Being published on December 21, 2023 and coming into effect on January 20, 2024, the newly revised implementation rules of the Chinese Patent Law (hereinafter referred to as the New Rules) keeps the relevant content about the "protection of patent rights" remaining in its 8th chapter, which includes the modifications to the hierarchical jurisdiction for different types of cases and introduces new provisions regarding "patent infringement disputes with nationwide significant impact", thereby further improving the rules of the patent administrative protection.
I. Hierarchical Jurisdiction
Article 95 of the New Rules[1] adds "departments in charge of patent affairs under the people's governments of the autonomous prefectures, leagues, regions, and districts of municipalities directly under the Central Government" as the authority for handling and mediating patent dispute cases. As for the cases involving patent marking violations and the sale of counterfeit patent products with legal sources, Articles 99 (2)[2] and 101 (3)[3] of the New Rules designate the jurisdiction to be "departments responsible for patent enforcement at the county level or above."
Moreover, Article 100 of the New Rules states: "If an applicant or patentee violates the provisions of Articles 11[4] and 88[5] of these rules, the departments responsible for patent enforcement at the county level or above shall issue a warning and may impose a fine of up to 100,000 yuan." The quoted provisions refer to the principle of good faith in patent applications and open licensing processes. Thus, for the aforementioned two scenarios, not only the principle of good faith is introduced, but also the penalties and jurisdictions for related violations are established.
It is noteworthy that for enforcement against violations of the good faith principle in patent applications and open licensing, the New Rules do not specify regional jurisdiction. The determination of the specific enforcement department for foreign entities without permanent residence in China remains to be clarified in practices.
II. Significant Patent Infringement Disputes
Regarding "patent infringement disputes with significant nationwide impact," the New Rules introduces Article 96:
"In any of the following situations, it shall be deemed a significant patent infringement dispute with nationwide impact as referred to in Article 70 of the Patent Law:
1. Involving significant public interest;
2. Having a significant impact on industry development;
3. Major cases across provinces, autonomous regions, and municipalities directly under the Central Government;
4. Other circumstances that the Patent Administration Department under the State Council deems to have significant impact.
If a patentee or interested party requests the Patent Administration Department under the State Council to handle a patent infringement dispute, and the case is not deemed to be of significant national impact, the department may designate a local people's government department responsible for patent work with jurisdiction to handle it."
With this addition, a rule system for "patent infringement disputes with significant nationwide impact" has been established by the following regulations:
- Law: Article 70 (1) of the Patent Law (effective from June 1, 2021), stating that “The patent administration department under the State Council may, at the request of the patentee or any interested party, deal with patent infringement disputes that have a major impact throughout the country”, grants the CNIPA the authority to handle significant patent infringement disputes by statutory law.
- Administrative Regulation: Article 96 of the New Rules (effective from January 20, 2024), as mentioned above.
- Departmental Rules: "Administrative Adjudication Measures for Major Patent Infringement Disputes" (CNIPA, effective from June 1, 2021), which details the definition of major patent infringement disputes, conditions and materials for case filing, evidence investigation authority, rules for inspection and identification, provisions for technical investigator, relevant deadlines, enforcement and publicity, and other procedural matters.
- Departmental Rules: "Measures of Patent Administrative Enforcement" (CNIPA, effective from February 1, 2011).
CNIPA also issued an interpretation of the "Administrative Adjudication Measures for Major Patent Infringement Disputes" on October 12, 2021, providing detailed explanations on the background, process, and main content of the measures.
Furthermore, CNIPA has concluded the first and second batches of major patent infringement dispute administrative enforcement cases, totaling 12 cases. These cases are now publicly available and serve as important references for such cases.
III. For which Cases the New Rules Works
From effective date, January 20, 2024, petitioners for mediation or handling the patent disputes, by patent management departments will be subject to the New Rules.
It should be noted that the CNIPA, along with the New Rules, also issued Transitional Measures for the Implementation of the Amended Patent Law and Its Implementation Rules, applicable to "patent examination" rather than "patent administrative enforcement". Therefore, the aforementioned Transitional Measures do not work when requesting patent administrative enforcement.
Moreover, for cases not yet concluded before the implementation of the New Rules, there is no explicit provision regarding how the laws should be applied. It is generally believed that the "date of the act" should be the basis for determining the applicable law. Specifically, for acts such as patent infringement, counterfeit patents, or violation of the good faith principle occurring before January 20, 2024, the old rules shall prevail. For acts occurring on or after January 20, 2024, the New Rules shall prevail. If the act occurred before January 20, 2024, and continued after that date, and both the old and New Rules would impose administrative liability, the New Rules shall prevail.
IV. Conclusion
The New Rules reconstruct the jurisdictional levels of patent dispute administrative enforcement, clarify the penalties and jurisdictions for violations of the principle of good faith, and especially incorporate the normative content of "significant patent infringement disputes." This further improves the rules of patent administrative protection.
[1] Article 95: "Departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government that manage patent work, as well as departments of the people's governments of prefecture-level cities, autonomous prefectures, leagues, districts, and districts of municipalities directly under the Central Government with significant patent management workload and practical handling capacity, may handle and mediate patent disputes."
[2] Article 99, Paragraph 2: "If the patent marking does not comply with the provisions of the previous paragraph, the department responsible for patent enforcement at the county level or above shall order a correction."
[3] Article 101, Paragraph 3: "If a product is sold without knowing it is a counterfeit patent product and can prove the product's lawful source, the department responsible for patent enforcement at the county level or above shall order a halt to the sales."
[4] Article 11: "Patent applications must adhere to the principle of honesty and trust. All types of patent applications must be based on genuine inventive and creative activities and must not involve any fabrication or deception."
[5] Article 88: "The patentee shall not make an open license declaration or obtain a reduction in patent fees during the period of open license implementation through means such as providing false materials or concealing facts."
Over the course of a more than 7 years career at NTD, Mr. Zhang has represented many patent litigation cases for many global companies including Nippon Steel, JDI, Panasonic, Johnson & Johnson, DuPont, Evonik, SVOLT, Great Wall Motors, SAIC Motor and many others. Also, Mr. Zhang provided the clients other services like patent invalidation, free to operation (FTO) assessment and IP strategy consulting. Mr. Zhang also has extensive experience over non-competition cases.
Mr. Zhang has comprehensive background and experience in automation and law. His expertise in technical fields includes green energy materials and devices, intelligent equipment, automobiles, automatic driving, IOT, LCD, AI and industrial design.
