IPO’s Comments on Recent Patent Legislation: Untangling a Complex Web

IPO has graciously made available two recent comments on recent legislative proposals.  On December 10, 2020 IPO  submitted comments to the China National Intellectual Property Administration on Draft Amendments to the Patent Examination Guidelines (Second Batch of Draft for Solicitation of Comments) (“Draft Amendment”) published on 10 November 2020.   The examination guidelines comments are attached here.

IPO’s comments on the examination guidelines are primarily addressed to the patentability of computer programs in those revised guidelines.   IPO has reservations about the Patent Examination Guidelines making substantive changes in the requirements for determining whether applications contain appropriate subject matter for patent protection absent higher-order changes to the laws or regulations, such as the draft Implementation Regulations of the Patent Law of China (“Draft Implementing Regulations”) which were published for comment on November 27, 2020.  The criticism is a fair one, and is one that I also drew attention to in terms of CNIPA/SAMR’s draft rules regarding patent linkage.  It is also an almost inevitable outcome of the current flood of draft IPR-related legislation released for public comment or implementation, including a year-end rush to complete key laws such as the patent and copyright laws. 

Among its other comments, IP also discusses the comments on potential risks  of functional claiming in software patents, and on the need for a stated time period for delayed examination when an invention patent and utility model patent are filed simultaneously.

There are several other changes proposed in the examination guidelines, not discussed in the IPO comments but which may be inherent in its critique regarding changes in the examination practice without higher level guidance in the law. These changes also show a pattern of continuing reform in this area, including an increasingly flexible approach by China’s examiners in examining software-enabled inventions.  Among the changes, a computer program should be interpreted as a software product that realizes its solution mainly by a computer program.  In addition, technical means has assumed a higher priority among the three technical factors (technical problems, technical means, technical effect) in technical solution assessment.  A solution utilizing a technical means implemented by a computer necessarily solves a technical problem and thereby has a technical effect. If an algorithm in the claims improves the internal performance of the computer system, the algorithm features and the technical features can be considered to functionally support each other and be interactive.  The contributions made by the algorithm features to the technical solution shall thereby be considered in examining inventiveness. 

The IPO comments note that some case examples in prior guidelines have been removed in this Draft Amendment. IPO believes that illustrative examples serve an important purpose in providing clarity to patent examiners and guiding applicants to enable higher quality application (and claim) drafting.   I agree. By contrast to the lack of exemplars noted by IPO, there was inclusion of examples in the first batch of draft related examination guidelines, which included significant pharma-related changes.  The PTO translation of the draft is attached.  The amended guidelines were announced December 14, 2020 and are described in greater detail by Aaron Wininger.

IPO also submitted comments to China’s Supreme People’s Court on the Draft Provisions on Several Issues Concerning the Application of Law in the Trial of Patent Civil Cases Involving Drug Marketing Review and Approval (Oct. 29, 2020) The comments are attached here.  My blog on the draft is available here.  My blog also includes links to the previous IPO comments on  NMPA/CNIPA rules on linkage.    IPO flags such issues as: the lack of clarity regarding “abuse of patent rights”; the tight time constraints to prepare for litigation especially in the absence of mandatory notification to the patentee; and the removal in the final patent law of a linkage limitation to those patents listed in China’s “orange book,” which is not reflected in the draft.  

The generalized, persistent and pervasive Chinese concern around “abuse of rights” is troubling.  As I had mentioned in testimony before the House Committee on the Judiciary in 2016, there are  “concerns whether China is overly focused on IP abuse, and not sufficiently directed to improving IP use.“  While there are no doubt individuals and companies “gaming” the system, it is unclear to me if any special rules on IP abuse in patent linkage is necessary particularly at this time and in light of long-standing difficulties in commercializing patented innovative pharmaceuticals in China and other measures that address IP abuse.

The revised Patent Law was passed by China’s National People’s congress on October 17, 2020.  The various patent-related regulations, rules, judicial interpretations and other documents will no doubt be revised to conform to any significant differences made in higher level laws.

The huge number of legislative changes in China’s IP regime in 2020 is likely more extensive than a prior wave of similar reforms made when China joined the WTO.  This “tangled web” of legislation reflects: China’s increasingly sophisticated and complex IP regime; China’s efforts to better implement legislative aspects of the Phase 1 Trade Agreement; and China’s own desire to make necessary reforms in its quest to become an innovative economy.  There is nothing in the Phase 1 Agreement, for example, requiring China to make changes to its computer software patent regime, an area which many view as critical to China’s innovation and industrial competitiveness goals.   

On a related note, Berkeley Law is hoping to host a webinar early next year to review all of these legislative changes and discuss what additional changes in China’s IP regime may be occurring in 2021.

Thank you, IPO, for sharing your comments!

USPTO Chinese Law Translations Available

USPTO has graciously made available here its unofficial translations of 19 IP related final and/or draft IPR Laws, Regulations, drafting descriptions of Regulations, Rules, explanations on the Rules, as well as judicial documents which had been released from April 20, 2020 until November 2020. The  drafting agencies include: the NPC (The National People’s Congress), MOJ (Ministry of Justice), CNIPA (China National Intellectual Property Administration), SAMR (State Administration for Market Regulation), NMPA (National Medical Products Administration), SPC (The Supreme People’s Court), SPP (Supreme People’s Procuratorate), and MPS (Ministry of Public Security). The index to these files with a link to the Chinese original is here. In certain cases, the draft laws have been superseded by published laws, regulations, or judicial interpretations.  The index contains links to the Chinese original of these drafts and the final version. For your convenience, we have also included a zip file with all the original Chinese.  

Please do not undertake any legal course of action on the basis of these documents.  These documents are intended to assist in better understanding and researching Chinese law, and should not be construed as either official or any form of legal advice or opinion. This blog has no copyright interest in a US government work or publication. The index was not prepared by USPTO.

Here is a list of the documents provided:

 Chinese TitleTitle as Used in File (as translated by the USPTO)
12020—2021 年贯彻落实《关于强化知识产权保护的意见》推进计划2020-2021 Plan for Implementing the “Opinions on Strengthening IP Protection” – Bilingual
2《中华人民共和国著作权法》修改对照Copyright Law Comparison Table before/after Amendment
3刑法修正案草案知识产权条款Draft Criminal Law Amendments IP Provisions  
4《商业秘密保护规定(征求意见稿)》Draft Rules of Trade Secret Protection
5关于《商业秘密保护规定(征求意见稿)》的说明SAMR Explanations Draft Rules of Trade Secret Protection
6《药品专利纠纷早期解决机制实施办法(试行)(征求意见稿)》Draft Trial Implementing Measures of Early Resolution Mechanism for Drug Patent Disputes
7《药品专利纠纷早期解决机制实施办法(试行)》(征求意见稿)起草说明Explanation for Trial Implementing Measures of Early Resolution Mechanism for Drug Patent Disputes
8《关于强化行政许可过程中商业秘密和保密商务信息保护的指导意见(征求意见稿)》Guidelines for Strengthening Protection of Trade Secrets and Confidential Business Information during Administrative Licensing
9《关于强化行政许可过程中商业秘密和保密商务信息保护的指导意见(征求意见稿)》的起草说明Drafting Description of the Guidelines for Strengthening Protection of Trade Secrets and Confidential Business Information during Administrative Licensing
10关于审理涉药品上市审评审批专利民事案件适用法律若干问题的规定(征求意见稿)Provisions of the Supreme People’s Court on Several Issues Concerning Application of Law to the Trial of Patent Civil Cases Involving the Review and Approval for Drug Marketing
11《关于审理涉电子商务平台知识产权民事案件的指导意见(征求意见稿)》Guiding Opinions of the Supreme People’s Court on the Trial of Cases of Intellectual Property Right Disputes Involving E-Commerce Platforms
12最高法关于涉网络知识产权侵权纠纷几个法律适用问题的批复Official Reply of the Supreme People’s Court on the Application of Law on Disputes over Online Infringements on Intellectual Property Rights
13全国打击侵犯知识产权和制售假冒伪劣商品工作领导小组办公室等单位关于公开征求《关于加强侵权假冒商品销毁工作的意见(征求意见稿)》意见的公告Notice on Collecting Public Comments on the Opinions on Strengthening the Destruction of Infringing and Counterfeit Goods (Draft for Public Comments) by the Office of the National Leading Group for the Crackdown on IPR Infringing and Counterfeit Goods
14关于加强侵权假冒商品销毁工作的意见(征求意见稿)Opinions on Strengthening the Destruction of Infringing and Counterfeit Goods    
15行政执法机关移送涉嫌犯罪案件的规定 (修订征求意见稿)Provisions on the Transfer of Suspectable Criminal Cases by Administrative Organs for Law Enforcement – Bilingual
16最高人民法院《关于知识产权民事诉讼证据的若干规定(征求意见稿)》Certain Provisions of the Supreme People’s Court on Evidence in Civil Intellectual Property Litigation  
17最高人民法院关于依法加大知识产权侵权行为惩治力度的意见 《关于加大知识产权侵权行为制裁力度的意见(征求意见稿)》Opinions of the Supreme People’s Court on Strengthening Punishment Intensity of Acts Infringing Intellectual Property Rights
18最高人民法院、最高人民检察院就《关于办理侵犯知识产权刑事案件具体应用法律若干问题的解释(三)(征求意见稿)》向社会公开征求意见的通知Soliciting Public Comments on the draft “Interpretation III on Several Issues Concerning the Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights (Draft)”
19最高检、公安部就《关于修改〈最高人民检察院 公安部关于公安机关管辖的刑事案件立案追诉标准的规定(二)〉侵犯商业秘密案立案追诉标准的补充规定(征求意见稿)》向社会公开征集意见Supplementary Regulations Concerning Amendment of the Standards on Docketing for Prosecution of Infringements on Trade Secrets in the Regulations of the Supreme People’s Procuratorate and the Ministry of Public Security Concerning Standards on Filing Criminal Cases under the Jurisdiction of Public Security Organs (II)

Treating the “Foreign” Differently in Trade Secret Enforcement

Chinalawtranslate has translated the second reading of the Criminal Law amendments (XI) 中华人民共和国刑法修正案(十一), including proposed changes to the trade secret provisions of the Criminal Law.  The Chinese is available here.  The NPC Observer is tracking the passage of these amendments here.  Comments were due by November 19, 2020.  The second reading provisions on trade secrets did not change from the first reading, which I discussed here.

Both the proposed amendments to the Criminal Law and the administrative rules on trade secret enforcement establish differential treatment for trade secret enforcement when a foreign element is involved. The proposed Criminal Law provisions provide enhanced penalties when a trade secret theft is undertaken on behalf of a foreigner.  Article 3 of SAMR’s  draft proposed trade secret enforcement rules offer administrative enforcement only for Chinese trade secrets.

For readers’ convenience, here are the excerpts from Chinalawtranslate:

“17. Amend Article 219 of the Criminal Law to read:

Where any of the following acts violating commercial secrets are committed and the circumstances are serious, a sentence of up to three years imprisonment or short-term detention is to be given, and/or a fine; and where circumstances are especially serious a sentence of between three and ten years imprisonment is to be given and a concurrent fine.

(1) Obtaining commercial secrets by theft, enticement, fraud, intimidation, electronic trespass, or other improper tactics;

(2) Disclosing, using, or allowing others to use a rights holders’ commercial secrets acquired by tactics provided for in the previous item;

(3) Disclosing, using, or allowing others to use commercial secrets in their possession, in violation of confidentiality obligations or the rights holders’ demands for preserving commercial secrets.

Where one clearly knows or should know of acts listed in the preceding paragraph, but obtains, leaks, uses or allows others to use commercial secrets, it is viewed as infringements of the commercial secrets.

The Rights-holder as used to in this article refers to the owners of commercial secrets and those permitted to use commercial secrets by the owner.

18. Add one article after Article 219 of the Criminal Law to be Article 219-1:

Where commercial secrets are stolen, spied upon, sold, or illegally provided to overseas institutions, organizations, or persons, a sentence of up to 5 years imprisonment or short-term detention is given, and/or a fine; and where the circumstances are serious, the sentence is to be 5 years or more imprisonment and a concurrent fine.”