The draft amendments to the Patent Law of the People's Republic of China (hereinafter referred to as the draft) were published for comments from the public on the National People's Congress website on January 4, 2019, after deliberation by the 13th Standing Committee of the National People's Congress. The draft proposes mainly three aspects of changes, i) measures for enhanced patent protection; ii) promotion of exploitation and application of patent, and iii) more user-friendly proceedings. The following will focus only on some of those.
1. The draft increases damages for infringement of patent rights
The damages for patent infringement is now determined on the loss of the patent owner, the profit of the infringer or by reference to the royalties. Statutory damages of no less than RMB 10,000 and no more than RMB 1,000,000 may be awarded when the damages cannot be determined by the preceding methods. According to the draft, for willful patent infringement with serious circumstances, the damages may be one to five times of the current damages. Where it is difficult to determine the damages from those three methods, the people’s court may award statutory damages of from RMB 100,000 to RMB 5,000,000 in light of factors such as the type of the patent right, the nature and circumstances of the infringing act.
2. The draft gives the Intellectual Property Offices more power
CNIPA (previously “SIPO”) is authorized to handle significant patent infringement disputes in the country upon request of the patent owner or an interested party.The local IP Offices may handle patent infringement disputes upon request of the patent owner or an interested party within their jurisdiction and may hear jointly those cases that relate to the same patent.
3. The draft puts more onus of proof on the accused infringer
For the purpose of determining the damages, where the patent owner has endeavored to present evidence, but the account books and/or materials relating to the infringing act are mainly under the control of the accused infringer, the people’s court may order the accused infringer to provide such account books and/or materials; where the accused infringer refuses to provide or provides false account books and/or materials, the people’s court may refer to the patent owner’s claims and evidence to rule on the damages.
4. The draft clarifies the joint liabilities of the Internet service provider
The patent owner or an interested party may request the Internet service provider to take necessary measures such as deleting, blocking or disconnecting the link to the infringing products based on an effective judgment, ruling, mediation agreement made by the people’s court or an administrative decision to cease infringement made by the IP Offices. The Internet service provider shall be subject to joint liabilities with the Internet user for the escalated portion of the damages if it fails to comply with the aforesaid request timely.
5. The draft extends the protection terms of design patent and pharmaceutical patent
The term ofdesign patent is extended from ten years in present Patent Law to be fifteen years. This implies that China will sign the Hague Agreement very soon.
The term of pharmaceutical patent will also be extended. The State Council may make a decision to extend the term of an innovative pharmaceutical patent that are synchronously applied for market launch in China and abroad, to make up the time for approval. The term extension shall not exceed five years and the effective patent term for such innovative pharmaceuticals on the market shall not exceed fourteen years.