October 2009
Revisions to the Chinese patent law (which also covers Utility Models and Design Patents) came into effect on 1 October 2009, with the aim of improving the quality of Chinese patents and their enforcement. Reflecting China’s growing importance in the Intellectual Property field and her desire to attract continued inward investment, the main changes to the law are set out below.
To bring China into line with the majority of other jurisdictions, disclosures anywhere and by any means (i.e. by publication, use, or otherwise) prior to the date to which a patent application is entitled can be taken into account when evaluating novelty and inventiveness of an invention. Hitherto, public use outside China has not counted.
When evaluating the novelty of an invention, an earlier application filed by any party before the date to which the later application is entitled, but not published by that date, can be cited as a conflicting application. Under the old law, an earlier application filed by the same applicant could not be cited as a conflict.
In the case of patent infringement, the defendant will be able to raise a defence of patent invalidity before the court. The defendant will not (as previously) have to invalidate the patent before the Patent Re-examination Board.
The search report on a patent application will be referred to as the evaluation report, and this report can be used as evidence before a court or administrative agency. A system of establishing evaluation reports for design patents after grant will also be introduced.
The courts have, for some years, allowed search and evidence-preservation orders to be obtained at short notice, and this procedure is now formalised.
The upper limit of damages which can be awarded in an infringement action has been increased, and provision for recovery of “reasonable expenses” incurred in stopping an infringement has been introduced.
In the case of action against an infringer by an administrative authority, the fine which can be levied against the infringer has increased, by a considerable degree.
Lastly, acts for obtaining regulatory approval for sales of drugs are now exempted from patent infringement (the so-called Bolar exemption).
Absolute novelty will be required for design patentability. As in the case of invention patents, the prior art now includes any design known to the public, in China or elsewhere, in any manner, before the date to which an application is entitled.
With the aim of eliminating “junk patents” for designs, a requirement akin to non-obviousness has been introduced. A design for which a patent right is granted is required to be substantially different from existing designs and from a combination of existing design characteristics. The threshold level for non-obviousness remains to be clarified, however.
Multiple designs can now be filed in a single application, if they are similar and relate to the same basic product – not quite as flexible as the EU system, but a welcome change nonetheless.
Design patent applications now require submission of a “brief description” of the design, whose purpose is to interpret the scope of protection of the design shown in the representations. This can be taken into account in infringement cases.
Patentability of some two-dimensional designs has been restricted. Specifically, two-dimensional patterns, colours, or their combination, mainly for the purpose of indication, will no longer be patentable. This will exclude some labels and the like, although it is possible that highly ornate versions will remain patentable as designs.
Offer for sale of a product incorporating a patent design is now included as an infringing act. Importantly, this will enable the proprietor of a design patent to take legal action, in the case of exhibition of an infringing product at a fair in China, for example.
Compulsory licences will now be obtainable in the case of non-working of a patented invention, on public health or anti-monopoly grounds.
Transfer of patent/design rights to a foreign entity will no longer require official approval, except in the case of technologies classified as “restricted”. There is also a “forbidden” category of technology, which cannot be transferred to a foreign entity.
If an invention is made in China and a patent application is required to be filed outside China, the need for a Chinese patent or design application to be filed in China before the application abroad, has been abolished. Instead, a security examination by the Chinese IP Office is necessary: this can be done by filing a Chinese application and, if no objection is raised within a certain time, it can be assumed that filing elsewhere is permitted.
Overall, we welcome these changes to the Chinese patent system and will be delighted to discuss them – or their implications for your business – in more detail. Forresters has a number of excellent connections in China, facilitated by many years of visits to the country.
For further information please get in touch with your usual contact at Forresters, or click here.