The “Judicial Interpretation of Punitive Compensation for Intellectual Property Infringement” has specified the requirement of Article 1185 of the Civil Code concerning the “serious circumstances” of infringement, but it is still necessary to conduct an in-depth theoretical interpretation and revision. The concept of “circumstance” transplanted in the field of literature should be able to objectively describe the conflict of interests between relevant parties in the legal context, and the determination of “serious circumstances” should be conducive to the realization of the compensation, punishment and prevention functions of the punitive compensation system for intellectual property infringement. The “circumstances” of intellectual property infringement stipulated in the current judicial interpretations, including methods, times, region, scale, consequences of the infringement, demand the supplemental and detailed interpretation. The behavior of the infringer in the lawsuit should not be listed as a consideration factor in judging whether the circumstance is serious. “Serious circumstances” and “maliciousness” together constitute an applicable element of punitive compensation for intellectual property infringement, the former is an objective requirement, and the latter is a subjective requirement. Although the consideration factors of the two may partially overlap, the differences are more. Besides, “serious circumstances” should be judged first. “Serious circumstances” have a certain impact on the compensation base and multiple of punitive damages of intellectual property infringement.