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Beijing IP Court Boosts Damages for Patent Infringement
In December 2016, Beijing IP Court announced a decision regarding a patent infringement case relating to USBKey, fully supporting the compensation of RMB 49,000,000 and the attorney fee of RMB 1,000,000 claimed by the plaintiff, RMB 50,000,000 in total, which set a record high since the establishment of the court.
For this case, the judicial committee of Beijing IP Court decided after discussion that: first, the amount of damages is calculated by multiplying the number of the accused infringing products actually sold by the reasonable profit of each patented product; second, given that the defendant refuses to provide the profits obtained from selling the infringing products, the reasonable claim of the plaintiff is presumably established; and third, the hourly billing method used by law firms can be adopted as the criteria for calculating the reasonable cost of the attorney fee, and as to whether the amount of the attorney fee claimed by the plaintiff is reasonable, factors such as the necessity for entrusting a law firm, the complexity of the case, or the efforts made by the attorneys, shall be taken into consideration.
The court decision of this case spends more than five thousand words to demonstrate the calculation of the compensation and the attorney fee. Full explanation is made to the number of the accused infringing products, the reasonable profit of the patent product, calculation of the actual loss, application of the rules for evidence obstruction, etc. Detailed elaboration is given to the reasons why the hourly billing method is used for calculation of the attorney fee and the relevant evidence. Without conventional empty talks like "the court determines the amount of damages by taking factors such as… into overall consideration," the court decision made clear to the concerned parties and the public how the RMB 50,000,000 is calculated.
Since its establishment, Beijing IP Court keeps on boosting damages for patent infringement cases. In 2015, the average damages for patent infringement in Beijing IP Court reached RMB 450,000, apparently higher than the average damages of RMB 80,000 for the whole country before 2014. In 2016, the average damages for patent infringement in Beijing IP Court reached RMB 1,410,000.