PRC Trademark Law Article 63

Calculation Method

Sequential steps for determining the amount of money owed by an infringer follow a strict hierarchy of evidence. Under the prc trademark law article 63, the court first looks at the actual loss suffered by the trademark owner due to the violation. If this amount is difficult to calculate, the court then looks at the total profit the infringer made from the illegal use of the mark.

A third option is to use a multiple of what a reasonable licensing fee would have been for the mark. If none of these can be proven, the judge has the power to set a statutory damage amount based on the severity of the case. This structured approach ensures that the compensation is as accurate as possible given the available data.

It also prevents the plaintiff from claiming arbitrary amounts without evidence.

Punitive Damage

Financial penalties for willful and serious infringement can be increased significantly to act as a deterrent for future violations. The prc trademark law article 63 allows the court to apply a multiplier of between one and five times the calculated loss if the infringement was done in bad faith. This was a major update to the law designed to combat the problem of professional trademark squatters and large scale counterfeit operations.

To get punitive damages, the owner of the mark must show that the infringer knew they were breaking the law and that the impact of the infringement was particularly harmful. This might include cases where the infringing goods posed a risk to public health or safety. The introduction of these higher penalties has made trademark litigation a much more serious threat for dishonest businesses.

Evidence Spoliation

Procedural rules regarding the disclosure of financial records prevent infringers from hiding their profits during a lawsuit. If a plaintiff has provided reasonable evidence of the infringement but cannot get the account books of the defendant, the prc trademark law article 63 allows the court to order the defendant to produce them. If the defendant refuses or destroys the records, the court can accept the plaintiff’s estimate of the damages as the final amount.

This shifts the risk of missing information onto the party that is withholding it. This rule is a powerful tool for trademark owners who often struggle to find proof of how many fake goods were sold. The threat of having the court accept the other side’s numbers usually forces a more honest disclosure.

This ensures that the final judgment is based on the reality of the illegal trade.