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China’s 2025 Work Report: Strengthening Intellectual Property Protection


China’s 2025 Work Report: Strengthening Intellectual Property Protection

In an era where intellectual property (IP) is the foundation of innovation and economic growth, China’s judicial system continues to evolve in its enforcement and protection mechanisms. On March 8, 2025, China’s Supreme People’s Procuratorate (SPP) and Supreme People’s Court (SPC) released their annual Work Reports at the 14th National People’s Congress, outlining key developments in intellectual property law enforcement. 


The reports highlight an increase in prosecutions for IP crimes, the growing use of punitive damages in civil IP cases, and notable legal precedents that set the tone for the country’s commitment to safeguarding innovation. As China seeks to bolster its position as a global leader in technological and creative industries, these developments offer valuable insights for businesses, legal professionals, and policymakers worldwide. 


Cracking Down on Intellectual Property Crimes 


The SPP’s 2025 Work Report underscores a significant crackdown on IP-related criminal activities. According to the report, 21,000 individuals were prosecuted for IP crimes in 2024. One notable case involved a trade secret prosecution under China’s equivalent of the Economic Espionage Act, demonstrating the government’s focus on protecting proprietary information from unlawful misappropriation. 


However, the report omitted mention of other significant criminal cases, such as the nine-year prison sentence for copyright infringement involving counterfeit Lego bricks. This selective highlighting suggests that China is particularly emphasizing cases related to trade secrets, possibly to align with its economic and geopolitical interests in securing proprietary business information. 


Increase in Punitive Damages for IP Infringement 


A key highlight from the SPC’s 2025 Work Report was the increased awarding of punitive damages in IP cases. The courts awarded punitive damages in 460 cases involving malicious infringement with serious circumstances, marking a 44.2% year-on-year increase. This shift signals China’s commitment to strengthening deterrents against deliberate IP violations. 


One of the most striking cases involved a 640 million RMB award in an electric vehicle (EV) trade secret dispute. While this case underscores the judiciary’s willingness to impose substantial financial penalties, the report also noted that only the non-monetary portion of the judgment has been satisfied, as the defendant has declared bankruptcy. This raises questions about the practical enforceability of large damage awards and whether alternative mechanisms may be needed to ensure that IP owners receive full compensation. 


Rising IP Case Volume and Judicial Efficiency 


China’s courts concluded 494,000 intellectual property cases in 2024, reflecting a 0.9% increase year-on-year. While this rise may seem modest, it represents the sustained prioritization of IP issues within China’s judicial system. The increase in case volume also highlights the growing complexity of IP disputes, as industries such as technology, automotive, and entertainment continue to expand. 


The focus on judicial efficiency and fairness is crucial for both domestic and foreign businesses operating in China. Strong IP enforcement mechanisms foster an environment where companies feel confident investing in research and development, knowing that their innovations will be legally protected. 


The Broader Implications of China’s IP Enforcement Trends 


The trends outlined in the 2025 Work Reports indicate several broader implications for businesses and legal practitioners: 


  1. Greater Protection for Trade Secrets: The focus on prosecuting trade secret theft aligns with China’s ambition to strengthen its domestic innovation ecosystem and build trust with foreign investors. Companies should implement rigorous internal security measures to safeguard proprietary information. 


  2. Punitive Damages as a Deterrent: The increase in punitive damages highlights the courts’ commitment to making IP infringement financially unviable. Businesses must ensure robust IP compliance to avoid severe penalties. 


  3. Ongoing Challenges in Enforcement: While awarding large damages is a step in the right direction, the difficulty in enforcing such awards—especially when defendants face financial insolvency—remains an issue. Companies may need to explore alternative legal strategies, such as obtaining injunctive relief or leveraging international arbitration mechanisms. 


  4. Evolving Legal Landscape: With nearly half a million IP cases being processed annually, staying informed about China’s legal developments is crucial for companies with operations or supply chains in the region. IP strategy should be a key component of business planning. 


Conclusion: A Stronger IP Framework in the Making 

China’s latest Work Reports reinforce the country’s dedication to strengthening intellectual property enforcement. From increased prosecutions to higher punitive damages, these measures aim to create a fairer and more secure environment for innovators and businesses. However, practical challenges remain, particularly in the enforcement of financial judgments. 

For businesses, legal professionals, and policymakers, these developments emphasize the need for continuous vigilance and adaptation to China’s evolving IP landscape. By understanding these trends and proactively safeguarding intellectual assets, stakeholders can better navigate the opportunities and risks in the world’s second-largest economy. 

 

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