The Chinese legislature passed the Decision on Amending the Patent Law of the People’s Republic of China at the end of 2008, and announced that the amendments (the Amended Patent Law) will take effect on October 1, 2009. The Amended Patent Law contains many important changes. Specifically, it defines the terms “invention,” “utility model” and “design patent,” promotes patent application and encourages patent exploitation, heightens the requirement for patentability, increases patent protection, and requires source disclosure of genetic resources.
First, according to the Amended Patent Law, “invention” refers to any new technical solution related to a product, a method or an improvement of a method. “Utility model” refers to any new technical solution related to a product’s shape or structure, or the combination of its shape and structure, which is suitable for practical use. “Design patent” refers to any new design of a product’s shape or pattern, or the combination of its shape and pattern, as well as the combination of the color and shape or pattern of a product, which creates an aesthetic feeling and is suitable for industrial application.
Second, to implement the goals set forth in the Outlines of the National Intellectual Property Strategy issued by the State Council in June 2008, the Amended Patent Law emphasizes the promotion of patent application and exploitation. Concerning patent application, an amendment eliminates the requirement that a Chinese individual or entity who made an invention in China must apply for a Chinese patent first. Under the Amended Patent Law, an applicant may apply for a foreign patent before applying for a Chinese one. However, in such cases, the Amended Patent Law also requires the applicant to report to the patent administration department of the State Council for a confidentiality review, prior to applying for a foreign patent. In addition, the Amended Patent Law no longer requires that a foreign individual or entity appoint a patent agency designated by the patent administration department to conduct its patent-related matters in China. Under the new law, any legally established patent agency could act as its agent. The Amended Patent Law also aims to promote the exploitation of patents. Specifically, the Amended Patent Law provides that a contract between or among the coowners on the exploitation of the patent will be honored. If there’s no contract, any co-owner may individually implement the patent or permit others to implement the patent in the form of a general license, and any licensing fee received will be allocated among all co-owners.
Third, the Amended Patent Law redefines the terms “novelty” and “inventiveness” to set a higher standard of patentability for invention and utility model. “Inventiveness” requires that the invention or utility model, compared with the existing technology, has a prominent and substantive feature and constitutes significant progress. “Novelty” requires that the invention or utility model is not an existing technology, and the Amended Patent Law defines an “existing technology” to mean a technology publicly known in China or abroad before the date of a patent application. This same rationale also applies to design patents. In addition, the Amended Patent Law requires the patented design and the existing design to be distinctly different.
Fourth, the Amended Patent Law raises the penalties for the acts of passing off patents and patent infringement. The amount of fine is increased from three times to four times of the illegal income generated from the act of passing off patents. If there’s no illegal income, the Amended Patent Law increases the maximum penalty from RMB50,000 to RMB200,000. With regard to patent infringement, according to the Amended Patent Law, the court may order the infringer to pay damages between RMB10,000 to RMB 1 million when the damages cannot be ascertained. In addition, the offenders are also responsible for expenses resulting from the patent owner’s attempt to stop the infringement.
Lastly, the Amended Patent Law provides new mechanisms to prevent the unauthorized use of genetic recourses. For an invention based on genetic resources, an applicant must disclose in the application documents the direct and original sources of the genetic resources, or the applicant must explain why the original source cannot be identified. Furthermore, no patent will be granted to an invention resulting from genetic resources that were unlawfully acquired or exploited in China.
The Amended Patent Law aims at building China into a country that is highly competent in creating, exploiting, and administrating patents. Currently, the legislators are working on revising the implementing regulations for the Amended Patent Law.