The revised PRC Patent Law came into force on 1 October 2009, bringing about profound changes to the patent system in mainland China (see Client Alert: The PRC Patent Law Revised). The corresponding revisions to the Implementation Rules ("Rules") were recently released and will come into effect on 1 February 2010.
The Rules elaborate on certain procedures and standards prescribed in the Patent Law. Among other changes, the Rules set out the following new requirements and standards:
The Patent Law obliges all local and foreign entities and individuals who wish to apply for a patent in a foreign country in respect of an invention or utility model completed in the PRC to first submit the same to the PRC State Patent Office ("Patent Office") for a confidentiality check.
The Rules explain the requirement as follows:
- "Inventions or utility models completed in the PRC" refers to those inventions or utility models which have the substantive content of their technical solutions completed in the Mainland China
- An applicant who intends to file an application with a foreign patent office directly shall notify the Patent Office beforehand and give details of the technical solutions involved
- An applicant who has applied for a patent with the Patent Office but then wishes to file an application with a foreign patent office, shall apply for a confidentiality check before making the foreign application (provided that the making of an international patent application via the Patent Office shall be deemed to be a submission to a confidentiality check)
- The Patent Office shall within four months of the submission notify the applicant if a further confidentiality check is required on the ground that the invention may involve national security or significant national interests (the applicant is free to proceed with the foreign application if it does not receive any such notice within the 4-month period)
- If the applicant receives the notification, it shall wait further to see if the Patent Office will decide that the invention has to be kept confidential, such decision to be made not later than six months after the submission
The Patent Law stipulates that inventions created pursuant to an entity's assignment or by using the entity's resources shall belong to that entity. The entity is required to adequately reward the inventor after the patent is granted and/or utilised. This situation commonly arises in an employer-employee relationship.
It is important for the entity to set out the type and amount of reward in its policy made according to the law or reach an agreement with the inventor. In the absence of such provisions, the default statutory standards will apply. The Rules extend the application of those statutory standards to all kind of entities, not just state-owned enterprises under the previous law. Under those standards, the entity shall pay to the inventor a reward of not less than RMB3,000 for each invention patent or not less than RMB1,000 for each utility model or design patent. The entity shall also pay to the inventor a certain percentage of its business profits derived from the utilisation of the patent. For an invention patent or a utility model, the minimum percentage is 2 percent; for a design patent, this is 0.2 percent. If the patent is licensed out, the inventor shall be entitled to not less than 10 percent of the licence fees.
Liability for passing off a patent
The Rules expand the scope of activities that will be regarded as passing off a patent, including the representation of any applied-for patent as a granted patent, and any act which misleads the public into believing that certain technology or an invention is patented when in fact it is not.
The patent regime in the PRC is undergoing a period of significant changes. Since the enactment of the revised Patent Law last year, China has announced judicial interpretations and administrative notices on a wide array of patent matters. The newly revised Rules are the latest chapter of the reforms of which one should keep abreast.