Accurately identify the subject identity of ＂professional counterfeiters＂ and establish a grading application system of punitive damages

□ Wang Zhe

China’s punitive damages system first appeared in Article 49 of the Consumer Protection Law in 1993, which stipulated the "double indemnity" rule of goods or services fraud, and this "refund for one" rule quickly created a large number of "professional counterfeiters" and gave birth to the phenomenon of "professional counterfeiting". The revised Consumer Protection Law in 2013 increased the amount of punitive damages, and the number of counterfeiters increased dramatically, showing a trend of professionalism. The emergence of "professional counterfeiters" has played a positive role in enhancing consumers’ awareness of rights, encouraging people to use punitive compensation mechanism to crack down on illegal and infringing acts of operators. However, with the rapid increase of the number of "professional counterfeiters", its characteristics of "profit-making" and "disorder" have also brought many negative effects, such as disrupting the business environment and occupying judicial resources. At the same time, the judgments of local courts on such cases are not the same. The fundamental reason is the different understanding of whether "professional counterfeiters" can be used as consumers and whether "professional counterfeiters" can apply punitive damages system. Therefore, in order to solve the above problems, we should accurately identify the main identity of "professional counterfeiters", standardize the application of punitive damages system to "professional counterfeiters" and establish a graded application system of punitive damages.

First of all, as to whether "professional counterfeiters" belong to consumers, the author thinks that we should comprehensively consider the meaning of consumers, and judge whether they buy or use goods or receive services for their daily needs or for re-trading. We should not deny their identity as consumers just because they have the purpose of making profits. According to the law on the protection of consumers’ rights and interests, "consumers’ rights and interests are protected by this law when they buy or use commodities or receive services for their daily consumption". It can be seen that as long as goods are purchased and used for daily consumption, they belong to consumers and are protected by the Consumer Protection Law. Living consumption refers to various consumption processes that people carry out to meet material and cultural needs, and the corresponding concepts are activities for production and consumption, such as purchasing raw materials by enterprises. Therefore, judging whether a subject is a consumer should be based on the purpose of buying goods or receiving services. If the buyer buys for another transaction, it is not a "consumer". In addition, in the process of amending this law, it was suggested that the "professional counterfeiters" who bought fakes knowing them and then made claims should be excluded from the application of this law. Others suggested that it should be clearly stipulated that "for the purpose of making profits" or "for the purpose of professional counterfeiting" does not belong to the scope of "for the needs of daily consumption". In the end, such suggestions were not adopted, which shows that legislators did not deny the consumer identity of "professional counterfeiters" when revising the law.

Secondly, the emergence of "professional counterfeiters" is in line with the purpose of establishing a punitive compensation system in the consumer field. The punitive damages system stipulated in Article 49 of the Law on the Protection of Consumers’ Rights and Interests before the amendment confirmed the benefits of consumers’ rights protection, greatly mobilized the enthusiasm of consumers to launch legal struggles with treacherous operators, and cultivated a large number of smart consumers like Wang Hai. Some local people’s courts have also made some judgments involving punitive damages according to this provision. However, this provision still has limitations in stimulating consumers’ interests, and the sanctions against commercial fraud are still insufficient. In order to strengthen the protection of consumers’ legitimate rights and interests, and to combat and punish the malicious fraud of operators, in the process of amending the Consumer Rights Protection Law, all parties generally called for further strengthening the punitive damages system, increasing the amount of punitive damages and increasing the punishment for fraud. It can be seen that the main purpose and function of the Consumer Protection Law at the beginning of establishing punitive damages system is to punish illegal businesses, increase the illegal cost of illegal businesses, mobilize the enthusiasm of consumers in legal struggle with treacherous businesses through interest incentives, and encourage consumers to defend their rights through litigation and other means to make up for the lack of public law enforcement due to the limited public resources. In addition, if the probability and illegal cost of an illegal act are relatively low, it is easy to form negative incentives and it is difficult to effectively curb illegal acts in this field. Based on this, it is necessary to support "professional counterfeiters" who strictly carry out counterfeiting and rights protection within the scope of law.Support this special group of "consumers" to defend their rights, so as to form a governance structure in the consumption field of co-construction, co-governance and sharing, and their legitimate claims cannot be rejected just because they "know and buy fakes" or have the purpose of "making profits".

Finally, although "professional counterfeiters" belong to consumers and their existence conforms to the purpose of establishing punitive damages, we should standardize the application of punitive damages to "professional counterfeiters", establish a grading application system of punitive damages, gradually reduce the profit-making space of "professional counterfeiters", and maximize the elimination of the negative effects brought by "professional counterfeiters" while giving full play to their positive role, so as to realize the relationship between protecting consumers’ rights and optimizing the business environment. At present, the punitive damages in the field of consumer rights protection in China are calculated by the multiplier method, that is, the appropriate "base" is selected from the existing compensation and multiplied by the fixed "multiple" within the legal scope to get the specific amount of punitive damages. The author thinks that because the "multiple" of punitive damages in the field of consumer rights protection is fixed, there is no room for discretion in this part, so the "base" of punitive damages can be calculated according to general consumption and special consumption. Specifically, for food, medicine and other special consumption areas that affect consumers’ health and life safety, the people’s court should insist on the protection of food and drug safety as the primary value orientation in handling food and drug safety disputes. Whether the plaintiff is a "professional counterfeiter" or not, it should be based on the principle of strengthening compensation, and punitive compensation should be paid to producers or operators based on the actual price or loss to meet the people’s needs for a better life. In the field of ordinary consumption, the court should strengthen active justice and deal with "professional counterfeiters"The punitive damages system should be carefully applied to the profit-making behavior, and the amount of punitive damages should only be calculated based on the actual living consumption demand recognized by ordinary people, thus narrowing the profit-making space of professional counterfeiters and preventing some producers and operators from "being too small and too heavy". In addition, punitive damages should be applied to the repeated purchases of small commodities in special consumption fields such as food and medicine, but the total price of all commodities purchased by professional counterfeiters should be used as the calculation "base" of punitive damages.