The “Measures for the Computation of Illegal Turnover in Trademark Infringement Cases” has been implemented on October 14, 2024.

For intellectual property rights holders, it is very difficult to prove the amount of compensation, due to the intangible nature of intellectual property. Regarding trademarks, the “Trademark Law” stipulates three methods for calculating compensation: loss to the rights holder, gains derived by the infringer, and statutory compensation. In addition, the “Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Intellectual Property Infringement” and the “Opinions of the Trademark Office of the State Administration for Industry and Commerce on Several Issues Concerning the Protection of Service Trademarks” have further stipulated the calculation elements of gains derived by the infringer.

In practice, there are still some controversies or ambiguities regarding gains derived by the infringer, for example, which illegal costs can be deducted, and so on. On October 14th, 2024, the China National Intellectual Property Administration and the State Administration of Market Supervision and Administration jointly issued the “Measures for the Computation of Illegal Turnover in Trademark Infringement Cases”, which is expected to provide a basis or reference for the settlement of these disputes. Here is an introduction to the key points.

1. Different calculation methods for the products at different stages.

According to Article 5 and 6:

StageCalculation methods
Infringing commodities that have been soldThe value shall be computed as per the actual sales prices.
Infringing commodities that have not been sold·The average actual sales prices of the identified infringing commodities. ·If the average actual sales prices cannot be identified, the marked prices of the infringing commodities shall be applied. ·If the actual sales prices cannot be identified or the infringing commodities have no marked prices, the middle market prices of the infringed commodities during the infringement period shall be applied. ※ The calculation rules regarding the middle market prices: ·The guiding retail prices of the same kind of products announced by the infringed party. · If the guiding retail prices are not announced, they shall be determined according to the following methods:
  (1) Where there are multiple vendors selling the same kind of infringed products on the market, the middle market price shall be determined based on the several vendors’ average retail prices obtained by sampling; where there is only one vendor selling the said products, the middle market price shall be determined based on the vendor’s retail price; or (2) Where the same kind of infringed products are not sold on the market yet, the price shall be determined at the middle price of the same kind of infringed products on the previous market, or at the middle market price of the same kind of infringed products sold on the market but identical or similar to the infringed products in function, purpose, main material, design, configuration and other aspects. ·The middle market price, if it is difficult to determine in accordance with the provisions of the preceding paragraph, may be determined by the price appraisal agencies after identification. ·The statements of the parties concerned and the middle market price of the infringed product provided by the trademark holder may be taken as reference upon examination and verification of other related evidence.
Infringing commodities that have been manufactured but have not yet attached with infringing registered trademarksIf there is definite and sufficient evidence to prove that the commodities will infringe upon the exclusive rights to use registered trademarks of others, the value thereof shall be included in the illegal turnover.

2. Calculation methods for special circumstances.

CircumstanceCalculation methods
OEM限定条件：包工包料的加工承揽 具体方法： ·按照侵权商品实际销售价格计算违法经营额； ·侵权商品未独立计价的，按照其在包工包料加工承揽经营活动中的价值比例计算，无法区分价值比例的，按照被侵权商品的市场中间价格计算违法经营额。 Precondition: Contracting labor and materials for processing. The detailed calculation rules: ·The actual sales price of the infringing commodity. ·Where the infringing commodity is not independently priced, the illegal turnover shall be computed on the basis of the proportion of value of such commodity in the business activities of contracting labor and materials for processing; if it is impossible to distinguish the proportion of value, the illegal turnover shall be computed at the middle market price of the infringing commodity.
A commodity as a free gift· The actual purchase price or manufacturing cost of the gift. ·If it is impossible to determine the actual purchase price or manufacturing cost of the gift, or the gift is a non-standard commodity, the illegal turnover shall be computed at the marked price or the middle market price of the infringed commodity.
Renovated commodities· The overall value of the infringing commodity. ·Where a renovated commodity itself does not infringe upon other’s exclusive right to use a registered trademark, and only its parts or fittings infringe upon other’s exclusive right to use a registered trademark, the illegal turnover shall be computed based on the value of the infringing parts or fittings.

It should be noted that in a case reversely referral between administrative and criminal fields, where the administrative agency and the public security agency disagree in the determination of the illegal turnover, the determination may be made in accordance with these Measures and according to the investigation conducted by the administrative agency.