China’s Supreme People’s Court Issues Detailed Guidelines on Punitive Damages in IP Infringement Cases

On April 20, 2026, China’s Supreme People’s Court (SPC) released the Interpretation on the Application of Punitive Damages in the Trial of Civil Disputes Involving Intellectual Property Infringement (关于审理侵害知识产权民事纠纷案件适用惩罚性赔偿的解释), which will take effect on May 1, 2026. This Interpretation aims to provide judicial clarity and uniformity in the application of punitive damages within civil IP infringement cases.

Adopted at the 1972nd meeting of the Judicial Committee of the SPC on April 7, 2026, the Interpretation is grounded in multiple laws including the Civil Code, Copyright Law, Trademark Law, Patent Law, Anti-Unfair Competition Law, Seed Law, and Civil Procedure Law of the People’s Republic of China. It reflects the Court’s intent to rigorously punish serious intellectual property rights violations and to implement the punitive damages system effectively.

Article 1 establishes that courts shall hear cases where plaintiffs claim intentional infringement with serious circumstances and request punitive damages. Article 2 requires plaintiffs to specify the amount of damages sought, the calculation method, and the factual basis for their claim.

Procedurally, Article 3 permits plaintiffs to add punitive damages claims before the conclusion of the first-instance court debate. If such claims are introduced during the second instance, courts may attempt mediation on a voluntary basis; failure of mediation results in the claim not being supported.

Article 4 bars plaintiffs from filing separate lawsuits for punitive damages based on the same infringement facts if they did not request punitive damages during the initial lawsuit despite court notification.

Article 5 clarifies that punitive damages claims related to intentional unfair competition, excluding trade secret infringement, are generally not supported unless otherwise provided by law.

Regarding the determination of intent, Article 6 directs courts to consider factors such as the type of intellectual property, the status and reputation of the rights, and the relationship between defendant and plaintiff or interested parties. The Interpretation lists specific circumstances where intent to infringe may be presumed unless rebutted by evidence. These include continued infringement after effective notification, overlapping legal representatives or controllers between parties, prior business or licensing relationships involving the infringed rights, acts of piracy or counterfeiting, repeated infringement after settlement agreements, and attempts to conceal control relationships or evade liability through affiliated companies or false identities.

This Interpretation provides a comprehensive framework to ensure consistent judicial handling of punitive damages in IP infringement cases, reinforcing China’s legal mechanisms to deter and penalize intentional violations of intellectual property rights.