[Ip-health] China publishes draft amendments to patent law

[Suerie Moon]

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[ Picked text/plain from multipart/alternative ]
Amendment of=A0patent law quickened

By Tuo Yannan (China Daily)

 Updated: 2008-09-08 14:38







The formal adoption of the National Intellectual Property Strategy
has quickened the amendment of the Chinese Patent Law that seeks to
enhance IPR protection and to revamp the application process.



Less than three months after the State Council put its stamp on the
patent law reform blueprint, the government, on August 25, submitted
the draft amendment to the National People's Congress (NPC) Standing
Committee, the top legislative agency, for first reading. A draft law
requires three readings before it can be adopted.



If passed, this amendment will be the third revision to the law that was pr=
omulgated 25 years ago.



The previous two amendments were enacted in 1992 and 2000. The first
amendment added pharmaceutical compositions to the list of patentable
subject matter and inaugurated China's membership in the Patent
Cooperation Treaty (PCT). The second amendment brought China's Patent
Law into compliance with the Trade-Related Aspects of Intellectual
Property Rights (TRIPS) agreement.



The latest amendment is expected to bring the law and processes up
to international standards and best practices. Tian Lipu, director
general of the State Intellectual Property Office, told reporters that
the proposed amendments to the Patent Law would make several important
changes to the law's application process and enforcement.



One change involves the adoption of the so-called "absolute novelty"
standard that is applied internationally. Under this standard, patent
examiners are required to consider public use evidence both inside and
outside China when processing patent applications. Adoption of an
absolute novelty standard will have the effect of reducing patent
infringements, legal experts say.



The draft does not state whether this absolute novelty requirement would be=
 made retroactive.



Lu Yongxiang, vice-chairman of the Standing Committee of the
National People's Congress, says: "Since the implementation of the
Patent Law, among China's patent applications, including invention
patents, utility model patents and design patents, invention patents
only accounted for 19.9 percent, while foreign invention patent
applications accounted for 86.6 percent. Furthermore, domestic
invention patent applications, were mainly in traditional Chinese
medicine, food and beverages and Chinese character input methods."



Because of the lack of domestic core technology patents, 20 to 40
percent of sales revenue in China's mobile phone and computer
industries was paid to foreign patent holders. The draft amendments
seek to address this issue by streamlining the application process to
encourage Chinese inventors to file for patent rights.



"The newly revised draft of the Patent Law reflects the trend that
China is becoming more global and the desire by the authorities to
comply with the international IPR standards," says Jessica Zhu, patent
specialist of Jones Day, a US-based international law firm.


For example, the "absolute novelty" standard has long been adopted
in Europe and the US. "The application of this standard in China can
provide better protection for foreign applicants in China," Zhu says.



Another important change is the proposed removal of the statutory
requirement for all Chinese individuals and entiles them to first file
applications in China for inventions made in China. The revision would
allow Chinese individuals and entities to file their patents for the
first time in other countries, not necessarily China. In other words,
under the draft amendments, applicants could apply for foreign patents
even before obtaining Chinese patents.



But the applicants are supposed to go through checks held by patent
authorities of the State Council, China's Cabinet, for the sake of
state security, says Tian.



The checks are to prevent leaks to some foreigners or by
foreign-owned research labs in China that apply for patents to an
entity outside of China and circumvent the foreign filing requirement
of the current Chinese patent law. This foreign filing license regime
is the same as the system in the United States.



"For the Chinese applicants, we still advise them first to file
their patents in China which can better protect applicants'
intellectual property rights because patents have a strong regional
character," Zhu says.



To ensure the patent has economic benefits, the draft also provides
a "compulsory license". That means the government may grant a
compulsory license to a party qualified to exploit the patent if the
patent owner, without justification, has not exploited or sufficiently
exploited the patent three years after the patent was granted. The
draft also provides for a compulsory license to be granted if it is
judicially or administratively determined that the patent owner used
the patent right in an anti-competitive fashion.



>From 2001 to 2008 April, the State Intellectual Property Office had
processed 9,571 cases of patent disputes, and investigated 11,639 cases
of patent infringement. To better protect the intellectual property
rights of patent holders, the revision includes more detailed and
specific patent protection measures than the old ones.



The draft amendment increased the penalty for IPR infringement from
300 percent to 400 percent of the illicit profits and raised the damage
payment from 50,000 yuan to 200,000 yuan even if there is no profit
from infringement. And the draft for the first time makes a definitive
statute that the People's Court can order the infringer to pay from
10,000 yuan to 1,000,000 yuan in compensation when the damage cannot
specifically identified.


______________________________

Suerie Moon, MPA
Doctoral Candidate and Giorgio Ruffolo Doctoral Fellow
Sustainability Science Program, Center for International Development
Kennedy School of Government, Harvard University
suerie_moon@ksgphd.harvard.edu