Comparison France-China in calculating damages in IP infringement cases

To assess damages in Intellectual Property cases is always a difficult task, whatever the

country. Let us compare the methods used in China and France today.

The main regulation for this topic in China Law is the article 65 of China's Patent Law, specifically interpreted by China's Supreme People's Court in the “Several Provisions on Issues Concerning Applicable Laws to the Trial of Patent Disputes”. Under all these long names, four methods to calculate damages for patent infringement have been drawn out.

First, based on the actual loss incurred to the patentee due to the infringement. Second, based on the infringer's infringement profit. Third, based on a multiplicity of the royalty fees. Lastly, and only to be applied when the other three methods fail, based on the statutory damages. The provisions I mentioned before provide guidelines for calculating actual losses and infringement profit (article 20), and also for determining royalty fees and providing general principles for statutory damages (article 21). Although for statutory damages, a lot of subjective elements will be taken into account by the Courts.

French IP Law sets no definite standard for awarding damages, although it provides that "any assignee of (patent rights) license shall be accepted as a party in the action involving patent forgery brought by the owner of the patent so that the assignee may be compensated for the interests he deserves." Compensation shall be granted if he proves the existence of his rights and the infringement.

The mains problem is to measure the amount of appropriate compensation. In French legal practice, two principles can be seen : firstly, the compensation for infringement damages should be equal to, but shall not exceed the actual damages. Secondly, the compensation is limited to the direct damages resulting from the infringement.

The two systems differ in the way they define their damages for IP infringement, so be sure to keep that in mind when protecting you brands and patents in China !