Increasing and protecting innovation are priorities at the highest levels of the Chinese government. At the 31st Group Study of the Political Bureau of the CPC Central Committee, Mr. Hu Jintao, President and General Secretary of China, emphasized China’s urgent demand to “strengthen the constructions of China’s intellectual property system and to greatly improve the capacities in the creation, management, protection and implementation of intellectual property.” China’s Premier, Mr. Wen Jiabao has noted that “self-innovation is...the backbone to prop up the rising of a country.” China’s patent laws were placed into force on April 1, 1985. Since that time, over 3 million Chinese applications have been filed. In 1992 and 2000, China amended its patent laws to provide better protection for inventions. Now, China’s State Intellectual Property Office (SIPO) is proposing a 3rd amendment to China’s patent laws. The process has been very open and has requested comments from countries, organizations, and companies around the world. Comments to the second draft of the 3rd amendment, dated December 27, 2006 were recently requested.

While China has a strong patent system, the 3rd amendment seeks to improve it even further. Certain terms would be statutorily defined to provide uniformity within the court system. For example, currently, “invention” is not defined. The 3rd amendment would define an invention to mean “any new technical solution relating to a product, a process or improvement thereof.”

Perhaps the most important change to Chinese Patent Laws would be in the area of enforcement. Further guidance to courts and practitioners regarding discovery and damages is provided in the second draft of the 3rd amendment (12/27/06). Article 67 provides the patent administrative department with the power to “investigate the facts” relevant to the infringement, to “inspect and duplicate” documents, to “carry out an on-the spot inspection,” and to “seal up or seize the products.” In regards to patent infringement damages, Article 68 provides that compensation “shall further include a reasonable expense the patentee has incurred in order to stop the infringing act.”

It is likely that the final version of the 3rd amendment will not be enacted until 2008. But until then, patent application filings will likely continue to increase. China has not only experienced a steady increase in the number of filings from non-Chinese entities, but has also seen an enormous increase in the number of domestic filings. In 2004, 65,786 domestic invention applications were filed. In 2005, 93,485 domestic invention applications were filed, and in 2006, 122,318 domestic applications were filed – a tremendous example of the increased focus on innovation within China.