Research On Intellectual Property Statutory Damages In China

Excessive application of statutory damages mostly results from immaterialobjects of intellectual property plus the hidden and frequent infringements.Imperfection of legislation makes the monetary awards lack of unified standard anddeficient to make up to the plaintiffs. And it also highlights that the reasons to applystatutory damages are not sufficiently demonstrated in current judicial practice. As acalculation method under the whole compensation principle, statutory damages inChina should be based on the value selection of justice, efficiency and the balance ofinterests, where we can confirm the application condition of statutory damages andthe benchmark, calculation standard and reference factor to count the damages. Onone hand, improving the legislation offers judges a rationale path to apply statutorydamages to restrain the arbitrary and inconsistent in discretion. On the other hand,facilitating judges to demonstrate the reason and constitution of the damages moresufficiently.To ease the abuse of statutory damages and reinforce the protection for rightholders, statutory damages should play a compensatory role in the provision of theorder of its application. Because of low requirement of proof and discretion, statutorydamages must be applied after exhausting all the other calculation methods.Meanwhile, to solve the problem of low damages, when part of the damages can bedetermined with the other methods, the undetermined part should be apply statutorydamages simultaneously in consideration of all the reference factors, which does notonly stimulate the right holders’ enthusiasm to proof, but also provide a legal basis toraise the amount of compensation. Besides, on the premise that the right holdersfollow the order of its application, the right to claim the application of statutorydamages should be entitled by legislation. As to the defendants’ right to claim theapplication, unless with the right holders’ consent, the right to claim should be limited.Based on the balance of interests, when the right holders claim the application ofstatutory damages, the court should guarantee the defendants’ rights to plea. Combined with the provision of Civil Procedure Law of the People’s Republic ofChina, when the plaintiffs institute and before the end of court debate, the court couldapply the statutory damages.To determine reasonable damages is the purpose of the application of statutorydamages, which means that statutory damages must be applied on the base of thewhole compensation principle and regard actual losses suffered from the infringementas benchmark. Abolishing the minimum of statutory damages and enhancing theprocedural requirement of proof will make the damages not too much higher than theactual losses. To make sure that the damages are not lower than the actual losses, inaddition to applying statutory damages simultaneously with the other calculationmethod to raise the amount of compensation, it is necessary to raise the maximum ofstatutory damages in Patent Law and Copyright Law and reduce the demand ofstandard of proof while augment the defendants’ burden of proof, calculate reasonableexpenses of the right holders for stopping the infringement independent of statutorydamages and clearly stipulate the damages for right holders prior to fine andconfiscation of illegal gains in Administrative Law. Intellectual property is the objectand center of infringement. Having number of intellectual property rights as thecalculation standard include the advantages of the others as well as overcome thedeficiencies, in accord with the value selection of justice, efficiency and the balanceof interests. When it comes to the reference factors to apply statutory damages, thelogic starting point is the possible actual losses suffered by the right holders or thepossible profits acquired by the infringers. Then consider the type and market valueof intellectual property and the way, duration, region and scale of the infringement. Atlast, take account of the royalty or fee of the same type of right under the samecondition. Infringers’ subjective fault shouldn’t be one of the reference factors, orstatutory damages will become punitive.