Local Intellectual Property Offices may be granted more power of IP enforcement.

On August 10, 2012, the State Intellectual Property Office (SIPO) published the first draft of the proposed amendment of the Patent Law to seek public opinions, and made some explanation on the proposed amendment. The SIPO made a broad field survey in the first half of 2012. According to the survey, 30% of patentees in China encounter infringement problems, but only 10% of the patentees take measures to protect their patents. Many patentees have lost confidence on the patent system due to the difficulty to obtain protection. Aiming to reinforce patent enforcement, among others, the SIPO proposed the following amendment to grant more power to the Intellectual Property Offices (IPOs, which are responsible for administrative enforcement of patents), namely,

  1. Empower the IPO to order the infringer to pay damages, like the People’s Courts (Article 60.2);
  2. Empower the local IPO to take ex-officio actions in case of bad faith patent infringement, and to impose fine on the infringer (Article 60.3);
  3. Grant the IPO more power collection to collect evidence including seizure of infringement products and possibility to impose an administrative penalty on those who refuse to cooperate (Article 64);
  4. Impose punitive damages of up to three times in case of wilful infringement.
  5. Finally, the draft proposes that where a patent is still under dispute as to its validity, when a first instance decision has been by the Patent Re-examination Board made to maintain its validity, the patent may be immediately enforced, even if an appeal is lodged.

Comments

In the past years there has been a lot of argument on whether the IPO should be granted more power in enforcing patent law. This draft obviously reflects the SIPO’s position that the administrative organ should bear more responsibilities.

Local IPOs were fairly active in enforcing patent law till the middle of 2010’s. In the past decade more and more courts were granted jurisdiction over patent disputes, and patentees were led to go to courts to seek remedies. Congestion of IP-related lawsuits in recent years has caused a lot of incidental problems. In 2011 alone China’s courts heard around 60,000 IP-related civil lawsuits of first instance. In Guangdong Province where patent disputes are frequently raised, the courts heard over 16,000 IP-related civil lawsuits of first instance, among which around 5,000 lawsuits should involved patent infringement. In comparison the IPOs of Guangdong Province received only 220 complaints in 2011.

The proposed amendment would result in local IPOs become becoming a feasible alternative forum to alleviate the burden of courts in patent enforcement.

However, the SIPO’s proposed amendment raises a lot of concerns because it grants unprecedented power to the IPOs while the assessment of infringement is a technical and complex, matter. This is all the more so when the validity of the patent is still challenged in court. Furthermore, some take the view that granting damages should not be within the jurisdiction of an administrative authority (for example, the trademark law was amended in that respect when China joined WTO in 2001: the AIC had no more power to impose damages on the infringer).