On December 2, 2015, the Legislative Affairs Office of the State Council solicited to the general publicfor opinions concerning the Amendment to the Patent Law of the P.R.C. (Draft for Approval). In this amendment draft, punishment against acts of patent infringement is dramatically increased. ThePeople's Courts may award the patentee damage up to RMB 5 million for willful infringement to patent rights.
According to the currently effective Patent Law of the P.R.C., no definite damage amount is specifiedto be awarded for patent infringement. It only stipulates that "the amount of compensation shall be determined on the basis of the actual losses incurred to the patentee as a result of the infringement...Where it is difficult to determine the losses incurred to the patentee or the gains obtained by the infringer, the amount shall be reasonably determined in reference to a multiple of the patent license fee (Note: i.e., 'royalties' in Taiwan) for this patent." Whereas in the new amendment draft, it is clearly stipulated that "for an act of willful patent infringement, the People's Court may impose by ruling adamage amount more than one time and less than three times the determined amount, depending on factors such as the circumstance, scale, injury consequences etc. of the infringing act."
In addition, it is stipulated in this amendment draft that "in case the patentee's losses, the interests gained by the infringer, and the patent license fees are all difficult to be determined, the People'sCourt may impose a damage ranging from RMB 100,000 to RMB 5,000,000." Since in the current Law, such circumstance would only be ruled by a compensation amount ranging from RMB 10,000 to RMB 1,000,000, obviously the damage amount for patent infringement has been dramatically raised in theamendment draft.
In recent years, there are frequent cases of infringements in the field of e-commerce. Therefore, it is specially stipulated in the amendment draft that "where the Internet Service Provider knows or should have known that the network user is using the provided network service to infringe or counterfeit a patent but fails to take necessary measures such as removing, masking, disconnecting the link of the infringing products in a timely manner to cease it, the Internet Service Provider shall be liable jointly with said network user. Where the patent administrative authority determines that the network user is using the Internet service to infringe or counterfeit a patent, the authority shall inform the Internet Service Provider to take necessary measures as mentioned in Paragraph 1 of this Article to cease such act. Where the Internet Service Provider fails to take such necessary measures in a timely manner, it shall be liable jointly with said Internet user for any additional injuries incurred."
Besides, in the amendment draft, the a provision is also added that "the Patent Administrative Authority may, at the request of the parties involved, mediate in respect of the amount of infringement compensation; If the mediation fails to reach a conclusion, the parties involved may file a suit with the People's Court.” “If either party refuses to fulfill or fails to completely fulfill theobligations as required in the mediation decision, the other party may request for compulsory enforcement of the obligations."
[Data Source: the SIPO of P.R.C. Official Website]