The following is a summary of recent and some near-term legislative developments:
According to its legislative plan (September 2, 2015), the State Council will accomplish the following during the balance of 2015:
- Completion: Revisions to the Regulations on Patent Agents (SIPO is drafting)
- Preparatory work for submission to the NPC or regulations by the State Council: Anti-unfair Competition Law (SAIC is drafting); patent Law (SIPO is drafting)
- Research projects: Antitrust Law (MofCOM, NDRC and SAIC are drafting); Regulations on Science and Technology Rewards (MoST is drafting); Copyright Law Implementing Regulations (NCA is drafting), Regulations on Protection of Olympic Symbol (Sports Administration and SAIC are drafting); Platform for Innovation in National Defense Regulations (State Administration for Science, Technology and Industry for National Defense [“SASTIND”] is drafting); Management of Military Engineering and Science Research (SASTIND is drafting); National Defense Patent Regulation (revision) (PLA General Armament Department, MIIT and SASTIND).
In addition, the new Advertising Law has been put into effect (September 1). Article 12 specifically regulates advertising that involves mentioning patents, including requiring permission of the patentee, and prohibiting mentioning patents that have lapsed, terminated or been invalidated. Enforcement authority is with SAIC. Falsely representing that a product is patented seems to have also caught the attention of Guangdong authorities, which also recently issued guidance on new thresholds for referral of “counterfeit patenting” cases from Guangdong IP authorities to criminal prosecutions.
On October 1, the Law on Promotion of Transformation of Science and Technology Achievements 促进科技成果转化法 (the STA Law) came into effect, after having been passed by the NPC on August 29, 2015. Article 45 of the STA Law requires minimum compensation for those who make important contributions to scientific accomplishments of their work unit in the absence of specific provisions in an agreement. These presumably include service inventions and are not limited to state enterprises. They may also extend beyond patents to trade secrets, software development, plant varieties and other “technical” IP matters. The STA Law specifies high minimums if an agreement is not negotiated and provides non-negotiable minimum compensation for “state-maintained research and development institutions and institutions of higher learning”. The regulations also do not identify how someone who has made a significant but not an “important contribution” is to be compensated, particularly as it often takes a team to make an invention.
The relationship between the STA law and proposed service invention regulations, which were made available for public comment earlier this year, now appear even murkier to me than before. The service invention regulations are not mentioned in the 2015 State Council legislative plan on IP, noted above. This may suggest that its consideration by the State Council is less imminent. On the other hand, the State Council may have been waiting for the passage of the STA Law to come into effect, as well as for further consideration of the imminent patent law revisions. This might seem more efficient, but for the fact that the State Council has often drafted implementing regulations while the superior law has still not been adopted. This is evident in the current drafting work of copyright law implementing regulations in the absence of finalization of proposed revisions to the copyright law.
As a higher ranking document, the STA Law should govern an inferior-ranking law, such as a regulation. If there is a conflict, China will also look at which enactment is more specific and which is later in time to interpreting the STA Law. Minister of Science and Technology Wan Gang had specifically made it clear at the US-China Innovation Dialogue that the then-proposed law permits freedom of contract and we hope that this perspective is maintained.
As can also been seen from the legislative agenda, China seems to be rapidly integrating defense related IP into its overall IP efforts. Another item in legislative work is dealing with advertising for patented products.
I think a better focus regarding patent passing-off might be on insuring that the public knows that there is no necessary product quality association with a patented product, particularly in a system where patent applications are heavily subsidized and most of the patents are not examined for substance. I find it hard to believe that Chinese consumers are looking up patent numbers and making their own assessments on the contribution of the patent to determine if a product has the product quality it desires.
The factual information in this article is drawn from the newsletter of the Beijing Intellectual Property Institute and other sources.