Highlights on the Third Revision of Chinese Patent Law
China has revised Patent Law at the third time to provide a higher level of patent protection. This Third Amendment was adopted on December 27, 2008 and effective on October 1, 2009. The highlights on the third revision are listed as follows.
Higher standard for patentability
Filing both invention and utility model patent applications
Filing applications abroad for inventions made in China
Protection of Genetic Resources
Higher standard for patentability
The Third Amendment adopts absolute novelty for invention and utility model, which requires that the invention or utility model shall not be an existing technology, publicly known in China or abroad, before the date of filing. And such existing technology is also used for determining the inventiveness. Pursuant to the previous law, however, public use or knowledge outside China was not considered when determining novelty and inventiveness, so an invention that was publicly known or used outside China might be patented in China.
Additionally the Third Amendment also raises the standard in regard to a conflicting application. A conflicting application refers to such an application that is filed before but published later than the filing date of a subject application. According to the previous law, an identical conflicting application did not destroy the novelty of the subject application if both applications are filed by the same applicant. The Third Amendment provides that an identical conflicting application filed by any one can definitely destroy the novelty of the subject application.
Therefore such amendments enhance the standard of patentability.
The third revision made many changes on Design, which moves Design forward to the level adopted internationally.
Unpatentable subject matter
First, no patent right should be granted for designs about patterns, colors or combination thereof on ichnographic prints, mainly for identifying, such as labels on bottles. However textiles, such as curtains and bedspreads, are still patentable since they generally is not mainly for identifying. Pursuant to the previous law many design applications were about such ichnographic prints, mainly filed by the domestic applicants. Since such ichnographic prints are mainly for identifying but not for creating an aesthetic feeling, this revision made such a change.
Higher standard for patentability
Secondly, the new Law adds the following requirements for granting a design patent, in which the novelty requirement is similar to that for invention and utility model:
(1) any design to be granted must not be an existing design, publicly known in China or abroad before the date of filing; however, pursuant to the previous Law those publicly used or made known to the public by any other means in other countries were not taken as prior arts;
(2) any design to be granted must also not be identical to any design that is filed by any one else before the date of filing, with the State Intellectual Property Office("SIPO") and recorded in any patent document published after the date of filing;
(3) any design to be granted further must have obvious distinction compared with existing designs or the combination of characteristics of existing designs publicly known in China or abroad before the date of filing, which absolutely enhances the requirement for granting a design patent.
Enforcement
Pursuant to the new Law, the patentee has the right to prevent any other person from making, offering to sell, selling or importing the product incorporating his patented design. In previous Law, the patentee has no right to exclude others from offering to sell the product with his patented design. This amendment benefits the patentee's enforcement.
Application
Pursuant to the new Law, one design application can contain two or more similar designs for the same product, or two or more designs incorporated in products belonging to the same class and sold or used in sets. The previous Law only allowed the latter. This amendment significantly reduces the applicants' cost for filing similar designs for the same product.
The new Law also requires an applicant to file a brief specification with its application and allow the brief specification to be used to interpret the patented design, when the scope of protection of the patent right for design is determined by the patented design for the product as shown in the drawings or photographs, which definitely benefits the patentee. There were no such regulations in the previous Law.
Filing both invention and utility model patent applications
Under the previous law, it was a strategy for an applicant to apply for both invention and utility model patents for the identical invention-creation, since such a strategy could bring a quick protection through the utility model application due to its registration-like policy and a long term protection through the invention application, in which the applicant would abandon the utility model patent when receiving the allowance of the invention patent. Previously the applicant might file such two applications on the different dates. Such a strategy had been used for a quite long time since it is not prohibited by the previous law.
Now the third revision recognizes such a strategy and requires that applications for patent of utility model and patent of invention for the identical invention-creation be filed on the same day and that the applicant declare to abandon the patent right of utility model that has been granted earlier and not terminated at that time. Such requirements are due to the change policies on a conflicting application and higher standard of patentability.
Parallel Import
The new Law allows parallel import. Once a patented product is sold by the patentee or an entity or individual authorized by the patentee, any other person using, offering to sell, selling or importing that product should not be deemed an infringement of the patent right.
Bolar Exception
Now Bolar Exception is adopted too in the third revision. Therefore, no infringement should be found where the making, using and importing of a patented medicine or medical device is for regulatory approval purposes by a party intending to market the product after expiration of the patent.
Evaluation Report in Enforcement of Utility Model or Design
Pursuant to the new Law, in an infringement dispute relates to a utility model patent or design patent, the people's court ("Court") or the administrative authority for patent affairs ("AAPA") may ask the patentee or interested party to furnish an evaluation report on the patent rights made by the SIPO as evidence during trying such infringement disputes.
In the previous Law only patentees could request the SIPO to make a search report on novelty and inventiveness, and the SIPO did not accept the request from any interested party. Therefore the new Law offers a possibility for the alleged infringer to request the SIPO to examine on the patent at issue for the novelty, inventiveness and other substantive requirements. Such a policy may prevent the utility model or design patentee from abusing the patent rights since both the utility model and design patent are granted after registration-like procedures without any substantive examination on their novelty and inventiveness.
Codifying Defense of a Publicly Known Technology
The new Law also provides that where an alleged infringer in a patent infringement suit can provide evidences to prove that the technology or design it exploits was "existing technology" or "existing design" at the filing date of a patent at issue, no infringement should be decided, in which existing technology or design is defined as publicly known technology or design in China or abroad, which is introduced to the Patent Law for the first time.
Evidence Preservation
In the new law the provisions about preservation of property are cancelled since the civil procedure law has similar provisions and the preservation of property can be requested under the civil procedure law. The new law adds provisions on evidence preservation. Other than the preliminary injunction measure, the patentee or interested party can also, before instituting a lawsuit, request evidence preservation before the People's Court.
Increased Damages and Fines
Now the statutory damages are increased. In the third revision, if none of actual losses, a licensing fee and earned profits can be determined, the statutory damages are awarded between 10,000 to 1,000,000 RMB. And damages can include reasonable cost for seeking protection.
In the new law, for passing off, the administrative authority for patent affairs may impose a fine of not more than four times the illegal earnings, or if there is no illegal earning, a fine of no more than RMB 200,000. In the previous law the top limits of such statutory fines are three times and RMB 50,000 respectively.
Filing applications abroad for inventions made in China
The new law sets a secrecy review for any invention-creation that is made in China and intended to be filed for a patent application in a foreign country. If an application is filed in any foreign country without undergoing the secrecy review, the applicant's corresponding Chinese application will not be granted patent rights. Since the new Implementing Regulations of the Patent Law is still not open to the public, the detail regulations on the secrecy review are not clear now.
Protection of Genetic Resources
The third revision adds provisions to protect genetic resources. First any invention made relying on genetic resources and acquisition or use of the genetic resources shall not breach any relevant Chinese laws and regulations. It also requires that for any invention-creation made relying on genetic resources, the applicant disclose the direct source and the original source of the genetic resources in the application. An explanation must be included if the applicant is unable to provide the source of the genetic resources.
In the previous law there is no provision about joint ownership. Now in the third revision, it provides that an agreement concluded by the joint owners governs the exploitation of patent rights; if no such an agreement, each joint owner will be able to exploit itself or to grant to a third party a general license of the patent, and the royalties therefrom should be distributed between the joint owners. However without obtaining approval of all other joint owners, one owner could not exercise any other rights, such as assigning, abandoning, or exclusive licensing.
The compulsory license policy is changed in this third revision. First the general reasons for granting a compulsory license are clarified as that the patentee, without any justified reason, has not exploited or sufficiently exploited the patent within three years from the grant date or four years from the date of filing; and that the patentee's exploitation of the patent is considered to be monopolizing behavior, and the granting is for eliminating or restricting the bad effect of such behavior on competition. In the previous law, the reason is simply listed as that the request for authorization from the patentee have been made on reasonable terms and conditions and such efforts have not been successful within a reasonable period of time.
The new law also provides that a compulsory license may be granted for making and exporting a patented medicine to certain countries and regions for the benefit of public health in accordance with relevant international treaties concerned to which China is party. For the patents related to semiconductor technology, the granting of compulsory licensing can only limited for public interest purpose or against monopolization.