Article 2

Designs mean, with respect to a product, new designs of the shape in whole or in part, pattern, or the combination thereof, or the combination of the color with shape and pattern, which are rich in an aesthetic appeal and are fit for industrial application.

The amendment is consistent with the regulations in major jurisdictions. The introduction of protection to new designs of the shape of part of a product allows better protection of the product’s innovative design element and will aid design patent enforcement.

Article 16

The unit that is granted the patent right shall reward the inventor or designer of an employment invention-creation. After such patent is exploited, the inventor or designer shall be given a reasonable amount of remuneration according to the scope of application and the economic results.

The state encourages the unit that is granted the patent right to implement property rights incentive mechanism and adopt methods including equity, options, and dividends, etc. to enable inventors or designers to reasonably share the proceeds of innovation.

The first item of the article obliges the patent owner to provide reasonable remuneration to employee inventors. We do not consider the addition of the second item, listing certain remuneration methods, is necessary.  Further, it may, in practice, give unintended importance to the forms of remuneration listed. We suggest a further review of the article.

Article 20

Any abuse of patent rights, which exclude or restrict competition thus constituting monopolies, shall be dealt with in accordance with the Anti-monopoly Law of the People's Republic of China.

It is not clear whether patent infringement litigation may be suspended as a result of the initiation of an anti-monopoly lawsuit; however, a judge in patent infringement proceedings is likely to have more power to determine the issue. It is also not clear whether this added article may cause more obstacles in enforcement to patent owners.

Article 29

or within six months from the date on which any applicant first filed in China a patent application for an industrial design, he or it files with the Patent Administration Department Under the State Council a patent application for the same, he or it may enjoy the priority right.

We support the extension of domestic priority to design patents.

Article 42

The duration of invention patent shall be twenty years, the duration of utility model patent shall be ten years, the duration of design patent shall be fifteen years, as of the date of application.

The extension of the term of protection for design patents is consistent with the regulations of Hague Agreement and will facilitate China’s accession. The patent owner may choose to maintain the design patent right for a longer period at its discretion.

Article 42

If an invention patent has been granted after four years from the filing date of the invention patent application and three years from the request for substantive examination, the patent owner may request compensation for the unreasonable delay in granting the invention patent, except for the unreasonable delay caused by the applicant.

This article does not provide that an extension of patent term may be granted as compensation for unreasonable delay Further, it does not make any provision for unreasonable delays occurring during the examination period e.g. that a patent applicant can, in that event, request acceleration of the examination.

We suggest further review of the article.

Article 42

The State Council may make a decision to extend the duration of invention patents of innovative pharmaceuticals which have been approved for marketing in China, to make up the time used for drug approval, and the extension period shall not exceed five years and the net effective duration of such innovative pharmaceuticals which have market launches shall not exceed fourteen years.

The addition of this article aims to provide a reasonable term of protection to innovative pharmaceutical patent owners given the requirements of the marketing approval procedure and pharmaceutical patent examination. This amendment is consistent with the law in major countries especially the US. It will help encourage drug innovation and creation. We support the amendment.

Article 65

For willful patent infringement with serious circumstances, the amount of compensation shall be determined ranging from one to five times

 the amount of compensation determined by the preceding methods.

The addition of punitive compensation will strengthen the protection granted to patent owners

Article 65

Where it is difficult to determine the losses suffered by the patentee, the profits which the infringer has earned through the infringement and royalties, the people’s court may set an amount of compensation of no more than RMB 5,000,000 in light of factors such as the type of the patent right, the nature of the infringing act and the circumstances.

The increase of statutory damages to 5 million RMB will help protect the interest of patent owners.  It is an appropriate figure given current economic growth.

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Article 65

In order to determine the amount for compensation, under the circumstances in which the right holder has endeavored to present evidence, and the related account books or materials are mainly in control by the accused infringer, the people’s court may order the accused infringer to provide account books and materials relating to the infringing conduct; if the accused infringer does not provide or provides false account books or materials, the people’s court may refer to the right holder’s claims and evidence to rule on the amount of compensation.

We support the addition of this article. It reduces the evidentiary burden on patent owners to prove the amount of unlawful profit made by the infringer, which in practice is difficult, as long as the rights owner has endeavored to present evidence. 

Article 69

If the patentee or interested party believes that the relevant technical solutions of a drug in market approval application fall within the scope of protection of the relevant patent rights posted on the China Patent Information Registration Platform for Listed Drugs, the patentee or interested party may file a lawsuit with the people's court or apply for an administrative ruling with the patent administrative department of the State Council within 30 days from the date the drug administration department of the State Council announces the application for market approval. If the patentee or interested party fails to file a lawsuit or request  an administrative ruling, the applicant for market approval of the drug may request the People's Court or the patent administrative department under the State Council to confirm that the relevant technical solution of the drug in the market approval application does not fall within the scope of protection of the relevant patent rights listed in China Patent Information Registration Platform for Listed Drugs.

This article contains general provisions in relation to establishment of the Pharmaceutical Patent Linkage system, but more detail will be required in relation to procedure in order to avoid possible confusion in practice. We suggest that the article be further reviewed.

The Patent Linkage system will be beneficial to pharmaceutical patent owners, but does give a quasi-judicial power to the Patent Administration, allowing it to determine whether  or not a product falls within the scope of a patent, similar to the determination of patent infringement, which, under the current law, is determined by the court.  

The article provides that patent owners may make a request to the Patent Administration or the Court within 30 days of the date the drug administration department of the State Council announces the relevant application for market approval. In practice, the Drug Registration Platform publishes the listed drugs for market approval and associated patent information from time to time, not regularly.  A period of 30 days for checking the publication of listed drugs, carrying out an initial analysis and initiating the relevant procedure, may place undue pressure on patent owners. We would propose extending the period.

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Article 69

Where the People's Court or the patent administrative department under the State Council makes an effective decision or administrative ruling within nine months from the date on which the request of the patentee or interested party is accepted, with respect to the application for market approval of the chemical drug that has passed the technical review, the Drug Administration under the State Council may make a decision on market approval, based on the decision of the people's court or the administrative ruling of the patent administrative department under the State Council. If the party concerned is not satisfied with the administrative ruling of the patent administrative department under the State Council, he/she may sue in the people's court within fifteen days from the date of receiving the administrative ruling.

This article aims to limit the time for a court decision or administrative ruling to nine months. The Drug Administration can then decide, on the basis of that decision or ruling, whether or not to grant market approval. The article will be beneficial to generic drug manufacturers, allowing them to get their products to market more quickly.  Pharmaceutical patent owners will be prevented from utilizing the procedure in bad faith to delay market launch.