Shenzhen in South China's Guangdong province will roll out a new set of intellectual property protection regulations in the near future, with the draft expected to be submitted to the standing committee of the city's legislators at the end of this month for preliminary review.
Once released, it will be the first set of comprehensive IP protection regulations in China, local media reported.
The highlight of the draft regulations is that it sets a floor limit for damages in IP infringement cases, said Ai Yong, a member of Shenzhen's political consultative conference, the city's top political advisory body.
In a patent or copyright infringement case, the minimum damages would be 100,000 yuan ($14,470), and in a trademark case, violators found guilty will need to pay at least 50,000 yuan in damages, according to the draft.
The compulsory minimum compensation stipulated in the regulations is three times higher than the average granted by the courts in Shenzhen, Guangzhou Daily quoted Ai as saying.
Punitive damages, equivalent to three times the losses due to violations, are also added to the draft, for cases of malicious and repeated infringements, Ai said, adding that it will make both rights owners and violators show more respect for IP.
Jiang Xiaoxi, a local court judge, told Guangzhou-based Nanfang Daily that the authorities need to make it clear in what circumstances the punitive damages will be awarded.
More specific provisions need to be given, such as the assessment of the severity of the infringement and the standard of proof, Jiang said.
"Enforcing the most stringent IP protection is, in essence, to keep businesses motivated to innovate and maintain a mechanism for fair competition," she said.
"Especially with the emergence of the new technologies and innovated business modes ... legislative and judicial engagement (with IP disputes) needs a more prudent approach, considered from the perspectives of the long-term interests of consumers, fair competition and drive for innovation."
Among the most dynamic cities in terms of innovation in China, Shenzhen has ranked top of the country by the number of international patent applications filed via the Patent Cooperation Treaty for 14 consecutive years.
Government data showed that more than 20,000 PCT filings were from the city, and the number of Chinese patent applications filed in the city topped 60,000 last year.
Home to both big names, including telecoms giant Huawei and internet colossus Tencent, and a great number of small yet highly innovative businesses, Shenzhen has established a reputation as an IP powerhouse.
In the first five months of this year, patent applications from the city increased 34.72 percent year-on-year to 85,700.
Nearly 57,900 new patents were granted to local filers during the same period, a 63.57 percent surge from a year ago.
Amid a bustling market environment, Shenzhen has seen a rapid growth in IP disputes in recent years.
In 2017, enforcement officials at the Shenzhen Market and Quality Supervision Commission conducted nearly 900 investigations into IP infringements and fined violators more than 5.74 million yuan for counterfeiting.
Shenzhen police investigated roughly 390 IP cases and the courts across the city handled more than 28,000 IP cases last year.