About the Amendment of the Patent Law of China

Yin XintianWAN HUI DA Law Firm & Intellectual

Property Agency

17 April 2013

BACKGROUND

Historic development of the Patent Law of China

Enacted on April 1, 1984 and enforced on April 1,

1985 Revised 3 times: 1992, 2000, 2008 4th revision pending :

November of 2011, State Council opinion on IP

enforcement August of 2012, SIPO first Draft for public comments March of 2013, SIPO second Draft submitted to State

Council

SCOPE OF THE PROPOSED REVISION

This revision concerns two aspects: Strengthening the enforcement of patent rights Extending the protection term of design

patents from 10 years to 15years in

accordance with the Hague Agreement of 1999

MAIN POINTS OF THE AMENDMENT

Patent Re-examination Board (PRB) decision

comes into effect immediately after public

announcement Administration has the power to investigate and

collect evidences of patent infringement Administration has the power to punish the

infringer Court may triple the amount of compensation

for willful infringement

Effective date of the PRB decision

The current situation:

Accused infringer very often challenges the

validity of the patent right as a defensive

measure The PRB decision:

either declaring patent invalid or maintaining the patent

valid are appealable to court The court usually suspends the trial until the final

decision of the court

Effective date of the PRB decision

The situation after the revision: The decision of the PRB comes into effect immediately

on its publication date (Amended Article 46) Administration or court shall timely handle the

infringement dispute cases in accordance with the PRB

decision (Amended Article 60) In case PRB decision maintaining patent right valid is

reversed by the final court decision, this has has no

retroactive effect on the decision (administrative or

judgment) about the infringement , if such decision has

already been executed ( Current Article 47)

Investigation powers of the administration

The current situation: The parallel system of patent enforcement:

administrative enforcement and judicial

enforcement

Administration has no investigation

powers, the plaintiff has the duty to collect

evidences of, just the same as judicial

procedure

Investigation powers of the administration

The situation after the revision: The Administration may investigate ex-officio

the evidence of patent infringement The investigation includes:

On-the-spot investigation Duplicate contracts, invoices, accounting books Examine relevant products and material Seal off and seize the infringing products for the

intentional infringement disrupting the market

order

The current situation: The administration may only order the infringer The administration may only order the infringer

to to stopstop the infringing act, no administrative the infringing act, no administrative

punishmentpunishment at all at all The administration may approach the court for The administration may approach the court for

compulsory execution if the infringer does not compulsory execution if the infringer does not

follow the order follow the order

Administrative sanctions for infringement

The situation after revision: For “intentional infringement such as group or

repeat infringement disrupting market order , The

administration may: Confiscate and destroy infringing products and

special equipment for the production Impose a fine on the infringer

If illegal turnover > 50,000 RMB:

Minimum fine = illegal turnover x 1

Maximum fine = illegal turnover x 5

If turnover < 50,000 RMB : maximum fine = 250,000 RMB

Administrative Sanctions for infringement

As for the evidence for determining

the damages, the revised Article 60

provides: The court may order the infringer to deliver

accounting books, material etc.. If the infringer refuses to deliver the

evidences or provide false ones, court may

grant damages in accordance with claim and

evidence of the plaintiff

Compensation ordered by the Courts

According to the situation:

Intention of infringer

scale of infringement and of prejudice,

The court may double or triple the

damages, the so called “punitive damages”

Compensation ordered by the Courts

From the plaintiff viewpoint:

Higher efficiency, less cost, quicker speed, more

compensation, Good news Administration will help him to investigate

evidences : Quite happy

From the defendant viewpoint :

New Article 46 combining together with new Article

60 and current Article 47 will be a serious threat The definitions for “group infringement ”and

“repeat infringement ”are not clear, and possibly

trouble some

COMMENTS

It is worth noticing that :

The number of patents has dramatically

increased

The quantity of infringement litigation will

follow

The chances to be a plaintiff one day and a

defendant another day are becoming more and

more equal

COMMENTS

patent applications filed from 2003 to 2012

308487 353807476264

573178693917

828328976686

1222286

1633347

2050649

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

applications filed by domestic and foreign applicants

Domestic Application

Foreign Application

patent rights granted from 2003 to 2012

182226 190238 214003268002

351782411982

581992

814825

960513

1255138

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

patents granted for domestic and foreign owner

patents for domestic owner

patents for foreign owner

Thank You

For Your Attention