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China’s New Anticounterfeiting Landscape

Strategic Moves for Rights Holders

More Chinese courts are simultaneously hearing civil damage claims during criminal trials against counterfeiters. Here, Ron Tsi and Sue Gui of Chang Tsi & Partners describe how, for brands operating in China, understanding this shift means taking control of enforcement actions—and having the tools to win.

I. From Quantity to Quality: The New Logic in Chinese IP Enforcement

In March 2026, China’s Supreme People’s Court and Supreme People’s Procuratorate announced that the criminal case volume of 2025 had dropped 12.8 percent year‑on‑year, hitting its lowest level this century.

Meanwhile, the State Administration for Market Regulation reported nearly 580,000 enforcement actions against infringement and counterfeiting—37,000 of which were trademark and patent cases—an upward trend.

One number goes down, the other up: enforcement has shifted from “quantity‑driven” campaigns to “quality‑driven” precision work.

A major part of this change is the curtailment of so‑called “remote‑ocean fishing,” where officials pursue enforcement cases in distant regions or outside their jurisdiction. In recent years, China’s Supreme People’s Court has strictly limited cross‑regional criminal case handling.

The result is that IP criminal prosecutions and arrests fell 11.7 percent and 13.9 percent, respectively. But fewer cases doesn’t mean weaker protection—it means a return to judicial rationality. Jurisdiction can no longer be manipulated; case quality now decides outcomes.

Conviction standards have also been recalibrated. In April 2025, China’s Supreme People’s Court issued new judicial interpretations that adjust thresholds in both directions:

Lower thresholds for certain infringements: For example, in cases involving the sale of infringing copies, the threshold for “illegal gains in a relatively large amount” was reduced from RMB 100,000 to RMB 50,000—a clear signal of tougher enforcement.
Higher evidence requirements: Courts now demand complete, coherent chains of evidence and reliable technical assessments, ending the days when seizing “a few counterfeit goods” could trigger a criminal filing.

In short, conviction thresholds have dropped while evidentiary thresholds have risen, filtering out weak cases and ensuring only strong ones survive.

II. Breakthrough: Incidental Civil Action in Criminal Proceedings

If these changes redefine the “entry” standards, an equally important shift is happening at the “exit” stage of enforcement. Traditionally, rights holders had to win in the criminal case and then file a separate civil action to recover damages, adding time and the cost of legal expenses.

Now, in advanced provinces such as Zhejiang, Jiangsu, and Guangdong, courts are accepting incidental civil actions in criminal proceedings, allowing civil damages claims to be heard simultaneously with the criminal trial.

This innovation significantly reduces costs and shortens the time needed to recover losses. Below are two examples from cases our firm has handled.

"Conviction thresholds have dropped while evidentiary thresholds have risen, filtering out weak cases and ensuring only strong ones survive."

- Sue Gui | Chang Tsi & Partners (China)

Case 1: OREO in Wuxi

Between September 2022 and February 2023, three individuals produced counterfeit OREO biscuits in a factory in Shantou and sold them via online shops in Jiangsu Province.

After the police in Wuxi initiated criminal proceedings in March 2023, the brand owner entrusted us to file an incidental civil claim during the prosecution stage. On January 18, 2024, the Huishan District Court:

Sentenced the defendants to prison terms ranging from three years to three years and six months and fined them RMB 50,000–90,000 each;
Confiscated RMB 107,000 in illegal profits; and
Ordered the defendants to pay joint compensation of RMB 280,000 and publish an apology.

The brand paid no civil litigation fees and recovered damages far higher than typical civil awards. The case was selected as one of the top 10 IP protection cases in Wuxi and Beijing, becoming a benchmark nationwide.

Counterfeit Packaging Produced by Criminals

Media Report About the OREO Case

Case 2: Counterfeit Compressor Oil

In 2025, a global leader in industrial and fluid solutions discovered large‑scale counterfeiting of its compressor oil and lubricant products in China. A Shandong company, acting under the direction of its controller, blended its own oil, filled barrels with the brand’s trademark, and sold them. The total case value was RMB 12 million. The rights holder, together with other brands, reported the activity to the police in Quzhou, Zhejiang Province.

During the prosecution review stage, the rights holder entrusted us to file an incidental civil claim for RMB 770,000 in losses and expenses. The court upheld criminal liability and facilitated a civil settlement within the same proceeding.

While this approach is currently common only in certain provinces, its demonstration effect is clear: one procedure, two outcomes—criminal sanction and civil relief.

III. Rights Holders’ Strategy

With higher case quality now delivering faster and more decisive judgments—and incidental civil actions becoming feasible—rights holders need to shift their enforcement from chance‑driven to expertise‑driven.

1. Procedural Tactics:

Start with administrative action to preserve evidence: Administrative authorities can rapidly inspect sites, seize goods, and question suspects. These findings can form a solid basis for a subsequent criminal case.
Follow with criminal proceedings to apply maximum pressure: When the value meets criminal thresholds, push for formal transfer from the administrative authority to the police, in line with China's 2025 Draft Trademark Law Amendment.
Use incidental civil actions to consolidate outcomes: In provinces with mature practice, file civil claims during prosecution to resolve both criminal liability and civil damages in one single proceeding.

2. Geographic Strategy:

Concentrate on hotspots: Focus on provinces with mature incidental civil action practice and build working ties with local enforcement and courts.
Adapt elsewhere: Where incidental civil action is not yet common, combine administrative and civil measures flexibly.

3. Build Up an Enforcement “Toolbox”:

Civil litigation: For high‑value damages, consider asset-preservation measures and punitive awards.
Administrative enforcement: Use administrative actions as a quick deterrent in public marketplaces.
Platform complaints: Use e‑commerce notice‑and‑takedown systems with regular monitoring.
Criminal action with the incidental civil claim: For source‑level, high‑value cases, assess viability of incidental civil action to seek compensation.

Conclusion

China’s IP enforcement is evolving from broad, reactive campaigns to precise, integrated action. For rights holders, this shift creates a clear opportunity. Those positioned to turn enforcement into a competitive advantage—and to protect their rights more effectively—will:

Build robust, well‑documented enforcement chains;
Use procedural interlinks effectively;
Allocate resources to key regions; and
Deploy a diverse enforcement toolkit.

This is especially true as cross-regional enforcement abuses are curtailed, proof thresholds are heightened, and incidental civil actions in criminal proceedings move from pilot to practice.

Ron Tsi is a partner at Chang Tsi & Partners. He can be contacted at rontsi@changtsi.com.

Sue Gui is a partner at Chang Tsi & Partners. She can be contacted at suegui@changtsi.com.