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).

Update of August 16, 2020:  The American Bar Association Intellectual Property Law Section and Section of International Law have made their comments on the draft Patent Law Amendments available here.

 

 

 

Public Comment Draft of Patent Law Revisions Released by NPC

The National People’s Congress has released a public comment draft of the long-awaited revised patent law on its website .  Here is the draft itself, and here are the official explanations on the draft , along with other laws released by the NPC.  The comments are due by February 3, 2019.

The NPC Observer’s summary of the legislative history to date is here.   Based on a quick read, the biggest disappointment remains the absence of a patent linkage regime, as was noted of the State Council draft.  The inclusion of patent term restoration (five years) for pharmaceuticals is however, a plus.  There are also provisions on 5x punitive damages, extension of term for design patents (15 years), on-line infringement, expanding administrative enforcement, dealing with “counterfeit” patents, reversals of burden of proof for information on damages caused by the infringer, and an extension of the statute of limitations to three years, amongst other positive aspects.  There is also a good faith requirement to deter abusive patent litigation, but not one for prosecution of patents (e.g., a duty of candor).

In addition to filing comments electronically, commentors can use snail mail, by writing to NPCSC Legislative Affairs Commission 全国人大常委会法制工作委员会.  Instructions may be found at the NPC Observer website.

The draft may have been expedited in order to show a package of reforms that adddress US concerns in light of imminent trade discussions between the US and China, and as such appears to be part of larger package – perhaps even including the establishment of the new SPC IP Court.

I welcome readers to submit any translations of the proposed law and any comments they file to this blog for further publication.