Patent Litigation in China: What Remedies are Available?

Often, clients have asked if remedies available in the United States for patent infringement are also available in China.  As most would imagine, clients are interested in whether monetary relief is available and to what extent it can be obtained.  They also ask about the ability of injunctive relief and, perhaps more importantly, whether the injunction would be enforced post-proceeding. Monetary and injunctive remedies are both available for patent cases in China.  Historically, some concerns or critiques of the remedies available in China included inadequate enforcement of injunctions, inadequate monetary damages and peculiar requirements for obtaining an injunction.  For example, courts in China have often provided statutory damages with a ceiling of around $1 million dollars.  In addition, Chinese law does not count exportation of goods out of China as an act of infringement.  In other words, China disallows valuation of export goods in a patent infringement action.  There is also no mechanism for obtaining punitive damages or attorney fees for cases that are especially egregious (e.g., willful infringement).  Some suggested improvements would be to increase the availability of larger monetary awards, change law and add exportation of goods as an act of infringement, and/or allow for punitive damages as well as attorney fees for exceptional cases.

Injunctions, both preliminary and permanent, are available in China.  However, a patent owner cannot preclude via injunction market entry of a given product.  Thus, a patent owner would have to wait until a product is sold on the market that would infringe the patent before it could bring its case.  Pharmaceutical companies rely on pre-market entry remedies in protecting their intellectual property.  In addition, Chinese courts can deem an invention “essential” to a local economy and the patent owner would have no remedy if such a ruling were made.  Enforcement of injunctions can be difficult.  For starters, an injunction may not be enforced automatically but instead a patent owner must apply to an enforcement panel to have a defendant comply with the injunction.

Potential help is on the way.  China recently provided draft amendments to its patent law for comment.  These draft amendments allow for willful infringement and treble damages as well as for an administrative agency to order an infringer to pay damages.  These amendments haven’t been approved yet, but demonstrate the growth of China’s intellectual property system given the global economics involved.  It remains to be seen whether China modifies remedies and the law surrounding these remedies going forward.

More from this series: China Emerges as New Hot Spot for Patent Litigation Patents in China: Acquisition and Valuation

For more information on this topic, please visit our Patent Protection service page, which is part of our Patents Practice.

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution.  Additional information about the trademark firm and its trademark attorneys may be found at www.klemchuk.com.

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