On October 17, 2020, the China Patent Law was revised at the 22nd meeting of the 13th Standing Committee of the National People's Congress, which will take effect on June 1, 2021.
In an effort to bring China’s patent law more in line with international standards and to modernize its laws to better protect patent rights, China Patent Law has made some significant changes. Here are 10 notable ones.
1. Introduction of partial design patents
Partial design protection, a staple of international patent practises, is introduced as a supplement to overall design protection in the new China Patent Law. Currently, the China Patent Law does not protect the patentability of partial designs, unless the partial designs are independently registered. With the new amendments, this would eliminate these limitations and hindrances by introducing the patentability of partial designs. Partial designs with independence and completeness, meaning they can be independently isolated and existed from the patent, will be eligible for patentability.
2. Design patent term extended to 15 year
The term of design protection has been extended from 10 years to 15 years. This may be a signal China is preparing to join the Hague system, which requires a minimum of 15 years protection term for member countries.
INCREASED PATENT DAMAGES
3. Increase in statutory damages
The cap of Statutory damages have been increased from 1 million RMB to 5 million RMB. Statutory damages usually apply when actual damages are not proven.
4. Increase in punitive damages
Punitive damages have been increased to up to five times of actual damages or ill-gotten profits as punishment for serious and deliberate infringement.
5. Pharmaceutical patent term extension
To compensate the protection term of pharmaceuticals lost during the regulatory approval process when a drug cannot be marketed, the protection term can be extended. The compensation time cannot exceed 5 years and the total effective patent term cannot exceed 14 years.
6. Preliminary pharmaceutical patent linkage system
The patent linkage provision provides that a patentee or interested party can initiate judicial or administrative infringement proceedings against a party, seeking a drug marketing authorization, for judgement as to whether the drug falls within the scope of patent protection. China’s pharmaceutical regulatory body can make decision on whether or not to suspend the marketing authorization approval process based on the judgement from the court or local patent office. CPL detailed guidelines on the patent linkage system is yet to be revealed as of the time of this article.
OTHER SIGNIFICANT CHANGES
7. Term extension due to delay in patent examination
When the duration of the patent examination is considered unreasonably long, the patentee can request an extension on the term for compensation. For invention patent application, an extension can be granted for pending application of 4 years from the filling date or more than 3 years from the time of request for substantive examination. Extension will not be considered for delays caused by the applicants themselves.
8. Evidence Disclosure Obligation relating to damage claims
Under the new China Patent Law, burden of proof is not solely placed on the patentee (plaintiff). Preliminary evidence disclosure obligations can now be ordered by the judge to the defendant to disclose accounts and relevant information for the determination of damages. If the defendant refuses or provides false information, the judge will have the discretion to decide damages based on the patentee’s claim.
9. Open license system
The open license system will provide patentee’s the choice to declare and records its intention to “open license” its patent to any entity or individual with the China Patent Office. The license fee and terms will be on public record. During the open license period the annual patent filing fee might be waived.
10. Administrative protection of patents
Patent protection in China is implemented on a dual-track system for patent infringement disputes. The patentee can file a lawsuit in the People’s Court or request a local IP administrative office handle the dispute. Under new CPL, IP administrative offices will have greater authority to deal with nation-wide infringement cases and providing increased investigative rights.
It has been 12 years since patent laws were updated in China. With the newly revised Patent Law in protection, application and authorization, the objective is to more effectively protect the legitimate rights and interest of patentees and encourage China’s own innovations. However, there still are concerns and questions on the actual implementation and use of discretion by the authorities when it comes to judgments and enforcements.