On October 30, 2024, the National Intellectual Property Administration and the State Administration for Market Regulation jointly issued the "Methods for Calculating Illegal Business Turnover in Trademark Infringement Cases" (hereinafter referred to as the "Methods"), which were officially implemented. This release of the "Methods" systematically sorted out and summarized the useful experiences and practices in calculating illegal business turnover in trademark infringement cases over the years.

    The "Methods" consist of nineteen articles, providing detailed and clear provisions on issues related to the calculation of illegal business turnover in trademark infringement cases. According to the "Methods," the calculation of illegal business turnover should follow the principles of legality, reasonableness, objectivity, and fairness. Illegal business turnover refers to the total value of infringing goods involved in the trademark infringement behavior or the operating income generated from the infringement. For infringing goods that have been sold, their value is calculated based on the actual selling price; for infringing goods that have not been sold, the value is calculated based on the actual average selling price of the infringing goods that have been identified; if the actual average selling price cannot be determined, the value is calculated based on the marked price of the infringing goods; if the actual selling price cannot be determined or the infringing goods have no marked price, the value is calculated based on the market median price of the infringing goods during the infringement period. This provides a clear basis for determining the value of infringing goods under different sales conditions during the enforcement process.

    Furthermore, in case where goods have been manufactured but have not yet been labeled with infringing registered trademark, if there is concrete and sufficient evidence proving that the goods will infringe on the exclusive rights of others' registered trademarks, their value should be included in the illegal business turnover. This provision effectively fills the regulatory loopholes that may have existed in the past and further strengthens the crackdown on trademark infringement.

    In some special circumstances, the "Methods" also provide clear calculation standards. For example, if goods that infringe the exclusive right to use a registered trademark are used in a processing and contracting business activity with all materials and labor included, the illegal business turnover should be calculated based on the actual sales price of the infringing goods; if the infringing goods are not priced separately, the value should be calculated based on the proportion of value in the subcontracting activities, and if the value proportion cannot be distinguished, the illegal business turnover should be calculated based on the market median price of the infringing goods. If free gifts infringe on the exclusive rights of others' registered trademarks, the illegal business turnover should be calculated based on the actual purchase price or manufacturing cost of the gift; if the actual purchase price or manufacturing cost of the gift cannot be determined, or if the gift is a non-standard product, the illegal business turnover should be calculated based on the marked price or the market median price of the infringing goods.

    Additionally, the "Methods" also provide regulations on determining the illegal business turnover in cases of reverse transfer of criminal cases. In cases of reverse transfer of criminal cases, where administrative agencies and public security agencies have different opinions on the determination of illegal business turnover, the determination shall be made based on the investigation of the administrative agency according to the provisions of these Methods. This provision ensures consistency and coherence in the determination of illegal business turnover between different law enforcement stages and departments.

    The implementation of the "Methods" has had a significant impact on the rights protection of the parties involved. For trademark owners, the certainty of rights protection has been greatly enhanced, reducing the cost of rights protection and increasing the success rate of rights protection. For parties accused of infringement, on one hand, the "Methods" compel them to pay more attention to compliance with trademark laws and regulations. On the other hand, if the parties do commit infringement, the "Methods" also provide a clear standard for determining liability, so that they can be more aware of  the consequences of their actions when facing with accusations and actively negotiate and settle with the rights holders.

    The implementation of the "Methods" not only provides specific and normative operational guidelines for calculating illegal business turnover for trademark enforcement agencies, resolving a series of disputes and prominent issues, but also creates a transparent and predictable environment for intellectual property protection for business entities. It is believed that with the strong promotion of the "Methods," the level of trademark intellectual property protection in China will be further enhanced, providing solid support for the implementation of the innovation-driven development strategy.