Adopted by the Standing Committee of National People’s Congress on October 17, 2020, the 4th Revision of the Patent Law of P.R. China (hereinafter referred to as the “New Law”) will come into effect as of June 1, 2021. Below is a brief summary of the amendments:
1. Protection of design patents
- Extension of the term of design patents: Under the New Law, the term of a design patent will be extended from 10 years to 15 years
- Partial designs: Under the current patent law, only the design of a whole product is eligible for design patent protection in China. The New Law extends the subject of design patent to a partial design.
- Right of priority for a domestic application: According to the New Law, the applicant of a design application may claim the priority to an earlier design application filed in China and the priority period is six months.
2. Patent term extension due to the unreasonable delayed prosecution
- Under the New Law, where a patent for invention is granted after four years from the date of filing and after three years from the date of requesting substantive examination, the patentee may request patent term extension for cases with unreasonable delayed prosecution, taking no account of the unreasonable delay caused by the applicant. The details and examination standards are to be further clarified in the Implementing Regulations.
3. Special protection for drug patents
- Patent term extension for drug patents: According to the New Law, with regard to the patent for invention related to new drugs that have been approved in China, in order to make up for the time spent on review and approval of new drugs, the patentee may request patent term extension. The extension shall not exceed five years, and the total valid patent term after the new drug is approved shall not exceed 14 years if the term extension is enjoyed.
- Drug patent linkage system: The New Law provides that both the applicant for generics marketing approval and the relevant patentee or interested party have the opportunity to initiate an action through early resolution mechanism to deal with the patent disputes arising from the drug marketing approval procedure. Specifically, the relevant parties may request the court or the Patent Administration Department to make a decision on whether the generics-related technical solution applied for marketing approval falls within the protection scope of patent rights of others' drugs. The National Medical Products Administration (NMPA) may make a decision on whether to suspend the approval of the related generics based on an effective judgment rendered by the court or the decision made by the patent administrative department under the State Council.
4. Compensation liability of patent infringement
- Punitive damages for willful infringement: The New Law prescribes that, for willful infringement, the court may increase the amount of damages to 1-5 times if the circumstances are serious.
- Amount of statutory damages: Under the New Law, the amount of the statutory damages is increased to the range of RMB 30,000 to 5 million, while the current range is RMB 10,000 to 1 million.
- Shifted burden of proof for damages: The New Law provides that where the right holder has tried his best to provide evidence, and the account books and materials related to the infringement are mainly under the control of the infringer, the court may order the infringer to provide the account books and materials related to the infringement; where the infringer does not provide or provide false account books and materials, the court may determine the amount of compensation by reference to the right holder's claim and evidence.
5. Administrative enforcement mechanism
- For patent infringement disputes with significant nationwide impact, the patentee may request China National Intellectual Property Administration (CNIPA) to handle the disputes.
- Where the local administrative authorities handle patent infringement disputes, the cases of infringing the same patent within the administrative region can be handled together; for cross-regional cases of infringing the same patent, the local administrative authorities at a higher level can be requested for handling.
- The administrative authorities may question the parties concerned, and investigate the circumstances related to the suspected illegal act, conduct on-site inspection of the places where the suspected illegal act is committed; check the products related to the suspected illegal act.
6. Open license mechanism
- Under the New Law, where a patentee voluntarily makes a written declaration before CNIPA that he is willing to license any entity or individual to exploit his patent, and specifies the means of payment and standard of license fees, an open license is established. CNIPA will make an announcement for such open license.
- Any potential licensee may obtain the license by notifying the patentee in written form and paying the license fee in accordance with the means and standard specified in the announcement.
- During the life of an open license, patentee should not grant a sole or an exclusive license.
- During the life of an open license, the annual fee paid by the patentee can be reduced or exempted accordingly.
7. Grace period for an invention-creation made public for the purpose of public interests
- The New Law provides that, within six months before the date of application, in the case of national emergency or exceptional circumstance, an invention-creation first made public for the purpose of public interests does not lose its novelty.
- The New Law provides that the principle of good faith shall be complied in applying for patents and exercising patent rights. Patent rights shall not be abused to harm public interests or the legitimate rights and interests of others.
- Method of nuclear transformation shall not be granted for a patent.
- The State encourages the entity that have been granted patent to implement property rights incentives to enable inventors and designers to share reasonable benefits from innovation by means of equity, options dividends or other means.
- The time limit for submitting copy of the first filed patent application documents is extended to 16 months where the priority is claimed to the earlier filed application for invention or utility model.
- The New Law provides that the period of limitation for action against a patent infringement shall be three years which is consistent with that of the Civil General Law and Civil Code.
- The accused infringers may also initiatively present the patent evaluation report where a patent infringement dispute involves a utility model patent or a design patent.