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).

 

 

 

Revised Patent Administrative Enforcement Rules – Is SIPO Building an Administrative System so the Patent Law Amendments Will Come?

On January 27, 2015 SIPO released a revised draft of its Patent Administrative Enforcement rules for public comment.  The released draft includes a line by line comparison with the last version (Feb. 1, 2011) as well as an explanation of the changes. The due date for comments is March 15, 2015. The purpose of these amendments is to address such matters as reducing the time frame for patent administrative litigation, improving procedures, and improving enforcement in the on-line environment.

Separately SIPO Commissioner Shen revealed at a SIPO Party Meeting on January 23, that in addition to rapidly increasing patent filings (2.361 million in total in 2014), , the total number of patent administration enforcement cases was 24,479, increasing 50.9% from the prior year.  This is a nearly 16 fold increase since 2009.  Past efforts like these have typically brought surges in “patent passing off” cases, which is most like false marking.   SIPO’s administrative enforcement in recent years has also shown irregular month to month cycles that are likely tied to enforcement campaigns (see my chart below).Patentadminenf

I estimate that this high level of enforcement activity is likely due to a combination of four factors, including an NPC Standing Committee to supervise administrative patent enforcement in eight provinces and regions that was launched in 2014. a campaign from last year to address counterfeit and substandard products (打击侵犯知识产权和制售假冒伪劣商品), a renewed commitment to amend the patent law, which Commissioner Shen noted in his talk at the meeting to local IP Offices on January 19, and SIPO’s own desire to ensure that its administrative enforcement system is not sidelined by recent efforts to improve judicial adjudication of high technology IP cases, including the establishment o f the specialized IP courts.   Indeed, the explanation advises that this draft reflects the commitments to improving rule of law in China.

The different roles of China’s administrative and judicial systems in patent enforcement has been previously discussed by me in this blog,  I quoted David Kappos at that time as recommending that “China should consider concrete ways of promoting and improving the civil judicial enforcement system by providing more resources, promoting the independence of the judiciary, providing for more training of judges, particularly on technical patent matters, and in general, improvements in the civil legal environment”  Many of these efforts are now underway in the judicial system.   Maybe the administrative system is trying to catch up?

Photo below, from Beijing airport – a foreign company advertising its patented product in 2015.

patentedmakeup.jpg

Updated January 17, 2016.