Draft NMPA and CNIPA Rules on Patent Linkage Released for Public Comment

China’s National Medical Products Administration on September 11, 2020, in conjunction with the China National IP Administration  released the draft “Implementation Measures for the Early Resolution Mechanism for Drug Patent Disputes (Trial) (Draft for Comment)” (the “Draft Measures”) for public comment (  国家药监局综合司 国家知识产权局办公室公开征求《药品专利纠纷早期解决机制实施办法(试行)(征求意见稿)》意见).  The announcement includes the text of the draft measures and an accompanying explanation.  Note that this drafting is occurring at the same time as the patent law is undergoing amendment, and the Supreme People’s Court had also  announced a plan on March 31, 2020 to issue a judicial interpretation on patent linkage (Provisions on Several Issues concerning the Application of Law in the Trial of Pharmaceutical Patent Linkage Dispute Cases 关于审理药品专利链接纠纷案件适用法律若干问题的规定).   

Some background: patent linkage is contemplated by the Phase 1 Agreement which calls for an “Effective Mechanism for Early Resolution of Patent Disputes.” (Sec. 1.11), and by the draft patent law amendments released in July 2020 (Art. 75).  SAMR’s earlier legislative plans  and CNIPA’s 100 IP project list for 2020 did not specifically call for enacting of linkage regulations.  The Phase 1 Agreement calls for “procedures for judicial or administrative proceedings and expeditious remedies, such as preliminary injunctions or equivalent effective provisional measures, for the timely resolution of disputes concerning the validity or infringement of an applicable patent claiming an approved pharmaceutical product or its approved method of use.” It does not notably, call for only a judicial or administrative system to implement the linkage regime, nor does it identify a requirement of “artificial infringement” whereby a generic company’s seeking to challenge an innovator’s marketing exclusivity would constitute patent infringement.  Some observers have thought that the recent experiment by the national appellate IP court combining an infringement and validity trial might serve as a useful judicial pilot for patent linkage determinations.

The Draft Measures refer back to the patent law for authorization, and also appear to govern both judicial and administration actions.  Although a detailed analysis will require further examination and review, the Draft Measures appear on first glance to be an effort by NMPA and CNIPA to anticipate proposed legislative changes by beginning the work on what might ultimately become an agency rule.  NMPA has issued many similar “implementing provisions” over the past several years.  A further clue in this regard is that comments are to be prepared on a form, which is then to be sent to NMPA, rather than to the State Council or Ministry of Justice – who normally prepare State Council regulations.  Chinese IP agencies have in the past announced draft rules or implemented them in advance of actual legislative changes, perhaps out of confidence in the ultimate passage of superseding legislation, but also, in my view, to advance the discussion on important issues and help advocate for particular positions.

Please send me your comments and any translation that you can share on this important document.

Update of September 16, 2020: Courtesy of King & Wood Mallesons, here is an English translation of the draft proposed rule for public comment.

New Draft JI on Enforcement on Criminal IP Laws, Especially Trade Secrets

China’s judicial organs (the Supreme People’s Court [“SPC”] and Supreme People’s Procuratorate [“SPP”]) continue to work on trade secret related judicial developments, with the release on June 17, 2020 of the “Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property (3) (Draft for Comment)《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)》.

This JI covers trademark, copyright, and trade secret-related crimes. Comments are due by August 2 2020 at the SPC (Third Civil or IP Division) and SPP. The focus on trade secrets is self-evident from this document.  The Chinese characters for “secret” 机密appear 36 times, trademarks 商标18 times, and a copyrighted “work”著作 8 times.

Among the major provisions that implicate trade secrets are: (a) clarification of how to satisfy criminal thresholds for trade secret enforcement, including use of illegal losses, gains and causing bankruptcy or major operational difficulties (Art. 4); how to calculate losses, including lost profits, lost sales, revenue and other benefits from the misappropriated trade secret (Art. 5); calculating the proportional value of a trade secret in combination with another  product or technology (Art. 6); use of research and development costs if the secret is lost to satisfy criminal thresholds (Art. 7); other compensatory remedial expenses (Art. 8); sanctions for violating protective orders (Art. 9); increases in penalties for entities that are mainly engaged in IP infringement or in the case of “infringement of commercial secrets for foreign institutions, organizations and personnel” (Art. 10, see my earlier blog); a reduction of penalty when the trade secret is disclosed to obtain an IP right, such as a patent, and the right is vested in the trade secret owner (Art. 11); and prohibition against engaging in certain occupations may be imposed for a period of time as a condition of a sentence (Art. 12).

Comment: trade secrets have often proven to be the subject of intense trade pressure.  However, the pressure is often not persistent, and the issues may therefore also receive inconsistent attention over long periods of time.  Recent trade pressure has contributed to such laudable developments as the revised trade secret law (AUCL), the Phase 1 Trade Agreement, the recent increase in legislative and policy work from the courts on trade secrets including work on JI’s and recent plans by SAMR to revise trade secret related rules.

If you are interested in learning more about how inconsistent trade pressure may have prolonged consideration of trade secret issues such as the definition of a “business operator”, limitations of protection to Chinese “citizens”, the availability of preliminary injunctions, and concerns over requiring “practical applicability” for trade secret protection for as long as 25 years, here is a pdf of a presentation that I gave last week at a Berkeley webinar.

July 4 update: Here is a translation of the draft JI.

July 20 update: Here are the comments of the American Bar Association’s Section on Intellectual Property Law and International Law on the six recent JI’s involving IP, including this JI, and others previously blogged about: Judicial Interpretation on Certain Issues Concerning the Application of Law in the Trial of Civil Cases Involving the Misappropriation of Trade Secrets (comments due July 27); Official SPC Reply on the Application of Law in Network-Related Intellectual Property Infringement Disputes (comments due July 27); Guiding Opinions on Hearing Intellectual Property Disputes; Involving E-Commerce Platforms (comments due July 27); Certain Provisions on Evidence in Civil IP Litigation (comments due July 31); Opinions on Increasing Punishment for Intellectual Property Infringement (comments due July 31); Judicial Interpretation Concerning Some Issues on the Specific Application of Law for Handling Criminal Cases of Infringement upon Intellectual Property Rights (comments due August 2).

Updated: June 30, 2020, July 4, 2020, July 20, 2020.

 

Three New Draft JI’s

On June 10 (Beijing time), the Supreme People’s Court published three new draft judicial interpretations (JI’s) for public comment.   Comments are due by July 27, 2020.

The three draft judicial interpretations are: “Interpretation on Several Issues Concerning the Application of Law in the Trial of Civil Cases Infringing on Trade Secret Infringements (Draft for Comment)” (关于审理侵犯商业秘密纠纷民事案件应用法律若干问题的解释(征求意见稿), “Reply on Issues Concerning the Application of Laws Related to Infringement Disputes Concerning Internet Intellectual Property (Draft for Comment)” (关于涉网络知识产权侵权纠纷有关法律适用问题的批复(征求意见稿), and Guiding Opinions on Adjudication of IPR Disputes in Cases Involving E-Commerce Platforms  (Draft for Comment)” (关于审理涉电子商务平台知识产权纠纷案件的指导意见(征求意见稿)).

 This draft trade secret JI has been released in perfect time to be discussed at the webinar on June 10 (Pacific Standard Time)  hosted by Berkeley Law on trade secret protection in China.  I will be speaking along with James Pooley, Jack Chang (QBPC), and Jerry Xia (Anjie Law Firm).  Registration for this single event in the series is here.   Thanks to Jack Chang for pointing out these new draft JI’s to me!        

Here is a machine translation of the trade secret JI.

Update of July 6, 2020: here is an unofficial translation prepared by USPTO of the .trade secret JI.