China's top court balances innovation, public interest in IP protection

China's top court has underscored the importance of rigorously protecting intellectual property rights while ensuring a balance between public interest and innovation incentives in case handling.

Amid a rise in cases involving high compensation and punitive damages for IP violators, He Zhonglin, deputy chief judge of the Intellectual Property Court of the Supreme People's Court, highlighted the necessity of safeguarding current innovations while allowing room for future developments.

He described protection and interest balancing as two integral aspects of IP protection, noting that protection is the foundation, whereas interest balancing is the ultimate goal.

Since the establishment of the IP Court, a division of the country's top court, in January 2019, punitive damages have been awarded in 58 cases, with total compensation reaching 2.05 billion yuan ($295 million), according to data he cited.

He also revealed that 73 cases involved compensation exceeding 10 million yuan each, totaling 5.24 billion yuan.

These figures reflect a strong judicial stance and intensified efforts to protect IP rights, which are mandated by the central leadership and emphasized in Chinese laws, he said.

"High compensation also directly mirrors the significant development of China's economy and technology, the expansion of market scale, the growth of enterprises, and intensified market competition," he explained.

"As China advances toward high-quality development, intellectual property is increasingly becoming a core asset for enterprises and a critical tool for market competition. Consequently, its market value is rising, and the impact of infringement is becoming more severe," he added.

In recent years, the court has increasingly focused on cases involving cutting-edge technology sectors, with a growing number of cases related to strategic emerging industries, he said, adding that it has led to a significant increase in both the number of high compensation cases and the amounts awarded.

In response to whether higher compensation are always better, he emphasized that the court fundamentally makes judicial decisions based on evidence. While increasing compensation for cases with high levels of innovation and significant infringement harm, the court also appropriately awards lower compensation for cases with general levels of innovation and minor infringement.

"The court will continue to uphold strict protection while better managing the balance of interests between rights holders and the public, aiming to achieve a balance between protecting rights and promoting innovation, further stimulating innovation drive and market competition vitality," he concluded.