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Images: Okan Çalışkan, Law and Justice Concept;
Peter Griffin, Money
(Publicdomainpictures.net)

The Supreme People’s Court of China’s landmark judgment that ordered an infringer of technological secrets to pay the owner of these secrets nearly RMB 640 million as damages was recently selected as a Guiding Case. However, the guiding principles of this case do not focus on this exceptionally high amount of damages, but primarily concern (1) the circumstances under which an alleged infringer has the burden to prove that the alleged infringement did not occur; and (2) the additional damages an infringer is required to pay if the infringer fails to perform, within the required time period, the obligations imposed by the judgment. This Guiding Case has significant implications for the implementation of China’s new five-year plan on judicial protection of intellectual property rights.

Image: Linnaea Mallette, Panda Bear Tapestry Ethnic Art
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The extraterritorial reach of China’s new law on “ethnic unity” has drawn attention because the law has a broadly phrased provision stating that “organizations and individuals” located outside China can be held liable if they, targeting China, carry out acts “undermining ethnic unity and progress” or “creating ethnic division”. While this extraterritorial application of the law deserves attention, the domestic enforcement of the law must also be followed closely as, if mishandled, such enforcement could lead to circumstances that would complicate China’s relations with its strategic partners such as Kazakhstan.

Image: Mohamed Mahmoud Hassan, Installment, Car, Bank, Percentage
(Publicomainpictures.net)

Judicial protection of intellectual property (“IP”) rights in China has been perceived to be limited because, among other problems, the amounts of damages awarded by Chinese courts in IP infringement cases have historically been small. However, this state of affairs may be changing, as China’s Supreme People’s Court (“SPC”) rendered a landmark judgment in a case involving large-scale infringement of trade secrets, allowing the victims to receive an amount equivalent to almost USD 90 million as compensation. As analyzed by Nathan Harpainter and David Zhao, Co-Managing Editors of SINOTALKS®, the innovative approach taken by the SPC to calculate the damages in the landmark case is essentially based on the concept of “unjust enrichment”. The steps followed by the SPC to do the calculation are helpful but inadequate. To help China develop its jurisprudence in this important area, the two co-authors discuss related U.S. experiences.

Image: Petr Kratochvil, American Flag And City Buildings (Publicdomainpictures.net)

On March 6, 2025, Dr. Mei Gechlik, Founder & CEO of SINOTALKS^® gave a talk about China’s Guiding Cases and related topics to a group of attorneys at the U.S. Department of Commerce to deepen their understanding of China’s court system and latest developments.