Determination of the amount of damages for patent infringement in China

Determination of the amount of damages for patent infringement in China

Introduction

In patent infringement, the amount of damage compensation can be determined by the actual loss of the right holder, the benefit of the infringer, and the statute compensation. Under which is a brief instruction at the specific provisions of the amount of patent infringement compensation

Interpretation of concept

In patent infringement, the amount of damage compensation is mainly determined by the amount of property damage caused by the infringement of the patent right to the right holder. There are four methods to calculate the amount of damages for patent infringement:

1, to determine the actual losses suffered by the right holder

The benefit gained from the infringer = the total number of infringing products sold in the market.

2, the infringement is determined by the interests of the infringement

The loss of right holder caused by the infringement = the total number of sales reduction caused by the infringement, and the reasonable profit of each patent product

If the total number of sales reduction to the right holder is difficult to be determined, the loss of holder suffered by the infringement will be calculated on the total number of infringing products sold in the market multiply the profit by every patent product.

3, the interests gained by the infringement of infringer

The losses of right holder or gains of the infringer is difficult to determine, to which the patent license fee can refer, the people's court may according to the type of patent right with the fact, nature and circumstances of illegal act of the infringer; the nature, scope, time and other factors of the patent licensing, to rule the compensation amount as one to tree times of patent licensing fee.

4, to determine by statutory damages

No patent licensing fees can be referred or the patent license fee is obviously not reasonable as reference, the people's court may determine the amount of CNY 5000 to CNY 300.000 as compensation, the most maximum can not exceed CNY 500.000 in accordance with the type of patent, the nature and circumstances and other factors of infringer.

Note: the fourth calculation methods can only be used when the prior three methods are not available.

Legal basis

"People's Republic ofChinapatent law"Article 65, the amount of compensation for infringement of the patent right shall be determined in accordance with the actual losses suffered by the right holder; the actual loss is difficult to determine, and can be determined according to the interests of the infringing person. The loss of the owner or the interests of the infringed is difficult to determine, with reference to the use of the patent licensing fees reasonably determined. The compensation amount shall also include the reasonable expenses paid by the right to stop the infringement.

The loss of right holder , the gains obtained by the infringer and patent licensing fees are difficult to determine, the people's court may, according to the type of patent, the nature and circumstances and other factors of infringer, determine to ruling of  more than ten thousand CNY but less than one million CNY as damages compensation.

Case reference

A is a patent holder of product a. B began to manufacture and sale of the patented product a in May 1, 2010. Not did A find out that B had produced their patented products until May 1, 2011, with filed a patent infringement lawsuit against B to the court. The actual losses of A suffered were difficult to decide after investigation, the only clues was that knowledge B has sold the value of CNY 200,000 products.

 In the above cases, B constituted a patent infringement which should bear the damages for patent infringement. According to the method of determining the amount of damages, should first determine the losses suffered by the rights of holder A whom the actual loss suffered difficult to determine, so to application of the second methods, the amount of compensation determined by the benefits of B acquired. B acquired interest of CNY 200 thousand. Therefore, B should bear CNY 200 thousand of patent infringement damages.

Resolution methodes 

Tip: in the patent infringement dispute, the right holder in the claim for damages to patent infringement, the amount of compensation can be determined in accordance with the above process.

Legal strategy

Brief the procedures of Litigation process with jurisdiction.

1 ,  litigation jurisdiction to copyright infringement for picking court .

① The level of jurisdiction： The first instance shall be under the jurisdiction of intermediate people's court and the second instance shall be under the jurisdiction of highest people's court.

② Territorial jurisdiction: the jurisdiction of the people's Court of the place where the copyright infringement lawsuit is carried out by the place of infringement, the storage place of the infringing copy, or the people's Court of the place where the defendant has his domicile.

2. Trademark infringement litigation under the jurisdiction of the court

① The level of jurisdiction: first instance charged by the intermediate court.

② Territorial jurisdiction: jurisdiction of the people's Court of the place where the infringing act is carried out, the place where the infringing goods are stored, or the place where the defendant has his domicile.

3 court of jurisdiction over patent infringement

① The level of jurisdiction：

In the first instance of patent dispute,  the intermediate people's Court of the people's Government of the provinces, autonomous regions or municipalities directly under the central government ; or the intermediate people's court designated by the Supreme People's court shall be under jurisdiction to decide the case. 

② Territorial jurisdiction: the litigation brought about by the infringement of the patent right, which is under the jurisdiction of the court in the place where the infringing act or the defendant has his domicile.