The Supreme People’s Court (SPC) published an article on 8 May 2025, entitled “The Impact of Dishonest Litigation Conduct on the Determination of Reasonable Expenses for Rights Protection”. The article discusses Civil Judgment (2021) No. 2480 and clarifies that dishonest behavior - such as false or inconsistent statements made during litigation - can be considered by courts when determining the amount of reasonable enforcement expenses to be awarded to the rights holder in intellectual property disputes.
Case Background and Court Rulings
The case was initiated on 25 October 2017 by a US company, acting as a licensee of the Chinese invention patent No. 200480036105.7, entitled “Endoglucanase STCE and Cellulase Compositions Containing Endoglucanase”. The patent right is owned by Meiji Co., Ltd. The US company alleged that two Chinese companies - one engaging in manufacturing and the other in marketing and selling the accused products - had infringed upon its patent rights.
The plaintiff sought immediate cessation of the infringing activities, destruction of infringing products and related manufacturing equipment, compensation for economic losses totaling RMB 18.5 million; and reimbursement of RMB 1.5 million in reasonable enforcement expenses.
In response, the defendants argued that their products had legitimate sources, did not fall within the scope of the asserted patent claims, and that the claimed damages and expense calculations lacked legal and factual basis.
On 31 May 2021, the Shanghai Intellectual Property Court, acting as the court of first instance, found that the accused products indeed fell within the scope of claims 1 and 11 of Meiji’s patent. The court also noted that during the litigation, both defendants made inconsistent and, in some cases, false statements, especially regarding the technical specifications and distribution of the infringing products. These actions significantly increased the plaintiff’s burden of proof.
The first-instance court awarded RMB 10 million in economic damages and RMB 1 million in reasonable expenses. Unsatisfied, all parties appealed. The SPC docketed the appeal on 13 December 2021. A public hearing was held on 19 November 2023, and on 14 December 2023, the SPC rendered its final decision.
The SPC overturned the partial damages and expenses awarded at first instance and held both defendants jointly liable for the full economic damages of RMB 18.5 million and for the entire RMB 1.5 million in enforcement expenses claimed by the plaintiff.
Court’s Reasoning on Reasonable Enforcement Expenses
In upholding the full claim for reasonable expenses, the SPC cited several reasons:
1) The plaintiff submitted valid invoices for notarization (RMB25,130), translation (RMB1,698), and product testing (RMB30,000), which were necessary for evidence collection;2) The legal fees were supported by formal billing documents in line with international legal billing practices, which were deemed sufficient to prove actual expenditure;3) The infringement involved complex and technical issues and was carried out in a concealed manner, requiring more extensive legal efforts than ordinary cases;4) The defendants’ repeated inconsistent and false statements during litigation directly increased the plaintiff's legal workload, justifying a higher amount of legal fees.
Based on these factors, the SPC found that the claimed legal expenses were reasonable and fully supported the plaintiff’s request.
Comment
This judgment sends a strong message to litigants in IP disputes: dishonesty during litigation not only undermines the defense but can also lead to heavier financial liabilities. The SPC’s recognition that false or misleading litigation conduct imposes additional burdens on enforcement reflects a pragmatic approach to ensuring procedural fairness and efficiency. For patent holders, particularly foreign ones navigating China’s legal system, this decision affirms that courts are willing to fully support legitimate claims for enforcement costs, provided the claims are well-documented and justified. It also underscores the importance of meticulous litigation strategy and documentation when confronting infringing parties that attempt to obstruct proceedings through bad faith tactics.
Case Background and Court Rulings
The case was initiated on 25 October 2017 by a US company, acting as a licensee of the Chinese invention patent No. 200480036105.7, entitled “Endoglucanase STCE and Cellulase Compositions Containing Endoglucanase”. The patent right is owned by Meiji Co., Ltd. The US company alleged that two Chinese companies - one engaging in manufacturing and the other in marketing and selling the accused products - had infringed upon its patent rights.
The plaintiff sought immediate cessation of the infringing activities, destruction of infringing products and related manufacturing equipment, compensation for economic losses totaling RMB 18.5 million; and reimbursement of RMB 1.5 million in reasonable enforcement expenses.
In response, the defendants argued that their products had legitimate sources, did not fall within the scope of the asserted patent claims, and that the claimed damages and expense calculations lacked legal and factual basis.
On 31 May 2021, the Shanghai Intellectual Property Court, acting as the court of first instance, found that the accused products indeed fell within the scope of claims 1 and 11 of Meiji’s patent. The court also noted that during the litigation, both defendants made inconsistent and, in some cases, false statements, especially regarding the technical specifications and distribution of the infringing products. These actions significantly increased the plaintiff’s burden of proof.
The first-instance court awarded RMB 10 million in economic damages and RMB 1 million in reasonable expenses. Unsatisfied, all parties appealed. The SPC docketed the appeal on 13 December 2021. A public hearing was held on 19 November 2023, and on 14 December 2023, the SPC rendered its final decision.
The SPC overturned the partial damages and expenses awarded at first instance and held both defendants jointly liable for the full economic damages of RMB 18.5 million and for the entire RMB 1.5 million in enforcement expenses claimed by the plaintiff.
Court’s Reasoning on Reasonable Enforcement Expenses
In upholding the full claim for reasonable expenses, the SPC cited several reasons:
1) The plaintiff submitted valid invoices for notarization (RMB25,130), translation (RMB1,698), and product testing (RMB30,000), which were necessary for evidence collection;2) The legal fees were supported by formal billing documents in line with international legal billing practices, which were deemed sufficient to prove actual expenditure;3) The infringement involved complex and technical issues and was carried out in a concealed manner, requiring more extensive legal efforts than ordinary cases;4) The defendants’ repeated inconsistent and false statements during litigation directly increased the plaintiff's legal workload, justifying a higher amount of legal fees.
Based on these factors, the SPC found that the claimed legal expenses were reasonable and fully supported the plaintiff’s request.
Comment
This judgment sends a strong message to litigants in IP disputes: dishonesty during litigation not only undermines the defense but can also lead to heavier financial liabilities. The SPC’s recognition that false or misleading litigation conduct imposes additional burdens on enforcement reflects a pragmatic approach to ensuring procedural fairness and efficiency. For patent holders, particularly foreign ones navigating China’s legal system, this decision affirms that courts are willing to fully support legitimate claims for enforcement costs, provided the claims are well-documented and justified. It also underscores the importance of meticulous litigation strategy and documentation when confronting infringing parties that attempt to obstruct proceedings through bad faith tactics.