CHINA Trends and Developments Contributed by: James Luo and Angie Guo, Lawjay Partners
Firstly, through mechanisms like the shifting of the burden of proof and the doctrine of evidence obstruction, when a rights-holder has made reasonable efforts to provide evidence and critical evidence is held by the infringer, courts may order the infringer to submit the evidence, thereby alleviating the rights-holder’s eviden- tiary burden. If the infringer refuses to provide the evidence without a justified reason, courts may determine the compensation amount based on the rights-holder’s claims and may consider such refusal as evidence obstruction, potentially increasing the punitive damages awarded. Secondly, courts have adopted a more flexible approach to calculating compensation amounts, allowing rights-holders to demonstrate a reason- able compensation range rather than a specific figure. Even if an exact value cannot be ascer- tained, courts will make judgments based on reasonable estimations. This flexible approach ensures that the rights-holder receives fair com- pensation for the infringement, even when the exact quantum of loss is not readily quantifiable.
Additionally, in some cases, courts have com- bined punitive damages with statutory damages – applying punitive damages to portions that can be clearly calculated and statutory damages to portions that cannot be precisely quantified. This approach ensures that the rights-holder receives adequate compensation for the infringement while maintaining the operability of the legal system. Overall, despite the challenges in implementing punitive damages in China, they are gradually demonstrating greater vitality and effectiveness as a key means of intellectual property protec- tion. As the legal system improves and judicial practices evolve, punitive damages are set to play a more significant role in maintaining fair market competition and promoting innovation and development.
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