Guidelines for Ascertainment of Liability for Damages in Copyright Infringement (referred to as "Guidelines" hereafter) were released by Beijing Higher People's Court on January 11, 2005, with clear rules on compensation for copyright infringement. It is China's first specific criterion as such.

Damages have always been a big issue in lawsuits involving copyright infringement. Study by Beijing Higher People's Court shows that in the copyright infringement cases adjudicated by courts in, there has been significant disparity between the amount of damages claimed by the plaintiffs and that finally adjudicated by courts.

The above situation is mainly due to the fact that copyright owners usually have little knowledge of damage compensation in copyright action. Copyright owners always feel that the amounts of damages adjudicated by courts are way too less, not even enough to cover the costs for filing the lawsuits. In the end, while they may win the cases, they still lose money. The infringers as the losing parties, on the other hand, cry out that they get little profit but pay too much money for the damages. The public have no idea how a court reaches to the amount of damages. The recently released "Guidelines" may have the situation improved. The Guidelines, comprising 35 provisions, touch upon various issues such as the liability fixation for damages, rules and method of compensation, spiritual damage compensation, the determination of the standard amount of damages in relation to infringement, etc.

It is prescribed in the Guidelines that the amount of damages in infringement shall be determined by a people's court in such a manner that it will be capable of comprehensively and adequately making up for the loss a plaintiff has suffered from the infringement, as an embodiment of the "doctrine of full scale compensation". This is the basic doctrine of compensation in modern civil laws. It is also the doctrine of compensation adopted in China's General Principles of the Civil Law and intellectual property laws and is in conformity with the requirement of WTO under TRIPS. Remarkably, the Guidelines, for the first time, prescribe on spiritual damage compensation: namely, where the personal rights of a copyright owner or performer are infringed and the circumstances are so serious that such remedies as ceasing the infringing act, eliminating its ill effects, and/or making a public apology are not enough to placate the plaintiff for the spiritual damage he suffered, the defendant shall be ordered to pay the plaintiff spiritual damage compensation. The circumstances include "publishing a plaintiff' work without his permission, seriously against his will and causing negative effects to the reputation of and social assessment on the plaintiff; plagiarizing a plaintiff's work in large quantity with widespread influence, which results in bringing the defendant reputation; seriously distorting and tampering with other's work, and the like. The Guidelines also prescribe that the amount of spiritual damage compensation should be determined with numerous factors taken into consideration such as the degree of the defendant's fault, the manner of the infringement, the circumstances under which the infringement takes place, the extent the infringement affects, the profit the defendant gained out of the infringement and the defendant's capability of undertaking to pay the compensation, etc. The specific amounts of the compensation are generally no less than RMB 2,000 yuan and no more than RMB 50,000 yuan.