Draft of the Fourth Amendment of PRC Patent Law submitted for Deliberation




On December 23, 2018, the Draft of the 4th Amendment of PRC Patent Law (“Draft”) was submitted for deliberation before the Standing Committee of the National People's Congress (“NPC”) and multiple substantial amendments have been involved in the Draft.

1. Damages for patent infringement considerably increased

According to the Draft, the court shall have the right to grant damages between 100,000 CNY and 5,000,000 CNY according to the specific circumstances of the case, given that neither the economic loss of the patent owner nor the illicit enrichment of infringer can be proved, which was considerable increase from the amount from 10,000 CNY to 1,000,000 CNY of the current Patent Law.

The Draft also provided that the court may order a punishment of 1-5 times more than the damages against intended infringement with bad-faith.

2. Evidence discovery

The Draft also stipulated that, in case that the patent owner has tried all reasonable and possible methods for evidence collection and, however, the core evidence materials in relation with the patent infringement, such as account books, are possessed by the infringer, the infringer shall disclose such evidence with the order of the court. Otherwise, the court shall grant the damages according to the claim of the patent owner.

3. Longer protection term and domestic priority for design patent

According to the Draft, the design patent will be granted a longer protection term of 15 years than 10 years in the current Patent Law, in consistence with the Hague Agreement on International Registration of Industrial Designs which requires 15 years protection term at least for industrial design. The Draft also allowed the domestic applicant of the design patent to claim for priority based on the previous application of the same design within 6 months.

4. Liability for Internet Service Provider (“ISP”)

According to the Draft, the Internet Service Provider (“ISP”) shall delete, block or disconnect the links with regard to the patent infringement immediately after they knew or should have known that Internet service they provided has been used for patent infringement. Otherwise, the ISP shall bear joint liabilities with the infringer.

5. Open license

According to the Draft, the patent owner could create an open license to anyone who wishes to use his patent and agrees to pay the royalty as he specified in the declaration submitted to the patent Registry. Generally, the open license was introduced to encourage and facilitate the exercise and exploitation of patents.

6. Employee invention

According to the Draft, the employer shall have the right to dispose of the patent as well as the right to apply for patent with regard to employee invention. The Draft also encourages letting the inventor/designer of the employee invention to share the outcome of the invention by means of shares, options and dividends.

In addition, the Draft also provided a supplementary patent term of no more than 5 years for medicine invention. The Draft also added the principle of honest and prohibition of patent abuse in general.

Author : Mr. Feng is a reputable IP expert with substantial experience on intellectual property and anti-trust law with International law firm and Chinese law firms, focusing on IP litigation, enforcement as well as trademark and patent portfolio management and non-contentious matters. Mr. Feng has represented numerous foreign clients from US, EU and Japan at various levels of courts as well as enforcement agencies in China. Mr. Feng is particularly experienced in addressing clients' commercial needs in the areas of IP litigation and arbitration, including patent, copyright, trademark, and domain names, unfair competition, trade secrets. In addition to his work in the courtrooms, he has been involved in IP transactional work, including the drafting, negotiation and enforcement of IP assignment or licensing agreements. Mr. Feng is also experienced in dealing with anti-trust law matters, particularly those relating to intersection of intellectual property law and antitrust law.

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