After almost two years' preparation, the State
Council finished the Draft Amendment of the Chinese Patent Law (hereinafter
refers to "the Draft") in August 2008 and submitted the same to the
Standing Committee of the National People's Congress (NPCSC) for approval.
The NPCSC held a first reading of the Draft on August 25, 2008. Usually,
the NPCSC will hold three readings and make further amendments to
the Draft before it approves the same. It is said that the Draft will
be finally adopted by the NPCSC in the first half year of 2009.
This is the third revision to the Chinese Patent Law since
it was first promulgated in 1984. The previous two amendments were
enacted in 1992 and 2000. The first amendment added pharmaceutical
compositions to the list of patentable subject matter and inaugurated
China's membership in the Patent Cooperation Treaty (PCT). The second
amendment brought Chinese Patent Law into compliance with the TRIPS
agreement.
Below are some revised articles abstracted from the Draft, which involve
significant changes as compared with the current Chinese Patent Law.
FILING OF PATENT APPLICATION
Disclosure of Genetic Resources
Revised
Article 5 paragraph 2 reads,
For an invention-creation, the completion of which depends on genetic
resources, but the acquisition or exploitation of said genetic resources
are contrary to relevant laws and regulations of the State, no patent
right shall be granted.
Revised Article 27 paragraph 6 reads,
Note:
Under the current laws and regulations, only the PRC Stock Farming
Law (
)
and the PRC Tentative Regulation on Human Genetic Resources (
)
provide regulations and restrictions on acquiring and using animal
and human genetic resources, especially for exporting purposes. To
protect China's rich biological and genetic resources, the draft addresses
genetic resource issues for the first time in the Chinese patent law
history. According to the draft, the origin of a genetic resource
must be disclosed if an invention's completion relies on the acquisition
and exploitation of genetic resource. The impact of this provision
on the Chinese patent practice depends greatly upon how genetic resource
will be defined and what will constitute illegal acquisition and exploitation.
Detailed requirements for the disclosure of genetic resources are
expected to be worked out later in the revision process of the Patent
Rules or in special regulations.
Double Patenting
Revised
Article 9 paragraph 1 reads,
Note:
According to the interpretation of the current Patent Examination
Guidelines on the Double Patenting issue, for any identical invention-creation,
the same applicant may file an invention patent application and a
utility model application on the same or different dates. On the condition
that the applicant declares to abandon the previously granted patent
right as of the date of filing, he can still obtain the patent right
for the pending application. So the applicant may take this opportunity
to obtain patent protection for one invention-creation for a period
of more than twenty years.
The draft only allows that the same applicant may file, at the same
date, a patent application for invention and a patent application
for utility model for the identical invention-creation. So, it is
not possible for the applicant to obtain patent protection for one
invention-creation for a period of more than twenty years.
Co-owner s Right
Revised Article 15 reads,
Where the right for patent application or the patent right is shared
by two or more entities or individuals, and an agreement is concluded
by all co-owners, the exploitation of the right shall follow the agreement;
if there is no such agreement, any of the co-owners could individually
exploit or authorize others to exploit the patent right through ordinary
license agreement, but the royalty obtained from the license of patent
right shall be shared by all of the co-owners.
Other than prescribed above, the exploitation of the right for patent
application or the patent right shall be consented by all co-owners.
Note:
The article clarifies the right of the co-owners. When two or more
entities or individuals co-own a patent application or patent, all
co-owners must consent to the following acts, unless otherwise agreed:
1) assigning the right to apply for a patent; 2) assigning or withdrawing
the patent application; 3) assigning, abandoning or pledging the patent
right; and 4) licensing others to exploit the paten in an excluded
way.
Designation of Foreign-related Patent Agencies
Revised Article 20 paragraph 1 reads,
Where
any foreigner, foreign enterprise or other foreign organization having
no habitual residence or business office in China applies for a patent,
or has other patent matters to attend to, in China, it or he shall
appoint a patent agency legally established under laws to act as his
or its agent.
Note:
The current Chinese Patent Law has a special clause which empowers
the SIPO to designate certain patent agencies to handle foreign-related
matters for patent prosecution in order to guarantee the quality of
service. In the draft, all patent agencies established under China
s laws can handle foreign-related patent matters. It means that although
foreigners still have to appoint a patent agency to act as their agent
when filing patent applications or dealing with other patent-related
matters before SIPO, they can appoint any patent agency established
under China s laws.
Foreign Filing License
Revised Article 21 paragraph 1 reads,
Any entity or individual may file a patent application in a foreign
country for invention-creation made in China, in the event that said
invention-creation has passed the confidentiality examination by the
Patent Administration Department under the State Council.
Note:
Under the current Patent Law, when Chinese entities or individuals
intend to file a patent application in a foreign country for an invention-creation
made in China, they must first file a patent application in China.
The draft provides that when entities or individuals intend to file
a patent application in a foreign country for an invention-creation
made in China, they only need to get approval from SIPO. The change
from the "first filing requirement" to "foreign filing license requirement"
is significant. It gives more flexibility to the foreign-invested
companies in selecting countries when filing patent applications for
such invention-creations. In practice, filing of a patent application
with SIPO for invention-creation made in China might be considered
as submitting a petition for foreign filing license for the subject
matter of the application.
Further, the current Patent Law limits its first filing requirements
for inventions created in China to Chinese entities and individuals,
while the draft expands the foreign filing license requirement to
include foreigners.
Unity of a Design Application
Revised Article 32 paragraph 2 reads,
An application for a patent for design shall be limited to one design
incorporated in one product. Two or more similar designs for the same
product, or two or more designs which are incorporated in products
belonging to the same class and being sold or used in sets, may be
filed as on application.
Note:
Two or more similar designs of the same product will be allowed
to be contained in a single design application in the future in addition
to designs of products being sold or used in set. These similar designs
might not be deemed as "double patenting" in the future.
IMPROVED CRITERIA FOR THE GRANT OF PATENT RIGHT
Absolute Novelty
Revised
Article 23 reads,
Any invention or utility model for which patent right may be granted
must possess novelty, inventiveness and practical applicability.
Novelty means that, the invention or utility model shall neither belong
to the prior art, nor has any other person filed, before the date
of filing of the invention or utility model, with the Patent Administration
Department under the State Council an application which described
the identical invention or utility model and was published in patent
application documents or patent documents after said date of filing.
Inventiveness means that, as compared with the prior art, the invention
has prominent substantive features and represents a notable progress
and that the utility model has substantive features and represents
progress.
Practical applicability means that the invention or utility model
can be made or used and can produce effective results.
The prior art referred to in this law means any technology known to
public before said date of filing either in the country or abroad.
Note:
In the current Chinese Patent Law, a mixed novelty standard is
adopted, wherein, prior art includes (1) publication within or outside
China and (2) public use or other means of disclosure only in China.
If an invention, utility model or design is known to the public in
other countries through means other than publications (such as use,
sale or display), it does not constitute a novelty bar when assessing
the novelty of the invention, utility model or design. In the draft,
"prior art" is broadened to include public use or other means of disclosure
outside China.
Patentability Requirement for a Design Patent
Revised
Article 24 reads,
Any design for which patent right may be granted shall neither belong
to the prior design, nor has any other person filed, before the date
of filing of the design, with the Patent Administration Department
under the State Council a design application which described the same
design and was published in patent documents after said date of filing.
Any design for which patent right may be granted shall be obviously
distinguished from the prior design or a combination of the feature
of the prior design.
Any design for which patent right may be granted must not be in conflict
with any prior right of any other person obtained before the design
is granted a patent right.
The prior design referred to in this law means any design known to
public before the date of filing either in the country or abroad.
Note:
Under the current Chinese Patent Law, a design application may
be granted a valid design patent as long as it is neither identical
with nor similar to any prior designs, which is deemed as "novelty"
requirement. But in the draft, an "inventive step" will be further
required. The definition of "prior design" is added, which covers
all prior designs disclosed either in China or abroad.
Further, it is clarified that "the prior right of any other person"
referred to in this article means prior right obtained by others before
the design patent is granted.
Non-patentable Subject Matter for a Design Patent
Revised
Article 26, paragraph 1 item 6 reads,
For any of the following, no patent right shall be granted:
∴
(6) Designs of a planar printing consisted of patterns, colors or
their combination which mainly have labeling functions.
Note:
In the Draft, the design of a planar printing (plane presswork)
which mainly have labeling functions will be excluded from protection
by a design patent. However, how to define a "planar printing which
mainly have labeling function" is still not clear.
PROTECTION OF PATENT RIGHT
Offer to Sell of a Product Incorporating Patented Design
Revised
Article 11 paragraph 2 reads,
After the grant of the patent right for a design, no entity or individual
may, without the authorization of the patentee, exploit the patent,
that is, make, offer to sell, sell or import the product incorporating
its or his patented design, for production or business purpose.
Note:
The
current Patent Law provides that a patentee of a design patent can
prevent others from making, selling or importing patented product.
In order to better protect the interest of the patentee of a design
patent, "offer to sell", which is not an infringing action for a design
patent now, will be prohibited in the future.
Protection Scope of a Design Patent
Revised
Article 60 paragraph 2 reads,
The scope of protection of the patent right for design shall be determined
by the product incorporating the patented design as shown in the drawings
or photographs. The brief description may be used to interpret the
design of the product shown in the drawings or photographs.
Note:
Under
the current Chinese Patent Law, the extent of protection of a design
patent shall be determined by the product incorporating the patented
design as shown in drawings or photographs. In the draft, it is clarified
that the brief description may be used to interpret the protection
scope of a design patent.
Evaluation Report on Patentability of Utility Model or Design Patent
Revised
Article 62 reads,
Where any infringement dispute of patent right relates to patent for
utility model or patent for design, the people's court or the administrative
authority for patent affairs may ask the patentee or the interested
person to furnish an evaluation report on patentability made by the
Patent Administration Department under the State Council.
The Patent Administration Department under the State Council makes
search, analysis and evaluation on the relevant utility model or design,
upon the request of the patentee or the interested person, and issues
an evaluation report on patentability. Said evaluation report on patentability
is a preliminary evidence for the People's court or the administrative
authority for patent affairs to determine the patentability of the
patent right.
Note:
An
evaluation report on patentability made by the SIPO is required when
the patentee or the interested person enforces his or her patent right.
The aim of submitting such a report is to avoid someone institute
legal actions against others in bad faith. However, the article was
also criticized by many people because said report was made by the
SIPO without hearing the opinions of the patentee or interested person.
Prior Art Defense
Revised
Article 63 reads,
In a patent infringement dispute, if the accused infringer has evidence
which can prove that the technology or design being exploited by him
or it belongs to the prior art or prior design, there should be no
infringement.
Note:
This article clarifies plea based on prior art or prior design.
That is, if accused infringers can prove that the technology or design,
which they exploit, belongs to the prior art or prior design, there
should be no infringement.
Statutory Damages Penalty and Fine
Revised
Article 64 reads,
Where
any person passes off the patent of another person as his own, he
shall, in addition to bearing his civil liability according to law,
be ordered by the administrative authority for patent affairs to amend
his act, and the order shall be announced. His illegal earnings shall
be confiscated and , in addition, he may be imposed a fine of not
more than four times of his illegal earnings and, if there is no illegal
earnings, a fine of not more than RMB 200,000 yuan. Where the infringement
constitutes a crime, he shall be prosecuted for his criminal liability.
Revised
Article 65 reads,
Where
any person passes any non-patented product off as patented product
or passes any non-patented process off as patented process, he shall
be ordered by the administrative authority for patent affairs to amend
his act, and the order shall be announced. His illegal earnings shall
be confiscated and, in addition, he may be imposed a fine of not more
than RMB 200,000 yuan.
Revised
Article 66 reads,
The
amount of compensation for the damage caused by infringement of the
patent right shall be determined by negotiation of the two parties.
If an agreement can not be obtained through negotiation, the amount
of compensation for the damage shall be assessed on the basis of the
losses suffered by the patentee or the profits which the infringer
has earned through the infringement. If it is difficult to determine
the losses which the patentee has suffered or the profits which the
infringer has earned, the amount may be assessed by reference to the
appropriate multiple of the amount of the exploitation fee of that
patent under contractual license. Should the losses which the patentee
has suffered, the profits which the infringer has earned and the exploitation
fee of the patent under contractual license all can not be determined,
the court may, according the type of the patents, the nature and condition
of the infringement actions, orders an amount of compensation of RMB
10,000 Yuan to RMB 1,000,000 yuan.
The amount of compensation shall include any reasonable costs of the
patentee for stopping the infringement actions.
Note:
The
draft increases, in the event of any person passes off the patent
of another person as his own or passes any non-patented product/process
off as patented product/process, the fine of not more than three times
of his illegal earnings to not more than four times of his illegal
earnings, and the fine of not more than 50,000 Yuan to 200,000 Yuan
even if there is no illegal earnings.
The current Patent Law provides that the amount of compensation for
damage caused by infringers shall be based on the patentee's losses,
or infringer's profits, or the royalty of a license agreement. However,
it does not stipulate statutory damages if all of the above three
methods are unavailable. Although the Supreme People's Court issued
a judicial interpretation providing statutory damages for the patentee,
the current Patent Law does not have such clauses. To reflect the
current judicial practice and better protect the interests of the
patentee, the draft adds the statutory damages as an option in determining
the compensation to the patentee when infringement is established.
Under current practice, statutory damages can be from RMB 5,000 to
500,000, at the discretion of the Supreme Court's judicial interpretation.
The draft incorporates a provision on statutory damages which increases
the upper limit to RMB 1,000,00. Besides, the draft also makes it
clear that the compensation to the patentee for patent infringement
should include reasonable expenses the patentee has incurred in order
to stop the infringing act.
Evidence Preservation
Revised
Article 68 reads,
For the purpose of stopping infringement, in the event that the evidence
might be destroyed or difficult to obtain later on, the patentee or
the interested person may request the people's court for vidence preservation
before instituting a lawsuit.
The people's court shall make a decision within forty eight hours
after it formally accepts the request for the evidence preservation;
the preservation measures shall be executed immediately once the court
rules to grant preservation measures.
Where the people's court rules to grant preservation measures, it
may require the requester to provide guarantee; if the requester refuses
to provide guarantee, the request shall be rejected.
If the requester doesn't institute lawsuit within fifteen days from
the date the preservation measures are executed, the people's court
shall release the preservation measures.
Note:
The
current Patent Law and Judicial Interpretations do not clearly include
evidence preservation. According to the draft, when a request for
pre-suit evidence preservation is formally accepted by the court,
the court must make a decision within forty-eight hours but may require
guarantee for granting the preservation measures. Within fifteen days
from the date of execution of the preservation measures, a lawsuit
must be initiated or the preservation will be released.
Parallel Importation and "Bolar' Exception
Revised
Article 70 items 1 and 5 reads,
None of the following shall be deemed as infringement of the patent
right:
(1) Where, after the sale of a patented product that was made by the
patentee or by the entity or an individual under the authorization
of the patentee, or of a product that was directly obtained by using
the patented process by the patentee or by the entity or an individual
under the authorization of the patentee, any other person uses, offers
to sell, sells or import that product;
(5) For acquiring information necessary for regulatory approval, an
entity or individual, who has the intention to make pharmaceuticals
or medical devices patented by others, makes the patented pharmaceuticals
or medical devices.
Note:
The
draft extends the scope of patent infringement exemptions, in light
of Article 6 of the TRIPs Agreement, and proposes to allow parallel
import in China, i.e. adopt the principle of world-wide patent exhaustion.
Parallel import (after the first sale of a patented product or a product
acquired directly through a patented method, either being marketed
by the patentee or with the patentee's permission, the "importation"
of such a product) is explicitly defined as non-infringement, and
the "Bolar" exception is adopted for pharmaceutical and medical device
related patents.
Exemption of Infringement
Revised
Article 71 reads,
For an infringing product that was made without the consent of the
patentee and was sold to a user or a distributor who buys and, for
production and business purposes, uses, offers to sell or sells said
infringing product, without knowing that said product is infringing
the patent right, said user or distributor shall not be liable to
compensate for the damage of the patentee if he can prove that he
obtains the product from a legitimate source.
Note:
This
Article corresponds to current Article 63 paragraph 2 and claries
the patent infringement exemptions and include the "offer to sell"
in the revised Article.
COMPULSORY LICENSE FOR EXPLOITATION OF PATENT
Revised
Article 49 reads,
For any of the following, the Patent Administration Department under
the State Council may, upon the request of the entity or individual
which is qualified to exploit the invention or utility model, grant
a compulsory license to exploit the patent for invention or utility
model:
(1) The patentee, after the expiration of three years from the grant
of the patent right and the expiration of four years from the date
of filing of the patent application, has not exploited the patent
or has not sufficiently exploited the patent without any justified
reason;
(2) The practice of the patent right by the patentee has been determined
by judicial procedure or administrative procedure as unfairly excluding
or restraining competition, and it is necessary to grant compulsory
license to the requester.
Revised
Article 50 reads,
Where a national emergency or extraordinary state of affairs occurs,
or where the public noncommercial use so requires, the Patent Administrative
Department under the State Council may, upon the request by relevant
responsible department under the State Council, grant the entity appointed
by the responsible department which is qualified for exploitation
of a compulsory license to exploit the patent for invention or utility
model.
Revised
Article 51 reads,
For the purpose of public health, the Patent Administration Department
under the State Council may issue a compulsory license to manufacture
the drug, which has been granted a patent right in China, and to export
the drug to the following countries or areas:
(1) The most underdevelopment countries;
(2) Members who have no or insufficient capability to manufacture
the drug and have fulfilled the relevant procedure in accordance with
relevant stipulations in the international treaties of the WTO to
which China is a party.
Revised
Article 53 reads,
Where the compulsory license is to be granted to invention-creation
of semiconductors, the exploitation of the invention-creation shall
be limited to the following:
(1) Commonality non commercial use;
(2) The practice of the patent right by the patentee has been determined
by judicial procedure or administrative procedure as unfairly excluding
or restraining competition, and it is necessary to grant compulsory
license to the requester.
Revised
Article 54 reads,
Other than the compulsory license granted according to Article 49
item (2) and Article 51 of this law, the exploitation of the compulsory
license shall be limited to supplying for the domestic market.
Note:
Although
no compulsory license has been granted in China since the establishment
of the patent system, the Draft clarifies the conditions where a compulsory
license could be issued. In light of the Resolution on the Implementation
of the TRIPs and Paragraph 6 of the Public Health Declaration and
the Protocol on the Amendment to the TRIPs Agreement approved by the
general council of the WTO, the Draft adds a new provision that allows
SIPO to grant a compulsory license to a Chinese entity to manufacture
a patented drug and export the drug to other WTO members that have
no or inadequate capability to manufacture the drug when facing a
public health crisis. The draft also addresses compulsory licenses
granted because of national emergency or public interest. National
emergency or public interest includes a public health crisis caused
by the occurrence and/or spread of an epidemic disease.
In conclusion, the draft proposes significant revisions to the current
Chinese Patent Law. It improves the novelty standard and design patentability
requirement. It incorporates infringement determination standards
widely used in practice, strengthens patent protection, extends the
scope of patent infringement exemptions and further clarifies stipulations
on compulsory licenses.
(The End)
