Calculating Base Damages and Multipliers in Chinese Trademark Infringement
Base damages under PRC Trademark Law Article 63 follow strict evidentiary priority, with multipliers up to five times applied for willful infringement.
Serious Circumstances Quantification
Meaning
Statutory severity metrics in Chinese administrative and criminal law determine when commercial non-compliance elevates from basic civil infringement to severe statutory violations. Applying serious circumstances quantification requires measuring illegal business turnover, duration of unlawful conduct, production scale, or public safety impact against established statutory thresholds. Pursuant to judicial interpretations issued jointly by the Supreme People’s Court and Supreme People’s Procuratorate, meeting these criteria triggers higher administrative fine brackets or criminal prosecution.
The evaluation methodology stops applying once the illegal turnover falls below prescribed monetary levels and causes no public harm.
Threshold Criterion
Monetary limits defined by statutory guidelines categorize illegal business revenue into specific enforcement tiers. Operating an illegal factory line generating turnover above fifty thousand yuan meets the baseline for administrative sanction escalation. Under serious circumstances quantification, regulatory authorities combine multi-year production metrics to reach statutory prosecution limits.
Evidence of dangerous component usage or manufacturing counterfeit medical goods lowers the required financial threshold, accelerating formal enforcement action.
Criminal Transfer
Administrative agencies verifying severe violations are legally mandated to transfer case files to public security departments under administrative law. Police officers initiate formal criminal investigations and arrest corporate managers when statutory limits are crossed. Foreign brand owners utilize administrative inspection findings to demonstrate severe commercial impact, compelling local authorities to initiate criminal proceedings.
Criminal conviction results in custodial sentences for factory operators alongside complete confiscation of production machinery.
Liability Escalation
Escalated statutory classifications eliminate corporate options for voluntary administrative settlement or minor fine payments. Corporate legal representatives face personal criminal liability once operational scale metrics cross statutory boundaries.