Since the first Trademark Law was enacted in China in 1982, the Chinese intellectual property rights (IPR) system has undergone significant changes in both the design of the legislation and its enforcement. In this article, we analyze the evolution of IPR legislation and enforcement in China. To this end, we illustrate the evolutionary changes of the Chinese IPR system and analyze the changes introduced in four revisions (1992–1993, 2000–2001, 2008–2013, and 2019–2020). Our analysis shows that Patent Law, Trademark Law, and Copyright Law have been substantially enhanced, especially since 2000, when China improved its IPR system to comply with the TRIPS Agreement and join the WTO, and especially the most recent amendments of these three IP Laws. We discuss the number of IPR infringement cases handled by both relevant administrative authorities and courts to analyze IPR enforcement in China. Results indicate that the development of IPR protection enforcement followed the improvement of relevant IPR laws. The two revisions introduced after 2008, changes in the Chinese IPR system, and an increasing number of IPR infringement cases handled by relevant authorities also suggest the willingness of the Chinese government to further enhance its IPR protection.

By conducting field research and analysing judgments delivered in Beijing courts from 2004 to 2011, we find that the popular notion held by China's trade partners of the inadequacy of intellectual property protection is only partly supported by the empirical evidence. The likelihood of winning lawsuits is higher for foreign than domestic plaintiffs and the extremely low damages ruled by Chinese courts are due to particular causes. Courts lack consistent methods to calculate incurred losses in intellectual property right (IPR) infringements and consequently routinely apply the statutory damages whose upper limit is restricted by legislation. Efforts by Chinese legislators to enhance compensation by lifting the upper limit of awardable statutory damages in the Third Amendment of Chinese Patent Law (2008) did not seem to have an effect on our sample. Chinese policymakers should instead focus on the cause of the issue by providing more implementable guidelines for courts to calculate losses. Courts need to develop applicable conventions for calculating damages, based on objective criteria of how much compensation ought to be payable, which is also the basis of calculating reasonable statutory damages. Thus, the new provision of the “right of information” on pirated goods proposed by the ongoing Fourth Amendment provides a significant weapon to combat counterfeiting.

Many studies agree that a weak intellectual property right (IPR) legal system likely reduces innovation or creation; they also predict that increasing intellectual properties (IPs) in developing countries will automatically lead to local needs for stronger formal protection. However, the situation is found to be more complex in China. With a focus on the use of IPs and relevant protection mechanisms in China, this study points out that many companies acquire IPs for purposes that do not depend on their enforcement; many companies have informal ways of protecting their IPs without resorting to court enforcement. Both the alternative functions and the alternative enforcement mechanisms are shaped by industrial characteristics, especially in four aspects: technological features, administrative regulation, market characteristics, and network structure. Based on studies of different industrial sectors in China, this article develops a general framework for analyzing the role of IPRs in industrial practice.