With the key function of deterring future infringements by punishing the past ones, the punitive damages system has three elements as its preconditions, i.e., the certainty of the right to be protected, the feasibility of judgment of infringement, and, the non-excessiveness of deterrent effects. Correspondingly, the uncertainty of intellectual property (IP) rights has led to the fundamental conflicts between the IP system and punitive damages, making it difficult to adopt fully the punitive damages into the IP system. While punitive damages may be applied to malicious IP infringements, it could hardly be applied to general IP infringements. Under the international IP rules, it is necessary to protect IP rights fairly and to reserve reasonable space for fair competition at the same time. Only a fair balance between IP rights and competition can produce the best innovation incentive effects. Punitive damages may cause excessive deterrence, break the balance between IP rights and competition, and hinder the realization of the primary objective of IP law. Categorized application of IP punitive damages is conducive to mitigating or avoiding the institutional risks of IP punitive damages. |