After 12 years' waiting, the 4th version of the Chinese Patent Law with an aim of further motivating innovations and improving the mechanism for cracking down patent infringements was finally passed by China's top legislature on October 17, 2020. The amended Chinese patent law will take effect on June 1, 2021. We outline some of important changes below:
a. Changes that Aim to Improve Patent Prosecution
- Partial design is finally introduced into the Chinese patent system;
- The protection period for design patent will be extended to 15 years, in preparation to join the Hague agreement;
- Applicant can claim so called "domestic" priority within six months from his first Chinese design application as filed. This is more relevant to domestic companies and applicants; and
- Patent term adjustment (PTA) system, Patent term extension (PTE) system are both introduced.
b. Changes that Aim to Crack Down Patent Infringement and introduction of Pharmaceutical Patent Linkage system
- Statutory damages are increased to 30,000 CNY - 5 million yuan ($4,500 to $747,000) if the loss suffered by patent owner(s), the benefit gained by infringers or the patent royalty fees cannot be determined;
- If someone willfully and seriously infringes on others' patent rights, there will be a punitive damage of up to five fold of the actual loss suffered by patentee(s), the benefit gained by infringer(s), or the patent royalty fees;
- The date for taking action against patent infringement is extended to 3 years from the date when the patentee(s) or interested party knows or should have known about the infringement. This change is made to be in conformity with Chinese Civil Code;
- For calculation of damages, a more patentee-friendly procedure is introduced, similar to the discovery procedure in the U.S. This could significantly increase the effectiveness calculating damages in China;
- Patent administrative enforcement department is given larger and stronger power in dealing with patent infringement cases; and
- The Patent linkage system for pharmaceutical patents is introduced in China.
c. Changes that Aim to Promote Post-grant Patent Activities
- For duty invention (i.e., service invention), the way of adopting property right incentives, shares, share options, dividends and the like is encouraged to impel innovations;
- A new patent Public License System is introduced and will be available.
- Principle of good faith will be applied to mainly regulate SEPs and NPEs; and
- CNIPA is planning to build a strong Patent Information Service System together with other government administrative departments.
Generally speaking, these changes are friendly to the applicants and the patentee, and will certainly strengthen IP protection in China. We will provide detailed analysis for each of these amended Articles soon.
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