For many years, patent litigation in China was marked by an apparent contradiction: while the number of infringement actions grew steadily, the damages awarded by the courts remained generally modest and often failed to reflect the true economic value of the technology being protected. In recent years this scenario has changed profoundly. Decisions of the Intellectual Property Court of the Supreme People’s Court (SPC IP Court) show a growing trend in the quantification of damages, in some cases exceeding RMB 100 million. These are not isolated episodes, but rather the expression of a jurisprudential evolution that places increasing emphasis on the concrete reconstruction of the harm suffered by the patent holder. Chinese law establishes a precise hierarchy of criteria used to quantify damages: Only when none of these criteria can be concretely applied is it possible to resort to so-called statutory damages, i.e. a lump-sum amount that the judge determines at his or her discretion within a range set by law (currently between RMB 30,000 and RMB 5 million), taking into account the nature of the patent and the severity of the infringement. Alongside these criteria, for intentional infringements characterized by serious circumstances, punitive damages may be applied, allowing the judge to multiply the base amount by a factor of one to five. Recourse to this mechanism, however, presupposes that the base amount was determined according to one of the first three criteria set out above. Statutory damages, being lump-sum in nature, cannot instead be used as the basis for the punitive multiplier. SPC decisions show that courts today are increasingly reluctant to automatically resort to statutory damages, favoring instead calculation criteria more closely aligned with the actual economic scale of the infringement. The main obstacle: the absence of discovery One of the peculiarities of Chinese civil procedure is the absence of a discovery system. A patent holder cannot automatically obtain from the defendant accounting records, sales registers, production data, or other internal information necessary to quantify damages. This limitation has long been one of the main factors preventing the award of significant damages. Without data on sales or profits generated by the infringer, judges were often compelled to fall back on statutory damages, typically lower than the actual economic harm suffered. Recent SPC case law shows, however, that this limitation can be overcome through careful planning of the evidence-gathering strategy. Proving the damage Analysis of the leading SPC decisions shows that the most successful proceedings do not merely establish that infringement occurred, but devote particular attention to gathering evidence capable of reconstructing the scale of the unlawful activity. In other words, litigation strategy develops along two parallel tracks: on one hand, the technical determination of patent infringement, and on the other, evidence of the economic impact of the infringement. It is precisely this latter aspect that today represents the decisive factor in the quantification of damages. SPC practice shows that the evidence given greatest weight is that originating from sources independent of the parties. Among these, the following are of particular importance: This information enables the court to reconstruct sales volumes, the duration of the infringing activity, and, in many cases, the economic margins realized by the infringer. Of particular interest is also the coordinated use of multiple commercial sources. The most recent decisions show that gathering evidence (with related notarization) across different sales channels, both online and offline, makes it possible to represent the actual scale of distribution of infringing products more reliably. Evidence obstruction as a rebalancing tool Despite the absence of discovery, Chinese law provides a procedural tool that is taking on growing importance: the so-called evidence obstruction principle. This is a mechanism that operates only at a party’s initiative: the court does not order the production of documentation on its own motion, but does so only if the patent holder requests it, supporting the request with evidence making the existence and scale of the infringement plausible. Where the court orders the defendant to produce accounting or commercial documentation and the defendant refuses without justification, or produces incomplete or unreliable documentation, the court may draw adverse inferences against it. This is not an automatic mechanism. For this principle to apply, the patent holder must first have provided objective evidence sufficient to demonstrate, at least on a preliminary basis, the likely scale of the infringement. Recent case law shows that, once this requirement is satisfied, the defendant’s failure to cooperate can significantly affect the determination of damages. Some practical recommendations for businesses The approach taken by the Chinese Supreme Court offers particularly useful guidance for foreign companies seeking to enforce patents in China. First, evidence gathering should begin well before litigation is commenced, through the acquisition of documentation from public and administrative sources. It is also advisable to systematically monitor the corporate communications of the potential infringer, to carry out notarized purchases through different distribution channels, and to retain all contractual documentation capable of demonstrating the commercial value of the patented technology. Finally, once proceedings have been started, it is essential to promptly request an order for the production of accounting documentation and to carefully monitor the defendant’s actual compliance. Final remarks The evolution of SPC case law confirms that the Chinese patent protection system is progressively moving away from its image as a jurisdiction characterized by symbolic damages awards. The absence of genuine discovery certainly remains a significant difference; however, the combination of a well-structured evidentiary framework, the growing use of evidence from public sources, and recourse to the rules on evidence obstruction now enables patent holders to obtain significantly higher damages than in the past. For companies operating in the Chinese market, the message is clear: the success of an infringement action no longer depends solely on the ability to prove patent infringement, but above all on the preparation of an evidentiary strategy built from the stages preceding the commencement of litigation.
2026 - Morri Rossetti
