Chinese patent litigation and procedural issues: evidentiary requirements to obtain high damages

China’s patent damages landscape has undergone a fundamental transformation. A decade ago, patent holders that brought infringement suits in Chinese courts could generally expect only modest statutory awards, which were typically far below the true extent of their losses. That situation has now changed decisively.

The Intellectual Property Court of the Supreme People’s Court (the SPC IP Court) has issued a series of landmark rulings in which damages reached tens of millions, and in some cases hundreds of millions, of RMB: WAPI (2022 SPC IP Civil Final No. 817, hereinafter referred to as No. 817, 2022) resulted in an award of RMB 143 million, while Melamine (No. 1559, 2020) and Electronic-grade Copper Oxide (No. 1254, 2024) resulted in awards of RMB 120 million.

The emergence of nine-figure awards signals that courts are both willing and equipped to calibrate damages to actual commercial harm, rather than defaulting to the statutory range.

One basic problem, however, remains: China does not have a discovery procedure. A patentee generally cannot compel the defendant to produce financial records, sales data, production records, or internal communications. In the US, by contrast, broad discovery in patent litigation allows the plaintiff to obtain much of the information needed to prove damages from the defendant’s own documents. In China, the patentee often enters the proceedings with little or even no visibility into the defendant’s sales, profits, or other key damages evidence. This information gap is serious, and it has long been a main reason why even strong claims resulted in awards that did not reflect commercial reality.

This article examines the evidentiary strategies and procedural tools that led to high damages awards in 16 SPC IP Court decisions, with awards ranging from RMB 10 million to RMB 143 million.

In the reviewed cases, successful patentees usually developed two lines of evidence at the same time. One line was used to prove infringement. The other, and often the more important one in practice, was used to prove the scale of damages: how many products were sold, how much profit was made, how long the infringement lasted, and through how many sales channels the products were distributed.

For product patents, the usual approach is a notarised purchase together with a technical comparison. For complicated cases, a technical comparison report issued by a judicial/technical appraisal body is preferable, as seen in Glucoamylase (No. 483, 2022) and Intramedullary Nail (No. 148, 2021).

For method patents involving large industrial systems, Melamine showed that administrative regulatory compliance materials can sometimes serve in place of an on-site inspection. These materials included safety assessments, environmental impact reports, and engineering design documents submitted to government authorities. The court treated them as objective third-party evidence of how the defendant’s system was actually implemented.

For standard-essential patents, Ministry of Industry and Information Technology network access permit data can serve two functions at once: it shows that the accused product exists on the market, and it shows compliance with the relevant standard. This approach was used in WAPI.

Where there has already been a prior infringement judgment, proving a later round of infringement becomes much easier. In that situation, the patentee mainly needs to show that the defendant continued using the same technical solution after the earlier judgment.

The first category is external and objective data. This is often the strongest type of damages evidence because it does not depend on the defendant’s cooperation. Tax records were especially important in several cases. In Bear Bile Eye Drops (No. 2874, 2023), a Tax Enforcement Feedback Notice recorded RMB 26.68 million in infringing sales from 2014 to 2019. In Rear-view Mirror (No. 2892, 2022), the court obtained invoice data directly from the tax bureau. Customs export records played a similar role in Gold-finger Circuit Board (No. 1791, 2020), where they showed export volumes without requiring access to the defendant’s internal financial materials. These forms of evidence are particularly valuable because they come from government agencies and are therefore highly credible.

The second category is the defendant’s own public disclosures. This type of evidence is difficult for the defendant to deny later in litigation. In Cavity Microwave Device (No. 379, 2021), the plaintiff relied on the defendant’s annual report together with industry profit margins to estimate the likely profit range from the infringement. In Intramedullary Nail, the court referred to sales data in the defendant’s prospectus and then used that as part of the basis for an adverse inference after the defendant obstructed evidence production. Materials that the defendant has voluntarily submitted to regulators are usually hard to disown later in court.

The third category is multichannel sales evidence. This type of evidence helps show the scope of the infringement. A notarised purchase from only one online platform usually proves only a minimum level of sales, not the full extent of the conduct. In Breast Pad (No. 1124, 2023), the plaintiff carried out notarised purchases on Taobao, JD.com, and Pinduoduo, and used procurement contracts to show broader distribution. In Toy Figurine (No. 1282, 2020), the plaintiff went further by surveying 114 physical retail stores and combining those results with industry white paper data, thereby building a fuller record of both online and offline sales.

The fourth category is historical contracts and comparable licence agreements. In Bear Bile Eye Drops, a prior distribution agreement set out per-unit penalty amounts, which gave the court a concrete reference point for a very large damages claim. In WAPI, the patentee submitted a comparable third-party licence agreement, allowing the court to calculate damages directly on a royalty basis under Article 71 of the Patent Law. In Electrical Connector (No. 646, 2023), the court relied in part on the damages figure in an earlier settlement when considering the punitive damages.

If the lack of discovery is one of the main structural difficulties for patentees in China, the rule on evidence obstruction is the tool that the courts use to address that problem, at least in part.

Article 27 of the SPC’s Judicial Interpretation II on Patent Infringement Disputes allows a court to draw an adverse inference, or even to accept the patentee’s damages claim, when the defendant refuses to produce financial records under its control after the court has ordered production. In practical terms, the rule shifts the consequences of missing information away from the patentee, which does not have access to the records, and on to the defendant, which has the records but chooses not to produce them.

Four conditions generally must be met:

• The patentee must provide preliminary evidence showing the likely scale of the infringement;

• The relevant records must be mainly in the defendant’s possession;

• The court must issue a formal order requiring production; and

• The defendant must fail, without a good reason, to produce complete and reliable records.

In the reviewed cases, defendants used a range of tactics to avoid full disclosure. Some argued that internal reorganisation made production impossible, as in Cavity Microwave Device. Some produced only partial records, as in Azo Dye (No. 111, 2022). Some submitted audit reports prepared after the fact, without a method the court could verify, as in Toy Figurine. Others claimed that their profit margins were low but offered no supporting accounting materials, as in Bear Bile Eye Drops. None of these arguments succeeded.

Once the court finds evidence of obstruction, the information problem no longer works mainly against the patentee. Instead, it begins to work against the defendant. In Melamine, the defendant refused to produce records, and the court accepted the patentee’s RMB 120 million damages claim even though no internal records were available. In Cavity Microwave Device, the court relied on annual report data and industry profit margins and awarded RMB 40 million. In Bear Bile Eye Drops, the court expressly stated that when a party holds relevant records but fails to produce them, it should bear the resulting adverse consequences. The final award increased from RMB 4.53 million to RMB 10.03 million.

The strength of the court’s adverse inference depends heavily on the quality of the patentee’s preliminary evidence. Where the patentee had already provided objective and quantified external materials – such as a tax certificate, invoice records obtained through the court, or figures from a prospectus – the court was willing to draw a much stronger inference.

Article 71 of China’s Patent Law sets out a clear order for calculating damages. Courts should first look to the patentee’s actual losses or the infringer’s profits. If neither can be reliably calculated, the court may use a reasonable multiple of a royalty. Statutory damages come last. The SPC IP Court’s decisions show that courts are willing to support patentees that remain on these higher levels of the damages framework instead of falling back on statutory damages.

In the reviewed cases, the most common method was to calculate the infringer’s profits. Proving the patentee’s actual losses often requires difficult analysis of market substitution and lost sales. By contrast, the infringer’s profits can often be estimated more directly by combining sales volume with unit profit margin. That approach is especially workable when the patentee can rely on external data and industry profit margins, and when the defendant refuses to produce its own records. The royalty-based method is also useful when comparable licence agreements are available. By comparison, statutory damages remain a fallback option in SPC IP Court practice.

The 2020 amendment to the Patent Law also added punitive damages under Article 71. That provision allows the court to multiply the base damages by one to five times where the infringement is both intentional and serious. In 2025 alone, Chinese courts had applied punitive damages in 505 intellectual property cases, with total punitive awards reaching RMB 1.8 billion. The reviewed patent cases show, however, that punitive damages can increase an award; they are not necessary for obtaining a high award.

Three of the reviewed cases applied a two-times multiplier:

• Long-chain Diacid (No. 3178, 2023);

• Rear-view Mirror; and

• Electrical Connector.

In each of these cases, there had already been an earlier judgment finding infringement, and the defendant continued the same conduct afterwards. That made wilfulness relatively easy to establish.

At the same time, the three largest awards in the study – i.e., Melamine (RMB 120 million), WAPI (RMB 143 million), and Copper Oxide (RMB 120 million) – were reached without any punitive multiplier. Those awards were built instead on strong external evidence and the defendant’s obstruction of evidence production. The practical point for the plaintiff is straightforward: even without a prior judgment, it is still possible to pursue a high damages claim if the evidentiary groundwork is prepared well.

When a patent covers a process used in a large chemical plant or other industrial facility, the usual purchase-and-test method is not workable. Melamine showed that materials filed with environmental and safety regulators can fill this gap. These materials, such as hazard assessment reports and engineering design documents, often record technical parameters that can be compared with the patent claims. They carry strong evidentiary weight because they were prepared to satisfy regulatory requirements rather than for use in litigation. Just as importantly, they can often be obtained from government authorities without the defendant’s cooperation.

When the patent covers a production tool rather than the final product, direct inspection of the accused tool is often not possible. Microwave Oven Mould (No. 1584, 2022) addressed this problem through pre-litigation evidence preservation and reverse technical analysis. The experts started from the physical features of the final product and then identified the tooling features that would necessarily have produced those features.

In this type of case, the plaintiff should identify suitable technical experts early and obtain preliminary analysis before applying for evidence preservation.

Breast Pad shows that a brand owner may be held jointly liable with the manufacturer in an original equipment manufacturer arrangement if the brand owner was involved in setting the product’s technical specifications or design requirements. To prove this, the patentee should look for procurement contracts containing technical specifications, communications showing the brand owner’s involvement in the design process, and evidence of sales across multiple channels.

Adding the brand owner as a defendant can significantly improve the amount of any judgment and the chances of enforcement, because brand owners often have more reachable assets than contracted manufacturers.

The following actions are recommended before filing suit:

• Use administrative channels early – before filing suit, consider whether government channels can help generate damages evidence. A complaint to the tax authorities may lead to enforcement feedback identifying the defendant’s infringing sales over multiple years. Customs inquiries may also help establish export volumes by product type, without relying on the defendant’s records.

• Collect the defendant’s public disclosures in a systematic way – these may include annual reports, IPO prospectuses, regulatory filings, and marketing materials that describe sales performance. Listed companies often disclose figures publicly that can later be used against them in litigation.

• Carry out notarised purchases across multiple platforms and at different points in time – a single notarised purchase usually shows only a limited part of the infringement. By contrast, repeated notarised purchases across major e-commerce platforms, made at different times and preserving cumulative sales information, can provide a much stronger basis for proving the scale of infringement.

• Look for comparable licence agreements or earlier commercial contracts – these materials can help show the economic value of the patented technology, even if they are not formal patent licences. Any real commercial benchmark can make the damages claim less subjective and easier for the court to accept.

At filing and during litigation:

• Request the production of accounts from the outset – the request should be included in the complaint and supported by the preliminary evidence already collected. Courts are much more likely to respond to a request tied to concrete external evidence than to a general assertion that the defendant controls the relevant information.

• Apply for evidence preservation without delay where there is a real risk of destruction – if there is a genuine risk that manufacturing records, inventory records, or server data may be lost or destroyed, the plaintiff should seek pre-litigation evidence preservation as early as possible.

• Monitor compliance with production orders closely – partial disclosure, unexplained delay, or submissions with unclear methodology should be identified promptly and placed on the record. A finding of evidence obstruction is not automatic. The plaintiff must show the court, with some precision, how the defendant has failed to comply.

• Respond to unsupported low-margin arguments with industry data and the defendant’s own statements – SPC IP Court decisions consistently refuse to accept low-profit claims that are not backed by accounting evidence. Industry-average data and the defendant’s public disclosures can be effective tools for challenging such defences.

The SPC IP Court’s decisions show that courts are prepared to award substantial damages when the patentee presents an evidence record that is grounded in objective external materials, developed through available procedures, and tied to a credible commercial basis for calculation. The absence of discovery remains a real limitation, but it is not insurmountable.

China’s evidence obstruction rules mean that a defendant’s failure to cooperate may support a substantial award, so long as the patentee has already provided enough reliable external evidence to give the court a sound basis for quantification. For that reason, damages evidence should be treated as a central part of case strategy from the earliest stage of case assessment.

A patentee that enters litigation with tax records, customs data, and the defendant’s public disclosures is already in a much stronger position to secure a meaningful award.

Case reference	Name	Damages (RMB)
2022 SPC IP Civil Final No. 817	WAPI	143 million
2020 SPC IP Civil Final No. 1559	Melamine	120 million
2024 SPC IP Civil Final No. 1254	Electronic-grade Copper Oxide	120 million
2021 SPC IP Civil Final No. 379	Cavity Microwave Device	40 million
2023 SPC IP Civil Final No. 3178	Long-chain Diacid (punitive ×2)	30 million
2022 SPC IP Civil Final No. 483	Glucoamylase	23.05 million
2021 SPC IP Civil Final No. 148	Intramedullary Nail	20.1 million
2021 SPC IP Civil Final No. 2480	Cellulase	20 million
2022 SPC IP Civil Final No. 111	Azo Dye	19.5 million
2023 SPC IP Civil Final No. 1124	Breast Pad	16.1 million
2020 SPC IP Civil Final No. 1282	Toy Figurine	15.5 million
2022 SPC IP Civil Final No. 2892	Rear-view Mirror Actuator (punitive ×2)	12.2 million
2023 SPC IP Civil Final No. 646	Electrical Connector (punitive ×2)	12.05 million
2020 SPC IP Civil Final No. 1791	Gold-finger Circuit Board	10.5 million
2022 SPC IP Civil Final No. 1584	Microwave Oven Mould	10.2 million
2023 SPC IP Civil Final No. 2874	Bear Bile Eye Drops	10.03 million