant has intentionally infringed intellectual property rights lawfully enjoyed by the plaintiff and that the circumstances are serious, and requests that the defendant bear liability for punitive damages, the people's court shall hear the case in accordance with the law.
Article 2
A plaintiff requesting punitive damages shall specify the amount of damages claimed, the method of calculation, and the facts and grounds upon which the claim is based.
Article 3
Where a plaintiff adds a claim for punitive damages before the conclusion of court debate in the first-instance proceedings, the people's court shall permit such addition.
Where a plaintiff adds a claim for punitive damages during the second-instance proceedings, the people's court may conduct mediation based on the principle of voluntariness of the parties. If mediation fails, the claim shall not be supported.
Article 4
Where, in an intellectual property infringement action, a plaintiff claims damages but does not request punitive damages, and still fails to make such a request after the people's court has provided clarification, the people's court shall not accept a subsequent lawsuit filed after the conclusion of the proceedings seeking punitive damages based on the same infringing act.
Article 5
Where a plaintiff seeks punitive damages for intentional acts of unfair competition committed by the defendant other than trade secret infringement, the people's court shall not support such claim, unless otherwise provided by law.
Article 6
In determining whether intellectual property infringement is intentional, the people's court shall comprehensively consider factors such as the type of intellectual property right involved, the status and reputation of the right, and the relationship between the defendant and the plaintiff or interested parties.
Under any of the following circumstances, the people's court may determine that the defendant acted intentionally in infringing intellectual property rights, unless there is sufficient contrary evidence to rebut such determination:
The defendant continues the infringing conduct after receiving a valid notice from the plaintiff or an interested party;
The defendant, or its legal representative or manager, is the legal representative, manager, or actual controller of the plaintiff or an interested party and knew or should have known of the infringed intellectual property right;
The defendant has an employment, labor service, cooperation, licensing, distribution, agency, representation, or similar relationship with the plaintiff or an interested party and had access to the infringed intellectual property right through such relationship;
The defendant had business dealings or contract negotiations with the plaintiff or an interested party and had access to the infringed intellectual property right through such relationship;
The defendant engaged in piracy, trademark counterfeiting, or patent passing-off;
After reaching a settlement with the plaintiff and agreeing to cease infringement, the defendant commits the same or similar infringing acts again;
The defendant conceals the actual control relationship by establishing affiliated companies, changing legal representatives or controlling shareholders, secretly establishing companies, or enters into exemption agreements to evade legal liability for infringing the intellectual property right at issue;
Other circumstances sufficient to establish intent.
Article 7
In determining whether the circumstances of intellectual property infringement are serious, the people's court shall comprehensively consider factors such as the means and frequency of infringement, the duration, geographic scope, scale and consequences of the infringement, and the infringer’s awareness and attitude toward the infringing conduct.
The people's court shall determine that the circumstances are serious where any of the following situations exists:
The defendant commits the same or similar infringing act again after having been subjected to administrative penalties or court-imposed legal liability for infringement;
The defendant refuses, without justified reason, to comply with a preservation order;
The defendant forges, destroys, or conceals evidence of infringement;
The defendant engages in intellectual property infringement as its principal business or derives its primary profits from infringement;
The infringement yields enormous profits or causes serious damage to the right holder’s goodwill, market share, or similar interests;
The infringement harms or is likely to harm national interests or the public interest;
Other circumstances that should be deemed serious.
Article 8
When determining the amount of punitive damages, the people's court shall, in accordance with the relevant laws, use the plaintiff’s actual losses, the defendant’s illegal gains, or the benefits obtained through infringement as the calculation base.
The calculation base shall not include the reasonable expenses incurred by the plaintiff in stopping the infringement. Where laws provide otherwise, such provisions shall prevail.
Where the plaintiff’s actual losses, the defendant’s illegal gains, and the benefits obtained through infringement are all difficult to calculate, the people's court shall reasonably determine the calculation base for punitive damages by reference to the licensing fee for the intellectual property right in accordance with the law.
Statutory damages shall not serve as the calculation base for punitive damages.
Article 9
Where the defendant’s illegal gains or profits from infringement are used as the calculation base for punitive damages, operating profit may be used as a reference.
Where the defendant is engaged in intellectual property infringement as a business, sales profit may be used as a reference.
If the profit margin cannot be determined, it may be calculated by reference to the average profit margin for the same industry and period published by statistical authorities, industry associations, or similar organizations, or by reference to the right holder’s profit margin.
Article 10
Where the people's court orders the defendant to provide account books, materials, and other evidence related to the infringement that are under its control, and the defendant, without justified reason, refuses to provide them or provides false account books or materials, the people's court may determine the calculation base for punitive damages in accordance with the plaintiff’s claims and the evidence on record.
Where the circumstances fall within Article 114 of the Civil Procedure Law, legal liability shall be pursued in accordance with the law. Where laws provide otherwise, such provisions shall prevail.
Article 11
When determining the multiplier for punitive damages, the people's court shall comprehensively consider factors such as the degree of the defendant’s subjective fault and the seriousness of the infringement.
The multiplier shall be determined within the statutory range and need not be an integer.
Article 12
The total amount of damages determined through the application of punitive damages shall not exceed five times the calculation base.
The reasonable expenses incurred by the right holder in stopping the infringement shall be calculated separately and in addition to such total amount.
Article 13
Where the same infringing act has already resulted in the imposition and execution of an administrative fine or criminal fine, the people's court shall take such circumstance into account when determining the multiplier for punitive damages.
Article 14
This Interpretation shall come into force on May 1, 2026.
Upon the implementation of this Interpretation, the Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Trial of Civil Cases Involving Intellectual Property Infringement (Judicial Interpretation No. 4 [2021]) shall be repealed simultaneously.
For cases in which an effective judgment has been rendered before the implementation of this Interpretation, this Interpretation shall not apply where a party applies for retrial or a retrial is initiated under adjudication supervision procedures after its implementation.
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