China has approved the 4th amendment to the patent law
The long awaited Amendments to Patent Law the People’s Republic of China have been (finally) approved, after several rounds of revisions, and the new Law will come into effect on 1st June 2021. It is the 4th revision of the Patent Law of the People’s republic of China, since it was fist issued in 1984.
The changes affect all the three types of patents available in China: Design Patent, Utility Model Patent and Invention patent. The full text has not yet been released but, according to reports and the final draft published for comments, the main changes can be summarized as follow.
ENFORCEMENT AND DAMAGES
- Statutory damages for patent infringement have been significantly increased. The amount of statutory damages granted by the court if the plaintiff cannot provide sufficient evidence of the losses suffered due to the infringement or the economic gain of the other party or determine the patent license fee, have been raised from the range of RMB 10.000 – CNY 1,000,000 to CNY 30,000 (Around EUR 3,800) – CNY 5,000,000 (Around EUR 636,000).
- Punitive damages; for intentional patent infringement, if the circumstances are serious, the punitive damages are set to up to 5 times of the awarded damages.
- The statute of limitation has been extended of one year: the patentee has now 3 years to file a complaint against the patent infringement, to be calculated from the day he knew or should have known about the infringement, as opposed to the previous time-frame of 2 years.
- During the course of a lawsuit, the judge can order to the defendant to provide accounting books and other information needed to determine the amount of compensatory damages; if the defendant/infringer refuses to do so, the court may determine the damages taking in consideration the claims of the right holder.
- The term of validity for design patents has been increased to 15 years, to bring it in line with the term of design patents under the Hague Agreement for the International Registration of Industrial Designs (China is not yet part of the system).
- Partial design protection will now be available in China, in accordance with current international practice.
- Patent evaluation report: when the new Law will enter into force, the request for obtaining the patent evaluation report could be made also by third parties; it will not be anymore a prerogative of the right owner. This change is particularly relevant and also applies to Utility Models. In fact, utility model and design will not undergo any substantive examination procedure before being granted in China. Therefore, also designs and utility models that are not new can be registered, although they can be later invalidated due to lack of novelty requirement. When a design or utility model’s owners intend to enforce it against an (infringing) third party, they will be required to present to the authorities the patent evaluation report issued by CNIPA, that will assess novelty. After the amendment, also the third party involved in the infringement can request CNIPA to produce the Patent Evaluation Report. Consequently, right owners that have registered their Design or Utility Model in China even after the same has been pre-divulged in other countries shall be particularly cautions before initiating enforcement action.
- Domestic priority of 6 months has been established: a design patent application can be filed within 6 months claiming priority of another Chinese design patent application.
- The time for submitting certified copy of priority document for utility model (and invention patent), has been extended to 16 months from the first filing date. Under the current Law, these documents have to be filed within 3 months from the actual filing date in China.
- Patent term has been extended for pharmaceutical patents: the new Law allows patentees of innovative pharmaceuticals to request a patent term extension of up to five years, if the effective term of the patent after obtaining market approval becomes less than 14 years. Extensions are not automatic but must be requested by the patentee.
- Patent term compensation: if the grant of an invention patent is delayed and takes more than four years from the date of filing of the application, or three years after the request for substantive examination, and such delay is not caused by the applicant, the patent term shall be extended to compensate the time lost due to the delay in granting. Extensions are not automatic but must be requested by the patentee.
- Patent linkage: Patent linkage was intensely debated over the course of the various drafts of the amendment that have been opened for comments. The approved text states that a pharmaceutical patent owner can seek a declaratory judgement on infringement within thirty days after the publication of an application for drug marketing approval for a generic drug. The party seeking the drug marketing approval may also bring a claim for a declaration of non-infringement, if the patent owner (or relevant stakeholder) does not initiate the action within the prescribed thirty days.
- Open patent license system a patentee can register a declaration with the Chinese patent office, stating that he is willing to grant an “open license” to any entity or person that accepts a license under certain pre-specified conditions. The annuity will be reduced for right owners opting for the open license system.
- Novelty grace period: if, within 6 months from the application date, the solution has been disclosed for the purpose of public interest due to national emergency, such disclosure shall not be deemed as destructive of novelty.
Our Patent attorneys remains at your disposal to discuss further details of the China Patent Law amendment and to evaluate the most effective strategy of protection of your rights in China.