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.

 

 

 

Upcoming IPR and R&D Program in Nanjing

randd

SIPO and USPTO will be co-sponsoring a program on IPR issues of concern to conducting R&D in China.  The seminar will bring together government officials, senior IP and accounting experts, and corporate IP counsels to provide information of value to R&D centers in China.   The event will be held on May 31, 2016 at 8:30 a.m.-5:00 p.m. at the InterContinental Nanjing, address: 1 Zhongyang Road, Gulou District, Nanjing, Jiangsu.

A summary of the sessions are included below:
研讨会由如下7个主题构成:

Session 1: U.S.-China Current R&D and Collaboration Environments

主题1: 中美当前的研发和协作环境

Session 2: The Roles of IP in the Research and Development Process

主题2: 知识产权在研发过程中的角色

Session 3: Protecting Your IP: Discussion on IP Filing Strategies in U.S. and China

主题3: 保护你的知识产权:对中美知识产权申请战略的讨论

Session 4: Commercializing Your Innovations

主题4: 创新的商业化

Session 5: Drafting and Negotiating IP License Agreements – Domestic and Technology Imports; Intercompany Ownership and Transfers

主题5: 知识产权许可协议的起草和谈判–技术进口;公司间的所有权和转让

Session 6: High and New Technology Enterprises and R&D Tax Breaks

主题6: 高新技术企业和研发税收减免

Session 7: Panel Discussion of US and Chinese Experts on IP related opportunities and challenges for companies with R&D facilities in China

主题7: 圆桌讨论:中美专家就在华设立研发中心的企业面临的知识产权机遇和挑战的讨论

Please RSVP by May 24, 2016 to Aster CHEN at PTO_Shanghai_Office@trade.gov (Please include your name, title and company/organization).  Seats are limited to 100 on a first-come first-serve basis.

请在2016524日前回复陈书新 PTO_Shanghai_Office@trade.gov 确认出席,回复时请提供您的姓名、职务及单位/机构名称。100个席位,先到先得

Photo subject to creative commons license.  Source: http://www.lastampa.it.

Legislative Plans and Updates For the Balance of 2015

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:

  1. Completion: Revisions to the Regulations on Patent Agents (SIPO is drafting)
  2. 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)
  3. 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.