Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Adjudication of Civil Disputes Arising from Intellectual Property Infringement
Judicial Interpretation [2026] No. 7
(Adopted at the 1972nd meeting of the Judicial Committee of the Supreme People's Court on April 7, 2026 and effective as of May 1, 2026)
To lawfully punish serious intellectual property infringement and strictly implement the punitive damages system for intellectual property rights, this Interpretation is formulated in accordance with the Civil Code, the Copyright Law, the Trademark Law, the Patent Law, the Anti-Unfair Competition Law, the Seed Law, the Civil Procedure Law, and other relevant laws and regulations of the People’s Republic of China, and in combination with judicial practice.
Rule 1
Where the plaintiff claims that the defendant intentionally infringes on the intellectual property lawfully enjoyed by the plaintiff and the circumstances are serious, and requests that the defendant be ordered to bear punitive damages liability, the people's court shall try it in accordance with the law.
Rule 2
Where the plaintiff requests punitive damages, he/she/it shall specify the amount of compensation, the calculation method, and the facts and reasons on which the request is based.
Rule 3
Where the plaintiff adds a request for punitive damages before the end of the debate in the court of first instance, the people's court shall allow it. Where a request for punitive damages is added in the second instance, the people's court may conduct mediation based on the principle of voluntariness of the parties. If the mediation fails, the court shall not support such request.
Rule 4
Where the plaintiff, in an intellectual property infringement lawsuit, claims compensatory damages but not punitive damages, and fails to add such a claim even after the court has provided clarification, any subsequent separate lawsuit based on the same infringing facts seeking punitive damages shall not be accepted by the people's court.
Rule 5
Where the plaintiff requests punitive damages against intentional acts of unfair competition that do not involve trade secret infringement, the court shall not support such request, unless otherwise provided by law.
Rule 6
For the determination of intentional intellectual property infringement, the people's court shall comprehensively consider factors such as the type of the intellectual property, the status and public awareness of the rights, and the relationship between the defendant and the plaintiff or the interested parties.
Under the following circumstances, the people's court may find that the defendant has the intent to infringe on the intellectual property right, unless the defendant presents sufficient contrary evidence to rebut such a finding:
(1) The defendant continues to commit the infringing act after being effectively notified by the plaintiff or the interested parties;
(2) The defendant or his/her/its legal representative or manager is the legal representative, manager or actual controller of the plaintiff or the interested parties, and knew or should have known of the infringed intellectual property right;
(3) The defendant has a labor, service, cooperation, licensing, distribution, agency, representative or any other relation with the plaintiff or the interested parties, and had access to the infringed intellectual property through that relationship;
(4) The defendant has business dealings, or has negotiated for reaching a contract, etc., with the plaintiff or the interested parties, and had access to the infringed intellectual property through that relationship;
(5) The defendant commits acts of piracy, trademark counterfeiting, or patent counterfeiting;
(6) After reaching a settlement with the plaintiff and agreeing to stop the infringement, the defendant again commits the same or similar infringement;
(7) The defendant conceals its actual control relationship by establishing affiliated companies, changing legal representatives or controlling shareholders, or operating through nominee companies, or signs liability waivers, in order to evade legal liability for infringing the intellectual property right at issue;
(8) Other circumstances that can be determined as intentional.
Rule 7
For the determination of serious circumstance of intellectual property infringement, the people's court shall comprehensively consider factors such as the means and frequency of the infringement, the duration, geographical scope, scale and consequences of the infringing act, and the infringer's awareness of and attitude toward the infringing act.
If the defendant has any of the following circumstances, the people's court may determine that the circumstance is serious:
(1) Committing the same or similar infringement again after being administratively punished or being held liable by a people’s court;
(2) Refusing to fulfill a preservation ruling without justifiable cause;
(3) Forging, destroying or concealing evidence of infringement;
(4) engaging in infringement as a business, such as by taking infringing acts as its primary business activity or relying on infringement proceeds as its primary source of profit, etc.;
(5) Making huge gains from the infringement or causing the rights holder to suffer serious damage to their goodwill or market share from the infringing act;
(6) Endangering or possibly endangering national security or public interests with the infringing act;
(7) Other circumstances that can be determined as serious.
Rule 8
When determining the amount of punitive damages, the people's court shall, in accordance with relevant laws, take the amount of the plaintiff’s actual loss, the amount of the defendant’s illegal gain or benefit obtained due to infringement as the calculation basis. This basis does not include the reasonable expenses paid by the plaintiff to stop the infringement. If the law provides otherwise, such provisions shall prevail.
If the amount of actual loss, the amount of illegal gain and the benefit obtained due to infringement mentioned in the preceding paragraph are all difficult to calculate, the people's court shall reasonably determine, in accordance with the law, the basis for calculating the amount of punitive damages by reference to the license fee of the right.
Statutory damages may not serve as the basis for calculating the amount of punitive damages.
Rule 9
Where the defendant's illegal gain or profit from infringement is used as the calculation basis for punitive damages, the damages may be determined by reference to operating profit. Where the defendant engages in intellectual property infringement as a business, the damages may be calculated by referenced to sales profit. Where the profit margin cannot be determined, the damages may be calculated by reference to the average profit margin in the same industry during the same period as published by statistical authorities or industry associations, or the profit margin of the right holder.
Rule 10
If the people's court orders in accordance with the law the defendant to provide the infringement-related books, materials, etc., that are in the control of the defendant, but the defendant refuses to provide them without justifiable reasons or provides false books and materials, the people's court may, based on the plaintiff's claim and evidence on the record, determine the basis for calculating the amount of punitive damages in accordance with the law. Those whose acts constitute the circumstances stipulated in Article 114 of the Civil Procedure Law shall be investigated for legal liabilities in accordance with the law. If the law provides otherwise, such provisions shall prevail.
Rule 11
When determining the multiple for punitive damages in accordance with the law, the people's court shall comprehensively consider the degree of the subjective fault of the defendant, the seriousness of the infringement and other factors. The multiple shall be determined within the statutory range and does not need to be an integer.
Rule 12
The total amount of punitive damages determined by the people's court shall not exceed five times the calculation basis. The plaintiff's reasonable expenses incurred to stop the infringement shall be calculated separately from the total amount.
Rule 13
If a fine has already been imposed for the same infringing act and the execution is completed, the people's court shall take this into account when determining the multiple for punitive damages.
Rule 14
This Interpretation shall take effect as of May 1, 2026.
Upon the effective date of this Interpretation, the Interpretation of the Supreme People's Court on the Application of Punitive Damages in the Adjudication of Civil Disputes Arising from Intellectual Property Infringement (Judicial Interpretation [2021] No. 4) shall be repealed simultaneously.
For cases in which a final judgment has already been rendered before the effective date of this Interpretation, this Interpretation shall not apply where a party applies for retrial or where retrial is ordered under supervisory procedures after the effective date of this Interpretation.
