The State Council, China's Cabinet, recently approved a guidance document on strengthening protection for intellectual property rights. The document proposes stiffer punishments for infringements of intellectual property rights and a higher ceiling for compensation.

According to the guidance, malicious infringements will face punitive damages, in order to increase the cost of intellectual property right infringements and deter violations.

Punitive damages shall be decided by the court with the amount of compensation exceeding the actual loss involved.

Lawmakers in China have proposed the adoption of punitive damages for a long time, and they are now being discussed as part of the revisions to the Trademark Law, Copyright Law and Patent Law.

Experts say that in awarding punitive damages the judge will have the discretion to set the compensation amount for intellectual property right infringements under certain conditions, but the specific stipulations such as how to decide whether it is a malicious infringement or repeated infringement are still under discussion.

Fighting against intellectual property right infringements is essential in order to create a healthy environment for innovation.