On October 17, the Standing Committee of the 13th National People's Congress has adopted and published the Fourth Amendment to the Patent Law of the People’s Republic of China. This Amendment will take effect on June 1, 2021. The following are the main contents of the Amendment.
1. Improving the system of the patent protection
Main amendments include:
- Prolonging the patent term of design to 15 years
The patent term of designs under the previous Chinese Patent Law is only ten years, shorter than many other countries and not in line with the requirement (at least 15 years) in The Hague Agreements (1999 version). Along with the increasing prominent role of design innovations and implementation of outbound strategies, China is strengthening protection for designs to prepare to join The Hague Agreements.
- Partial design becoming patentable
The previous Chinese Patent Law only provides protection for the overall design of a product. However, partial design can be easily simulated by another party in a manner such as simple put-together or substitution, and therefore cannot be protected effectively. To follow the international trend and encourage healthy development of China’s design innovation industry, partial design becomes patentable in the Amendment.
- Adding the domestic priority system for design patent applications
The previous Chinese Patent Law does not give domestic priority to designs, but this Amendment clarifies that the applicant who filed a domestic patent application on the same subject matter within six months from the date of the first domestic patent application for the design can enjoy priority.
- Adding the applicable case of dislcosure without loss of novelty
In order to better respond to emergencies and extraordinary situations such as epidemic prevention and control, and promote the timely application of related inventions and creations in disease treatment and other aspects. This amendment adds "in the case of a state of emergency or extraordinary circumstances, the first disclosure for the purpose of public interest" in the applicable case without loss of novelty exception. This can not only meet the current practical needs of fighting the epidemic, but also leave room for future application in other emergencies or extraordinary circumstances.
2. Strengthening the protection of patent rights
Main amendments include:
- To prevent the patent abuse problem, the Amendment introduces the general principle provisions, wherein the exercise of the patent right is required to comply with the good faith principle, and shall not damage public interests, exclude or restrict competition. Though the prior Chinese Patent Law already includes some provisions on limiting patent right such as compulsory license and exception of patent infringement, but it lacks of a general principle on patent abuse. To provide sufficient legal basis with the courts in trying some cases and with the administrative authorities in formulating relevant specific regulations, the Amendment introduces this provisions on the principle of regulating patent abuse.
- To prevent the impact of excessive examination period on the patent protection period, the Amendment introduces the period compensation system, wherein after the expiration of four years from the date of the invention patent application and three years from the date of the substantive examination request, the SIPO shall provide compensation for the term of patent right for unreasonable delay in the process of granting invention patents at the request of the patentee.
- To address the difficult burden of proof problem, the amendment introduces the transfer of the burden of proof for determining the amount of compensation, wherein the infringer can be ordered to provide the relevant account books and information if the right owner has tried his best to provide evidence and the account books and information related to the infringement are mainly in the hands of the infringer. If the infringer does not provide these, the court may determine the amount of compensation with reference to the claims and evidence provided by the right holder.
- To address low compensation problem, the Amendment introduces a punitive damage system for willful infringements, wherein the damage is increased up to one to five times of the actual lose and the the upper limit of statutory compensation is increased up to 5 million.
3. Promoting patent exploitation and utilization
Main amendments include:
- To reduce transaction costs, the Amendment introduces the patent open license system, wherein the open license statement, effective procedures, the licensee's procedures and corresponding disputes solution path are stipulated. This system is regarded as the way of solving the problem of information asymmetry between the supply and demand sides of patented technology through government public services.
- To improve the efficiency of patent conversion, the Amendment further clarifies the function and responsibility of the State and local patent administrative authorities. The Amendment requires that patent administrative authoritied at all levels shall promote patent exploitation and utilization. Thus, the Amendment clarifies from the legal perspective that promotion of patent exploitation and utilization is the functions and responsibilities of patent administrative authorities at all levels to solve issues such as low conversion rate of patented technologies and low degree of patent exploitation and utilization. The Amendment also clarifies the function and responsibility of state patent administrative authorities to include carrying out patent administrative enforcement, investigating and dealing with patent infringement and counterfeiting acts, and providing public patent information service.
In addition to the above three aspects, the Amendment also make some changes in other details. Because of the limitation of length, no more details are given here.
