Reflection And Limitation Of Application Of Punitive Damages In Intellectual Property Law

Punitive damages are monetary compensations that the court decides the infringer to pay in addition to compensatory damages for the purpose of punishment and deterrence based on factors such as the infringer’s subjective viciousness and damage consequences.The introduction of punitive damages in the field of intellectual property law(“the System”)in China started with the revision of the Trademark Law in 2013 and subsequently appeared in many laws such as the Seed Law,the Civil Code,the Patent Law,and the Copyright Law.With the official implementation of the Interpretations of the Supreme People’s Court on the Application of Punitive Damages in the Hearing of Civil Cases of Intellectual Property Rights Infringement on March 3,2021,applying punitive damages in intellectual property law in China has begun to shift from a comprehensive layout at the legislative level to a specific application at the judicial level.It is conceivable that under the pressure of policy-driven and frequent intellectual property infringement,the application of the system is about to usher in a new peak since 2013.Under the above background,it is necessary to make a phased review and an in-depth review of the System on the judicial application at this stage.Since the introduction of the System,Chinese academics have analyzed the legitimacy and functionality of the System from the perspectives of economy,ethics,psychology,etc.,and most of them affirmed,agreed,and were optimistic about the future application and the realization of the goal.However,Germany,France,and other countries,which are also civil law countries,have always maintained a cautious attitude towards punitive damages that originated and developed in common law countries.When the System is entering a new stage of application,work like reviewing and summarizing the staged situations since its implementation,and reflecting on whether the academic community in China has fully resolved and responded to the inherent theoretical problems,has important academic and practical value.In addition,many questions waiting to be answered.What is the current status of the application of the system as well as the attitudes of the academics in foreign countries? Based on the common law countries where punitive damages were born and developed,is there any special consideration for the application in the field of intellectual property law? Are there any problems and drawbacks in the application of the system? What are the limits and attitudes of the common law countries regarding the application of the system? Taking civil law countries that have never opened their hands to punitive damages as a boundary,how do typical civil law countries such as Germany treat punitive damages in the field of intellectual property law? Is there a special focus in this area,or is it always treated in a unified manner? In the case that punitive damages are not applied in civil law countries,how do they realize the potential deterrence and punishment functions of their legal protection systems?Based on the above,this thesis reflects on punitive damages in intellectual property law from the perspectives of empirical research,value orientation research,legitimacy research,and extraterritorial investigation,and proposes a path for applying application limitations.The main contents of the first chapter include below.First of all,it sorts out China’s legislation on punitive damages,analyzes its characteristics,and points out that the current punitive damages system is unbalanced and uncoordinated,and the functional value and scope of application have not been reasonably explained.In addition,the legislative evolution of punitive damages in the field of intellectual property law is also reviewed.Secondly,it comprehensively inspects the situation since the application of punitive damages in intellectual property law.Taking the period from "May 1,2014,to September 1,2021" as the closing date,it studies 1,852 judgments in the field of trademarks and 119 judgments in other fields and then summarizes the characteristics of the cases,the reasons,and specific forms of application,the reasons for inapplicability,etc.Finally,based on empirical research,the thesis puts forward the application problems,that is,the overall application effect is not obvious,the application requirements still need to be unified,the calculation of compensation is difficult,and the boundary between statutory compensation and other responsibilities is unclear,etc.This chapter also raises potential issues of the System such as the risk of abuse and the recognition and enforcement of punitive damages related judgments in other countries.The second chapter is the research on the value orientation of punitive damages in intellectual property law.First,the concept of legal value and value orientation is introduced.It points out that the institutional value of punitive damages embeds the basic values generally recognized by academics,such as order,freedom,justice,and efficiency.It is argued that there is a difference in the value orientation of the System in common law countries and China.The former’s basic orientation is to promote the realization of the value of freedom through the pursuit of efficiency value,while the expansion of punitive damages in intellectual property law in China seems to be mainly based on the maintenance of "people" from the perspective of intrinsic value,starting from "people" to the realization of order,fairness,and justice.Based on this,the chapter then examines the value orientation of punitive damages in the system of intellectual property damage compensation,as well as the value orientation of the System in common law countries and China respectively.It argues that the basic idea of the System in China includes the policy orientation throughout the legislation,as well as promoting the strategic positioning of building a strong intellectual property power,that is,the strategic advancement under this goal and the active promotion under the shaping of the international image of intellectual property.Finally,this chapter investigates the institutional changes of the System in Chinese Taiwan,summarizes its institutional characteristics and value orientation,and draws inspiration from the investigation.The chapter argues the judicial application of the System in China’s mainland deserves more consideration in terms of specific details to reflect the fairness of the law and the legitimacy of punitive damages.The third chapter is the reflection on the legitimacy of the punitive damages in intellectual property law.First,it introduces the concepts of legitimacy and legal legitimacy theories and the evaluation elements of legal legitimacy.Based on different perspectives and methods,the dimensions and criteria for evaluating a law or a system have various elements.It is argued that if the evaluation elements of legal legitimacy are classified into some categories,they can be embodied into four categories,which are substantive legitimacy,value legitimacy,formal legitimacy,and procedural legitimacy.And it is proposed that when evaluating a specific legal system with the theory of legal legitimacy,it is necessary to consider the internal mechanism and characteristics of the legal system and evaluate within the scope of specific institutional characteristics.Secondly,the chapter argues that to study the System with the evaluation elements of the theory of legal legitimacy,the core is substantive legitimacy.Based on this,the thesis studies the basic attributes of intellectual property rights,the nature of intellectual property damage compensation,and their internal relevance and compatibility with punitive damages.It is pointed out that punitive damages give intellectual property protection beyond private rights and are misplaced with the goal of the intellectual property system.Thirdly,it expounds on the common domestic theories and their characteristics on the legitimacy of the System and points out their limitations.The previous studies mainly discussed the justification of punitive damages in the field of intellectual property law,but less directly discussed the legitimacy of legislative implementation performance;Many arguments are considered based on the characteristics of intellectual property rights,the infringement characteristics of intellectual property rights,and the epochal nature,but at the same time,there are many discussions based on the punitive damages itself;Many previous pieces of research excessively used the function of the system as punitive damages to introduce the bottom line argument in the field of intellectual property;Many of arguments have excessively used domestic and international trends as the justification criteria for institutional introduction,but there are certain doubts about the scientific nature of this argument.Finally,the chapter presents the main disputes over the legitimacy of the punitive damages system in foreign countries.The fourth chapter is the extraterritorial investigation of the punitive damages in intellectual property law.It examines the punitive damages or damage compensation of intellectual property law in Britain,the United States,Australia,Canada,New Zealand,Germany,and South Korea respectively.First,punitive damages in intellectual property law in Britain,like traditional punitive damages,seem to be on the decline,whether they are vague in statutes or not much applicable in case law.The Britain academics do not have much special discussion on the legitimacy and necessity of the application of punitive damages in the field of intellectual property law.In British judicial practice,punitive damages do not seem to have paid special attention to the field of intellectual property law from the beginning.Secondly,it is proposed that the punitive damages in US intellectual property legal system have the following characteristics.First,the fault elements for the application of punitive damages are the same,that is,only intentional or malicious infringement of intellectual property rights can be applied;Second,the ratio of punitive damages to compensatory damages is stable at below three times;Third,the amount of compensation is generally more limited than other huge punitive damages,and more consideration is given to the balance of interests between the intellectual property owner and the public.Finally,through inspection,it is believed that Germany currently does not have punitive damages,while South Korea is actively expanding the application of punitive damages in the field of intellectual property law.The fifth chapter is the research on the limitation of the application of punitive damages in intellectual property law.The research in this chapter is based on the fact that China has established a relatively systematic system of punitive damages in intellectual property law,and in the current and a long period time in the future,the application and continuous improvement of the System will be the primary task.First,the chapter proposes the need to limit the application of punitive damages in intellectual property law,that is,it had not yet addressed the theoretical shortcomings,and it still needs to be improved in practice;the development of extraterritorial punitive damages can give China some inspiration.Secondly,the thesis determines the applicable rules of punitive damages in intellectual property law and proposes the principle of non-active use that restricts the application.The subjective element should be "malicious",and it needs to establish a typed and dynamic standard of "serious circumstances".Finally,the thesis proposes to determine the amount and attribution of punitive damages,and proposes that it should be limited to “more than one time and less than three times”.At the same time,it explores a new path of attribution of punitive damages in intellectual property infringement,that is,splitting the recovery or establishing the Rights Protection Fund.