Recent changes to Chinese patent law aim to promote the enforcement and application of patents, further bringing Chinese law in line with international practices. On October 17, 2020, the Chinese legislature accepted a revision to the Patent Law of the People's Republic of China, which will come into effect on June 1, 2021.

 

The change to Chinese patent law expands the scope of design protection, adding provisions about novelty of invention patents and specifying the time limit to claim priority in invention and utility patent applications under special conditions. It also extends the statute of limitations for patent infringement and the protection term of design patents.

 

The revision set forth a supplementary extension to the protection terms of pharmaceutical patents and added the mechanism of patent ‘open licence’. It facilitates pre-litigation actions against patent infringement, adds measures at the court’s disposal and gives patent holders more rights in infringement disputes.

 

The revision also lifted the compensation cap for patent infringement, clarified the procedure for handling drug-related patent infringement disputes under marketing licence review and provided for the infringing party's obligation to assist in determining the amount of compensation.

 

It emphasizes the principle of good faith and opposed patent monopolies. It also changed the name of the national agency responsible for patent re-examination and invalidation of patents, enabling patent administrative agencies at national and local levels to directly handle infringement cases of national or local influence.

 

Finally, the revision stipulates the promotion of patent public services and introduces a special licence for patent enforcement as well as the incentives for institutional, corporate and individual inventors.

 

The details are set out below:

 

Design patent

 

(a) The scope of protection has been expanded to include the protection of "partial shapes of products".

 

Invention patent

 

(a) Novelty of an invention application can be retained, if the invention was first disclosed six months prior to the filing date due to national emergency or public interest;

 

(b) "Methods for the transformation of atomic nuclei" have been listed as non-patentable;

 

(c) The employer holds the right to apply for and dispose of an invention of an employee in the course of their employment.

 

Time limit

 

(a) A time limit has been added to the claim of priority: applicants claiming priority for an invention or utility model shall file a copy of the first patent application "within sixteen months of the filing date of the first application";

 

(b) The statute of limitations has been from 2 years to 3 years;

 

(c) The protection term for design patent has been extended from 10 years to 15 years;

 

(d) A supplementary extension to protection term of some pharmaceutical patents has been set forth: to compensate for time lost in the substantive examination of some invention patents; to compensate for time lost in the marketing review and to approve some new medicine-related inventions, with the supplementary extension not exceeding 5 years and the total patent protection term for drugs on the market not exceeding 14 years.

 

Open licence mechanism of invention patent

 

(a) Provisions have been added regarding open licence declaration of invention patents;

 

(b) Provided that such a declaration concerns a utility model or design patent, a patent evaluation report shall be submitted. This declaration can be withdrawn by public announcement;

 

(c) The renewal fees for open-licence patents have been lowered;

 

(d) The licence fee of open-licence patents is now subject to negotiation (only general licences can be granted thereafter;

 

(e) The procedure to handle disputes on open licenses has been specified: where such a dispute arises, both parties shall first resort to negotiation and then to mediation by Patent Administrative Department of the State Council or to court litigation.

 

Pre-litigation preservation

 

(a) This has lowered the barrier in requesting pre-litigation preservation by eliminating the previous requirements on assurance and added a provision about pre-litigation property preservation;

 

(b) It has extended the scope of patent enforcement by allowing enforcement against "conduct that impedes the implementation of the patent rights";

 

(c) It has expanded the scope of court injunctions - the courts may order an injunction to forbid or perform certain acts.

 

Patent infringement

 

(a) More initiative has been given to the patent holder: in an infringement dispute, the patent holder, interested parties or alleged infringers can submit a patent evaluation report on their own initiative; in the case of a counterfeit patents dispute, the patent holder can request the Patent Administration Department to investigate the counterfeits and impose seizure;

 

(b) The standards of compensation have been raised: the compensation standard for patent infringement has been adjusted to reflect "the actual loss of the patent holder or benefit gained by the infringer as a result of the infringement".

 

The amount of compensation for intentional infringement of patent rights has also been specified: in case of a severe infringement, the compensation awarded shall range from the amount determined by the statutory method to five times of that amount; where the amount of compensation can hardly be determined by the statutory method, the compensation that the court may award to the patent rights holder has increased, from the previous level of 10,000 CNY to 1,000,000 CNY to the current level of 30,000 CNY to 5,000,000 CNY; the fine for counterfeited patent products has been raised from 4 times to 5 times of the illegal gains; where there are no illegal gains or where the amount of illegal gains is less than 50,000 CNY, the fine that can be imposed by the patent enforcement department has been increased from 200,000 CNY to 250,000 CNY;

 

(c) The procedures for handling patent disputes concerning new drugs under marketing licence review have been clarified;

 

(d) The infringer is now obliged to cooperate: The court may order the infringer to assist in determining the amount of compensation by providing account books, documents and other information of relevance.

 

Unfair competition

 

(a) This stresses the principle of good faith and forbids the abuse of the patent monopoly to the detriment of public interest or the interests of others.

 

Functions of the State Administrative Department

 

(a) The title of administrative body responsible for patent re-examination and invalidation has changed: The administrative body to re-examine and invalidate patent was changed from the "Patent Re-examination Board of the Patent Administrative Department of State Council" to the "Patent Administrative Department of State Council";

 

(b) This enables the direct participation of Patent Administrative Department: The Patent Administrative Department of State Council can choose to directly handle patent disputes of national relevance; local Patent Administration Departments can choose to combine several disputes concerning the infringement upon the same patent into one and directly handle dispute within their administrative region, or they can request the Patent Administration Departments at a higher level to handle the across-regional patent infringement cases.

 

National support

 

(a) The national administrative department has been required to reinforce the public service system for patent information, to provide patent databases and to promote the dissemination and use of patent information;

 

(b) New provisions on special licence for patent enforcement have been introduced, requiring the Patent Administration Department of State Council and of local governments to strengthen public patent services and to promote patent enforcement and application;

 

(c) Incentives for institutional, corporate, and individual inventors have been encouraged. For instance, property right incentives for institutions or corporations and equity, waiver and dividend incentives for individual inventors.

 

Comment

 

By expanding the scope of patent protection and strengthening it, we can reasonably expect the rights and interests of patent holders to be better protected, the order of business to be maintained, and innovation in China to flourish.

 

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