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IPO’s Comments on Draft Amendments to Patent Law Implementing Regulations

On January 14, 2021, IPO submitted comments to the China National Intellectual Property Administration on its Recommendations for Amendments to the Implementing Regulations of the Patent Law (Draft for Comment) 《专利法实施细则修改建议(征求意见稿)》 IPO’s comments included suggestions regarding: foreign filing licenses; mandatory patent contract recordals; industrial designs;  “good faith” patent prosecution obligations; inventor remuneration; pharmaceutical issues; and other areas.  Here are some highlights:

Foreign filing licenses (FFL’s): IPO suggests that patent FFL’s be combined with MofCOM export licenses.  This would make the FFL process in China similar to the USPTO/BIS process. Reducing redundancy in licensing approvals and export controls has been a long-standing concern which has become of increasing importance as China becomes a technology exporter and an important overseas patent filer.

Patent license recordals: IPO seeks to limit the legal effect of a patent contract recordal in infringement cases and in limiting the scope of the actual license. 

Design patent practice: IPO seeks clarification on patent drafting considering changes to Chinese law regarding protection of partial designs. 

Good faith:  IPO seeks to limit the draft regulations concerning proposed good faith requirements in patent prosecution.  In IPO’s views, the mere act of copying or piecing together content from other sources should not be the basis for invalidating a patent.  Rather, IPO  recommends  that “plagiarizing” and “piecing together” be replaced instead with “plagiarizing an invention.”  As mentioned in my other blogs, “good faith” has become an increasingly important aspect of China’s IP regime and is generally in need of a more expansive application in Chinese law.  I believe that the issue is complicated by the lack of a meaningful duty of candor by applicants to the Chinese patent office. If a design is copied from a third party which may already benefit from other protections (such as applied art in copyright or a three-dimensional trademark),  in my view it may be strong evidence of “plagiarizing an invention”,  as it may constitute an effort to defraud the rights holder. Similarly, if language is copied from another person’s patent application and the source of that language is not disclosed, the “plagiarizing” and “piecing together” might be evidence of a willful failure to disclose relevant prior art and mislead the patent office.  Perhaps one effective solution to this problem may be a more expansive concept of “duty of candor” or fraud before the patent office to CNIPA, which would mandate disclosure of potentially relevant prior art.

Inventor remuneration:  This has been a long discussed issue  A recent court case involving inventor remuneration in Shanghai is discussed here.    IPO seeks clarification of the role of “by-laws” as another type of agreement with an inventor creator.

Supplemental patent term certificates: IPO urges that CNIPA make the critical clarification that patent terms may be extended for drugs that are new to China, not to the world.  Consistent with the English text of the Phase 1 Trade Agreement IPO also urges CNIPA to recognize that patent term adjustment should be granted when relevant conditions are met.  The current draft of the regulation states that it “can” (可以)be granted.  IPO also disagrees with proposals to permit third parties to contest supplemental patent term decisions. 

Thank you, IPO, for sharing these excellent comments!

Amendment of May 28, 2021: Attached is the USPTO translation of the draft proposed implementing regulations. Additional changes were made to the translation of the title of the draft implementing regulations to conform with a blog of even date, which is also now different from the translation that IPO made of the document and to the USPTO translation. As the draft was generated by CNIPA and not the State Council, it can only be understood as “recommendations” for a draft, and not the draft itself. The actual drafting should be done by the State Council or the Ministry of Justice acting on behalf of the State Council. The USPTO draft calls this document a “Rule.” Although it has been issued by CNIPA for public comment, it is ultimately destined for State Council enactment, in which case it should be a “Regulation.”

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