Translation of Draft Patent Law Available

Thanks to He Jing of the Anjie Law Firm, attached please find an unofficial line-by-line translation of the recently released Patent Law Amendments 2nd reading.   Comments are due August 16, 2020.

Some highlights of this draft:

Partial Design Protection

Article 2 adds language back in to allow partial design protection.  This is a welcome development.  Article 42 also maintains the earlier draft’s extension of the duration of the design patent to 15 years.

Patent Abuse

Article 20 clarifies that the abuse of patent rights to exclude or restrict competition constituting a monopoly shall be dealt with under the anti-monopoly law.  The AML is itself under revision.

Good Faith/Public Interest

Article 20 continues to require “good faith” in patent filings and the exercise of patent rights, an important concept borrowed from the Trademark Law revisions which is having an increasing substantive impact.  The limitation that patents shall not be “allowed to harm public interests” raises similar concerns to me to the recently proposed amendments to the Copyright Law, about the definition of “public interest.”

Pharma Issues – Patent Term Restoration and Linkage

The notices of the NPC regarding the draft law, state that pharma-related IP issues were drafted to implement ‘”trade agreement(s).”   These are reflected in proposed Article 42 which provides for patent term restoration.  This draft removes the requirement of the “synchronous” launching of marketing approval outside of China with approval in China in order for patent term restoration to be granted.

Article 75 also sets forth an outline for a patent linkage regime, and calls for the drafting of more detailed measures to further implement the provisions.  Under this proposal, the innovator challenges a generic applicant for marketing approval within 30 days of the announcement of the application.  If the patentee does not file a lawsuit, a generic company may also request a determination from the courts or patent office of non-infringement based upon the China Patent Information Registration Platform for Listed Drugs.  A court or administrative procedure on patent infringement should render its decision within 9 months.  This draft lacks an incentive provision for a generic to successfully challenge an innovator through granting of a first generic marketing exclusivity due to a successful challenge to the patents. This skeletal section is also drafted as an addendum to the statutory exemptions to infringement, which appears to be an awkward placement.

Damages and Liability

Joint liability of Internet service providers for patent infringement has been removed.

Minimum statutory damages of RMB 100,000 has also been removed.  Statutory damages are capped at 5 million RMB.  Quintuple punitive damages up to 5 times remain from the prior draft.   The statutory damage maximum increases to RMB 5 million (Art. 71). In addition to the continuing focus on increases in damages, this draft also continues the momentum for a larger role for patent administrative enforcement.

The extension of the statute of limitations to three years has been retained from the prior draft (Art. 74).

Several provisions address the proposed “open licensing” system (Chapter 6).

The draft also encourages a flexible remuneration system including “equity, options, and dividends” to enable inventors or designers to reasonably share the proceeds of innovation (Art. 16).

 

 

 

2nd Round of Patent Law Amendments Released for Comment

According to the NPC Observer and other sources, the NPC Standing Committee is now seeking comments to the second review draft of the  Patent Law amendments专利法修正案草案二次审议稿.  The official NPC comments released with the draft are here.  A longer report on the status of the revisions of the Patent Law dated June 28, 2020 is found here.  Comments are due by July 31, 2020.

In reviewing this draft, it may be worth referring to the prior draft including a translation provided by the Anjie law firm.

Please send in any translations that you have as well as any comments that you would like to share (chinaipr@yahoo.com).

Along with the recently proposed revisions to the Copyright Law, as well as drafts of recent judicial interpretations and further implementation of the Phase 1 Trade Agreement, this has been a busy season for law and policymaking in IP in China

The Patent Law will be discussed at the concluding webinar that Berkeley will be hosting July 15, 2020.  Prior to that, on July 8, 2020 there will also be a webinar on the Copyright Law including the proposed amendments.  Information on this successful series is available here.

Openings, Comings and Goings

The foreign diplomatic team on IP in China is once undergoing several mid-year changes.  Some of the prior changes were reported here, here and here.

There is now a cohort of foreign diplomats who had been hired to work exclusively on IP issues in China, which have included France, the United States, the EU (including its long-running IP Key project), UK, Australia Korea and Japan.  Generally, all these diplomats bring a focused, collaborative and more technical perspective on often politicized IP issues as compared to their counterparts in trade or economic sections at foreign missions in China.

Among the recent changes, David Bennett leaves his position as the first representative of IP Australia at the Australian Embassy in China and is replaced by Charlotte Trinh.  At the UK mission, Tom Duke left his position at the UK Mission to China as Minister Counselor for Trade and is now back in the UK, after service for seven years as IP Attaché.  Cerian Foulkes ably helped out in the transition.  The position is now held by Conor Murray.  I wish Charlotte Trinh, Conor Murray and other IP diplomats, their staff and alumni the very best.

The US team in China is now led by Duncan Willson in Beijing and Conrad Wong. Conrad previously served in Guangzhou and is now in his second tour in Guangzhou.  The former Attaché resident in Shanghai, Michael Mangelson is now Senior Counsel, China at the USPTO where he co-leads the China team with Elaine Wu.

Interested in becoming an IP diplomat for the USPTO? The US IP Attaché position at the consulate in Shanghai has reopened again.  Here is the job announcement.

Berkeley Webinar Recap

China Daily just published an article on June 23 on our June 17, 2020 webinar on patent eligibility. The publication also coincided with a blog by Prof. Adam Mossoff on opposition to Section 101 reform in the United States.  The webinar provided a counter-intuitive insight into important areas of patent law where China has been developing a more protective regime for patent-eligible innovations than the United States.

The next webinar on June 24, 2020, is on abusive trademark registrations.  This was a topic covered in the Phase 1 Trade Agreement and in Chinese legislative reforms of early 2019.  In my estimation, it is probably the IP issue most commonly encountered involving China’s IP regime by large and small US companies  – whether or not they have actually entered the Chinese market.  The program will be moderated by Prof. Eric Priest of the University of Oregon, with participation from the Chinese and US IP offices, as well as in-house and outside counsel.  Issues to be discussed include the successes in the Jordan/Qiaodan trademark dispute.  Registration information is here.

The Darlie Trademark And BLM

In light of the social activism in the United States, including Black Lives Matter (BLM), Hawley & Hazel, and its joint venture partner, Colgate Palmolive has recently decided to “review and evolve” their branding strategy for their famous-in-Asia Darlie trademark and logo for toothpaste and related products.  This long-established mark was originally called “Darkie” and the logo was modeled after Al Jolson in blackface. although the English name has since changed from Darkie to Darlie,and the logo is now of a man in a tophat,  In the Chinese language the brand is still called  黑人牙膏, literally “Black man toothpaste.” Wikipedia has a good summary of the origins of this nearly 90-year-old brand in Shanghai,  I will not post the imagery here.

Ironically, the decision to change the mark comes shortly after Hawley and Hazel had been granted a new registration for the Darlie mark in the United States (March 2020).  The application for that mark is dated July 5, 2018, just one year after the US Supreme Court decided Matal v. Tam, (June 2017), which invalidated, on first amendment grounds  Section 2(a) of the Lanham Act that prohibited registration of trademarks that “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” Based on the timing, one wonders whether the decision of Hawley and Hazel to pursue registration of the mark in the United States was based in part on door-opening provided by the precedent of Matal v. Tam,

The Darlie mark may now be viewed as a unique example of Sino-US trademark karma.  In only a few short months since that registration, due to the BLM movement, there has emerged ”a dramatically shifting landscape for racialized brands in the future,” as noted by my colleagues Angela Riley and Sonia Katyal in a recent op-ed published in the New York Times.

However, changing the mark is not fully in control of the owners.  Even if the mark were abandoned by its original owners, trademarks like these may yet survive in the hands of China’s large community of trademark squatters. According to press reports, Hawley & Hazel has been in litigation with “Guangzhou Heiren” (Canton Black Man) in China over trademark squatting (without intent to use) and copyright infringement for use of its Darlie logo and mark for pesticides, insect traps, refrigerator deodorant and toilet paper.

Darlie clearly faces several branding challenges that require “review” and “evolution.” The mark and brand have long been considered unacceptable by many.  It may now, however, be difficult for its original owners to control the various rights that have developed around it by squatters: trademark, copyright, and even an enterprise name (Guangzhou Heiren).  If it were to abandon these rights, these squatters may be able to continue to use these rights with impunity.

China, unlike the United States, has at least one added weapon in addressing these issues.  Its Trademark Law prohibits registration of marks “having the nature of discrimination against any nationality” or that are “detrimental to socialist ethics or customs, or have other unwholesome influences.” (Art. 10).  Lacking the restrictions of a Matal v. Tam, China might also consider how to appropriately support the aspirations of its owners to move away from a racialized brand by also stopping their continuing use by squatters.