Maximum compensation paid out in trademark infringement cases would double under a draft amendment of the law covering this announced yesterday.
At a news conference in Beijing, Lu Zhihua, deputy director of Trademark Office of the State Administration for Industry and Commerce, said the ceiling for payments would be increased from 500,000 yuan (US$79,216) to 1 million yuan.
Draft amendments to the Chinese Trademark Law also adds to types of trademark rights and clarifies the use of trademarks, said Lu.
This is part of efforts by China to tighten copyright protection.
Despite the proposed doubling of compensation, Shanghai lawyers say this is still too low.
"One million yuan is still far from enough to deter infringement and make up victims' losses," said Liu Chunquan, a Shanghai lawyer specializing in intellectual property rights.
"In many cases, trademark right holders win their suits but the compensation doesn't cover losses. And their losses are infringers' profits," Liu said.
In 2006, five global name brands - Burberry, Chanel, Gucci, Louis Vuitton and Prada - each won 20,000 yuan compensation following a joint lawsuit against the Beijing Xiushui Clothing Company and five tenants in the company's wholesale market in the Chaoyang District of Beijing.
The market, known as Silk Street Market, is popular with foreign tourists and expatriates.
In 2007, outdoor product company The North Face Inc also won a trademark infringement lawsuit against the Beijing company, after large quantities of fake The North Face goods were found on sale at the market.
Although the US firm had demanded a the maximum compensation of 500,000 yuan, the court ordered the market owner to pay 40,000 yuan - less than a tenth of the sum demanded.
Currently, there are three ways in Chinese Trademark Law by which judges can decide how much copycats should pay to trademark owners.
One is to calculate the infringers' profits, while a second considers a victim's losses.
"Both are not impractical as infringers will not reveal their real margins in public financial reports and seized counterfeit products are usually of poor quality and value when translated into money," said Liu.
When neither methods is applicable, a court will make a ruling based on evidence.
"The draft amendment is progress, but not every victim will receive 1 million yuan compensation," Liu said.
Maximum compensation paid out in trademark infringement cases would double under a draft amendment of the law covering this announced yesterday.
