How will the new tort laws in China affect intellectual property rights?
The new Tort Law of the People’s Republic of China, which will take effect on July 1, 2010, will strengthen intellectual property rights in China. Without the new law, there is almost no legislative basis on which the People’s Courts can determine legal liability for some types of infringement. The new law changes three major areas concerning the enforcement of IP rights: first, it provides a basis for deterring contributory IP infringement; second, it allows for moral damage compensation for infringement; third, it creates new liabilities for network and service providers who allow infringements to continue after they have been notified it is occurring.
What is contributory infringement?
Contributory infringement occurs when one party provides assistance to another in the manufacturing or sale of infringing goods. Though the General Principles of the Civil Law indicate that, in theory, contributory infringement should be illegal, there are no specific provisions through which government officials could enforce the provisions.
Does the new Tort Law fill this gap?
Yes. The new Tort Law allows for joint and several liability for all acts of contributory infringement.
What are moral damages?
Moral damages are simply all non-economic damages that can be awarded as part of compensation in an infringement action. To date, courts have been reluctant to award any moral damages; indeed, they have awarded them only in one instance. In the case of Zhuang Yu v. Guo Jingming the Beijing Higher People’s Court allowed some moral damage compensation after finding that the defendant had plagiarized the plaintiff’s novel, though the moral compensation awarded was equal to only 5% of the economic compensation.
How will the new Tort Law affect moral damages in infringement suits?
The new Tort Law makes it clear that moral damages are appropriate. Its implementation should increase the number of judgments granting moral damages whenever “serious mental distress” has been inflicted as a result of an infringement.
How will the new Tort Law hold service providers responsible for infringement conducted over their networks?
Under the new system, any damaged party may contact a network user or service provider in order to notify him or her of infringement being conducted through the network. If the provider does not take timely action to halt the infringement, it will be jointly and severally liable for the infringement that occurred over the network. This process is called the “notice and remove” rule, under which the burden is shifted to the network or internet service provider to remove the infringing content after it has received notice. This should increase the number of damaged parties who are able to recover when their IP rights have been violated.
