On 17^th October 2020, President of China, Xi Jinping issued Presidential Decree no. 55 announcing that Amendments of Patent Law had been passed on the 22^nd meeting of the 13^th National People’s Congress and will come into force on June 1, 2021. The amendments are made to improve the patent system, strengthen patent enforcement and encourage exploitation and utilization of patent in China.

Key amendments of this newly revised Patent Law are as follows:

The amendment redefined design eligible for design patent protection as: “any new design of the shape, pattern or their combination, or the combination of the color with shape or pattern, of the whole or a part of a product, which creates an aesthetic appeal and is fit for industrial application

This indicates that inclusion of partial designs or designs of a part of a product in the protection scope of design patent.

The patent term of design patent under the current Patent Law is 10 years from the filing date. After the new amendments, the term of protection will be extended to 15 years to conform to the requirement of The Hague Agreement.

Under the new Patent Law, applicant of a design patent application will be able to claim priority to its prior-filed national application within 6 months from the filing date of said application.

For patent applications where a priority claim is made, the Patent Law allows later submission of Certified Copy of Priority Document of the prior-filed application to furnish the priority claim. Before the new amendments, it is regulated that such document must be submitted within 3 months from the filing date of application.

Under the new Patent Law, the Certified Copy of Priority Document can be submitted within 16 months from the earliest filing date of the prior-filed application.

In response to the outburst of COVID-19 pandemic this year, public disclosure made for purpose of public interest in state of emergency or extraordinary circumstance will be eligible for novelty grace period in the new Patent Law.

The new Patent Law introduces “Open License System”. Under this system, patentees can make a declaration through the China Intellectual Property Administration (CNIPA) to grant license to anyone who are interested in exploiting their patent. In condition where the open license declaration is made for Utility Model or Design patent, a patentability evaluation report shall be provided. As a courtesy to patentees who endorse their license of right, they would be entitled to reduction or exemption of annuity fees.

For any disputes between the licensee and licensor on the implementation of an open license, the parties may resolve the disputes through negotiation; Where the negotiation fails to resolve the disputes, the parties may request the CNIPA for mediation or bring the disputes to the People’s Court.

The new Patent Law introduces Patent Term Adjustment/Extension mechanism to compensate patent applicants for unreasonable delays that occur during patent prosecution. Specifically, the CNIPA shall compensate the term of patent right for unreasonable delays that occur during the patent prosecution for the patent applications where its examination takes more than 4 years from the date of filing the applications and 3 years from the date of filing request for substantive examination.

Considering the nature of pharmaceutical-related patent applications where longer time of examination will be taken, the CNIPA may compensate patent term to those applications upon request of the patent applicants. The compensated extension of term shall not exceed 5 years while the total effective patent term shall not exceed 14 years after the new drug is introduced to the market.

The new Patent Law induces good faith principle for filing patent application and exercising patent right. Specifically, it prohibits the abusive use of patent right which may jeopardize public interest and legal rights of others.

Any abusive use of patent right which eliminates or restricts fair competition causing monopoly shall be handled in accordance with the Anti-Monopoly Law of the China.

1. In addition to the patentee, all the parties involving in a Utility Model or Design Patent infringement (i.e. plaintiff, defendant or any interested parties) may now adduce a patentability evaluation report as proof for infringement to the court.


2. The new Patent Law increase fines for false patent marking. Any entities who are convicted of false patent marking will be imposed a fine which is up to 5 times the illegal earnings or maximum RMB 250,000.


3. The new Patent Law clarifies actions the competent authority can take when investigating validity of false patent marking, which includes: questioning, conducting on-site investigation, scrutinizing all documents and products that believe to be relevant to the act and seizing the alleged products.


4. The new Patent Law also introduce a new mechanism for determining compensation and damages in a patent infringement. Specifically, the amount of compensation will be determined based on the actual damages that the patentee receives due to the infringement or profits that the infringer gained from the infringement. Where the damages of the patentee or profits gained by the infringer are difficult to determine, the Court may award the patentee compensation which amounted from RMB 30,000 – RMB 5,000,000 depending on the type of infringed patent, nature and manner of infringement. The compensation shall include all the reasonable costs spent by the patentee in stopping the infringement.


5. In addition, the new amendment regulates that the infringer may also bear burden of proof. In the event where the infringer fails to provide relevant account books or financial materials or provides fake materials subject to a court’s order for calculating compensation and damages, the Court may determine the compensation amount by referencing to the patentee’s compensation claims and evidences.


6. The new Patent Law also specifies the measure and relief in which a patentee or an interested party could take when facing infringement. Specifically, the patentee and the interested party may file a petition for property preservation, order for specific behavior or injunction to prohibit specific conduct to the Court before instituting legal actions, provided that the fact where a party is or will be infringing the patent right and such infringement is likely to cause irreparable harm thereto is evidenced.


7. The new Patent Law prolongs the period of limitation for instituting action against patent infringement from 2 years to 3 years, commencing from the date when the patentee or interested party knows or have known of the infringement.

Sources:
CNIPA Press release (Chinese)
CNIPA Compasion table between new and current Patent Law (Chinese)