The National People’s Congress (NPC) voted and passed the “Civil Code of the People’s Republic of China” which was then signed by President Xi Jinping on Thursday into a presidential decree stating that China's civil code had been adopted at the third session of the 13th National People's Congress, the country's top legislature. The civil code will take effect on January 1, 2021 as an amalgamation of a series of civil laws ranging from an individual's marital issues to trade rights.
The draft code, which first was announced in 2014, consists of seven parts and 1,260 articles, including general provisions and sections on property, contracts, personality rights, marriage and family, as well as inheritance and torts liability.
Of note to foreign investors the new Civil Law includes many provisions related to intellectual property (IP). The most notable of which are IP provisions for punitive damages for intentional infringement, which will be potentially most valuable in patent infringement cases.
Article 1185 out of a total of 1260 articles states, “if the circumstances are serious, the infringed person shall have the right to request corresponding punitive damages” with reference to intellectual property. This actually aligns with the trademark law published last November 2019 which provides for increased punitive damages. Article 63 of the trademark law, increased punitive damages to up to four times the assessed damages when infringement is “committed in bad faith and the circumstance is serious.”
The NPC also released a draft amendment of the Copyright Law that provided for punitive damages on April 26, 2020. Article 53 of the draft amendment adds quintuple damages for intentional infringement and raises maximum statutory damages to 5 million RMB from 500,000 RMB when damages are hard to prove.
Where this provision may have the most effect is in the patent law, which currently does not have a provision for punitive damages. However, the Supreme People’s Court is working on an “Interpretation of Several Issues Concerning the Application of Law on Punitive Compensation for Intellectual Property Infringement” to be completed in the First Half of 2021.
The National People's Congress released a statement regarding the Civil Code, "the compilation of a civil code will expand the scope of civil rights, form a more complete system for these rights, and refine rules for protecting them and remedying their infringement."
The aim is to build a socialist rule of law system with Chinese characteristics under the leadership of the Communist Party of China reflecting the opinions of the people, during the drafting process following solicitation a total of 1.02 million comments were received from approximately 425,000 individuals, social representatives and scholars.