Shanghai courts increase compensation to deter intellectual property infringement

Shanghai courts have increased the compensation in intellectual property (IP) infringement cases to raise the tort cost, the Shanghai High People's Court said on Tuesday, ahead of tomorrow's World Intellectual Property Day.

"It's a way to make potential criminals fear the punishment and stop infringement," said Wang Guangxian, vice deputy of the high court.

A white paper released at the conference showed that the local courts accepted 42,150 cases related to IP infringement last year and closed over 42,760. Due to the influence of the COVID-19 pandemic, the figures decreased by 20.89 percent and 12.91 percent year on year, respectively.

Cases about copyright disputes hold the lion's share, 62.23 percent, followed by trademark rights disputes at 23.29 percent and patent rights disputes at 9.52 percent, it said.

"Many cases have complex and cutting-edge issues," Wang said.

For example, a case about the protocol URL Scheme for switching applications was listed in the top 10 typical cases in 2022 issued by the high court on Tuesday.

When people use their mobile phones with the IOS system to buy something online, the protocol can let commerce platforms like Taobao and Meituan, switch to the Alipay app. But the technology company called Banma edited the protocol and forced the system to ask users whether to switch to its mobile phone management application before the payment. The Alipay (China) Network Technology Company sued.

This is the first of its kind in China. Banma was sentenced to compensate nearly 500,000 yuan (US$72,293) to Alipay.

There are also some cases about new entertainment jubensha, or live-action role-play games. To attract more players, some operators use the backgrounds and characters of famous TV dramas and variety shows without approval, Wang said.

For better handling of these cases, forums have been organized to enhance academic communication between universities and courts. And teams with professional talent for technical investigation and mediation have been established in many local courts.

Li Shulan, vice deputy of the Shanghai IP court, said its technical investigation team with 11 full-timers and 12 new part-timers in different fields, such as organic chemistry, drug analysis and water quality, handled nearly 200 cases last year.

To decrease the number of IP cases, when determining the compensation, the local courts have considered various aspects, including influence, popularity and duration, and supported some plaintiffs' claims for compensation of the full amount, Wang said.

He added that the local courts have focused on criminal crimes in IP cases. Last year, it is the first time that criminal crime clues in an IP case were shared with the local public security bureau by the local courts.

The local courts also improved cooperation with the Shanghai branch of the World Intellectual Property Organization for mediation in September. The branch has handled nearly 70 cases, involving 13 countries and regions like the United States, Switzerland and France, he said.