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, as identified by the Supreme People’s Court itself, do not focus on this exceptionally high amount of damages.  Instead, they 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.

A Landmark Judgment

In April 2024, the Supreme People’s Court rendered a landmark judgment in a lawsuit brought by Zhejiang Geely Holding Group and its associated companies (collectively referred to as “Geely”) against WM Motor Technology Group Co., Ltd. and its associated companies (collectively referred to as “WM Motor”).

“This was the highest amount ever awarded by a Chinese court in an intellectual property infringement lawsuit.”

Geely alleged that WM Motor was engaged in large-scale infringement of Geely’s technological secrets.  Almost forty product management and technical personnel left Geely to join WM Motor, bringing with them Geely’s proprietary technology.  They incorporated such technology into WM Motor’s electric vehicles and even sought to apply for related patents.  Ultimately, the Supreme People’s Court ruled against WM Motor, ordering it to pay Geely an amount equivalent to almost USD 90 million as damages.  This was the highest amount ever awarded by a Chinese court in an intellectual property infringement lawsuit.

Despite the complicated circumstances involved, the Supreme People’s Court was able to use an innovative approach to calculate the damages, almost two-thirds of which were punitive in nature.  This reflects the highest court’s determination to both punish WM Motor for its large-scale infringement and deter others from committing similar infringement.  For a detailed explanation of the court’s calculation, see Nathan Harpainter & David Wei Zhao, Determining Damages in Trade Secret Cases: China’s Landmark Case vs. U.S. Experiences.

In September 2024, merely a few months after this landmark judgment was rendered, the case was selected as a Typical Case, in which the Supreme People’s Court’s firm determination to combat unfair competition was praised.

Guiding Case No. 273

In February 2026, the aforementioned landmark judgment was further selected as Guiding Case No. 273, which was identified as one of a few Guiding Cases released to focus on “strengthening judicial protection of intellectual property rights for technological innovations”.

As Guiding Cases are de facto binding precedents in China—whereas Typical Cases are not, even though they do carry some significance (see explanations here), the guiding principles established in Guiding Case No. 273 are expected to be explicitly referenced by courts handling similar cases in the future.

Two key guiding principles of Guiding Case No. 273 should be noted.  The first one creates an exception to the foundational principle in civil cases—that it is the party seeking relief (i.e., the plaintiff) who carries the burden of proof—and shifts the burden of proof from the plaintiff, who alleges infringement, to the defendant, the alleged infringer.  The exception is described in the following manner:

Where an alleged infringer recruits talent from another enterprise—thereby creating a channel or opportunity to obtain that enterprise’s technological secrets—and [subsequently] manufactures products related to those technological secrets within a timeframe clearly shorter than what would be reasonably required for independent research and development, it may be presumed that the alleged infringer has committed an act of infringing on those technological secrets, unless the alleged infringer provides sufficient evidence to the contrary to rebut this presumption.

[emphasis added]

“Should WM Motor fail to perform these obligations on time, it would be required to pay RMB 100,000 per day for the delayed performance.”

The second key guiding principle of Guiding Case No. 273 enables a Chinese court ordering an infringer to perform certain obligations to cease infringement to also require the infringer to pay additional damages should the infringer delay in his performance of these obligations.  Depending on each case’s specific circumstances, the amount of additional damages can be calculated, for example, on a daily or monthly basis or as a one-time fixed amount.  In Geely v. WM Motor, WM Motor was ordered by the Supreme People’s Court to, apart from paying Geely nearly RMB 640 million as damages for infringement, perform multiple additional obligations.  These obligations included orders to, within 30 days of the service of the judgment in this case, notify the employees who left Geely to join WM Motor of the judgment in the case and request that each of these employees sign a letter of undertaking regarding the protection and non-infringement of Geely’s trade secrets.  Should WM Motor fail to perform these obligations on time, it would be required to pay RMB 100,000 per day for the delayed performance.

Implications for China’s Judicial Protection of Intellectual Property Rights

In April 2026, the Supreme People’s Court issued the Implementation Plan for Judicial Protection of Intellectual Property Rights by People’s Courts (2026–2030) (“Implementation Plan”) to set the goal, among others, of further improving China’s adjudication system by 2030 so as to meet the requirements for establishing China as “a powerful nation in intellectual property”.

The Implementation Plan emphasizes the need to “strengthen the protection of scientific and technological innovations to support high-level self-reliance and self-strengthening in science and technology” through, for example, impartial and efficient adjudication of intellectual property disputes involving key core technologies and emerging industries, such as biomanufacturing, aerospace, and new energy.  The Implementation Plan also emphasizes the need to “intensify the punishment of infringement” by “enhancing the timeliness and effectiveness of judicial protection for intellectual property rights” and “severely punishing […] malicious or repeated infringement”.

The two key guiding principles of Guiding Case No. 273 discussed above—the shifting of the burden of proof to the alleged infringer under certain circumstances and the punishment for delayed performance of obligations stated in judgments—will help address the above two needs of the Implementation Plan, bringing China closer to becoming “a powerful nation in intellectual property”.

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• The citation of this article is: Dr. Mei Gechlik, China’s Innovations & Delayed Performance in Intellectual Property Cases, SINOTALKS.COM^®, SINOTALKS^® In Brief, June 24, 2026, https://sinotalks.com/inbrief/innovation-delayed-performance-intellectual-property.

• The original, English version of this article was edited by Nathan Harpainter.  The information and views set out in this article are the responsibility of the author and do not necessarily reflect the work or views of SINOTALKS^®. ↩︎

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