Per the “Determination of the Standing Committee of the Nationwide Individuals’s Congress on Amending the ‘Patent Legislation of the Individuals’s Republic of China’” (全国人民代表大会常务委员会关于修改〈中华人民共和国专利法〉的决定), China’s Nationwide Individuals’s Congress has determined to amend China’s Patent Legislation. The amendments will go into impact June 1, 2021. The highest 5 modifications embrace elevated patent time period and damages, amongst different modifications.
I. Elevated Patent Time period
The amended Patent Legislation will increase design patent time period from 10 to 15 years in Article 42. Presumably, that is so China can signal on to the Hague System for the Worldwide Registration of Industrial Designs, which requires a 15-year time period for designs. There are already 74 contracting events to the Hague System together with the U.S. and European Union.
Whereas the time period for invention patents stays the identical at 20 years from submitting , Article 42 of the newly amended patent legislation additionally supplies for each patent time period extensions and changes. Particularly, the 2 new paragraphs of Article 42 are as follows:
The place 4 years have handed because the software date of the invention patent and the patent proper for the invention has been granted three years after the date of the request for substantive examination, the patentee might request compensation for the unreasonable delay within the granting means of the invention patent, however the validity interval of the patent shall not be prolonged for unreasonable delay attributable to the applicant.
In an effort to compensate for the time taken for the overview and advertising approval of the a drug , the patent administration division of the State Council might, on the request of the patentee, grant compensation for a time period for brand new drug invention patents which have been accepted for advertising in China. The compensation interval shall not exceed 5 years, and the entire efficient patent proper interval after the brand new drug is marketed shall not exceed 14 years.
Be aware that each changes and extensions aren’t automated. The applicant should request them.
II. Elevated Damages
The potential for elevated damages is critical and patentees contemplating litigation might want to delay suing till the brand new legislation comes into impact in June 2021.
Renumbered Article 71 (beforehand Article 65) supplies for as much as quintuple damages for intentional patent infringement if the circumstances are critical. Punitive damages will already be out there by way of the brand new Civil Code efficient January 1, 2021 however the amended Patent Legislation codifies the quantity.
Article 71 additionally will increase statutory damages from 1 million RMB to five million RMB (~$748 thousand USD). Statutory damages are utilized when “it’s troublesome to find out the lack of the correct holder, the advantages obtained by the infringer, and the patent license price.”
Statute of Limitations
Article 74 (beforehand Article 68) will increase the statute of limitations by 50% from two to a few years to seize extra damages.
The Individuals’s Courtroom may order an infringer to supply account books and different data to find out damages. If the infringer doesn’t present the requested data or supplies false data, the Individuals’s Courtroom can depend on the (presumably excessive) claims of the rights holder.
III. Patent Linkage
Article 76 introduces patent linkage for pharmaceutical patents. Particulars of how this may be carried out had been detailed within the draft Implementing Measures for Drug Patent Dispute Early Decision Mechanism (Trial for Implementation) (Draft for Public Opinions) (药品专利纠纷早期解决机制实施办法（试行)( 征求意见稿)). Feedback are due by October 25, 2020.
IV. Diminished or Eradicated Annuity Charges
Articles 50 – 52 introduce an open license system the place a patentee can “voluntarily declare in writing to the Patent Administration Division of the State Council that it’s prepared to license any entity or particular person to use his patent, and specifies the strategy and customary for fee of license charges.” As reward for taking part, “the annual patent price paid by the patentee shall be lowered or exempted .” Particulars on how the annuity charges might be calculated for participation might want to await amended Implementing Guidelines and Laws.
V. Good Religion
New Article 20 reads,
Making use of for patents and exercising patent rights shall comply with the precept of fine religion. The patent rights shall not be abused to hurt public pursuits or the authentic rights and pursuits of others.
Any misuse of patent rights, elimination or restriction of competitors, which constitutes monopolistic conduct, shall be handled in accordance with the Anti-Monopoly Legislation of the Individuals’s Republic of China.
It’s unclear what this can apply to in observe however this can most likely be used to manage non-practicing entities and people licensing customary important patents. As well as, it could be utilized to those that sue firms registering for Preliminary Public Choices (IPOs) to derail their IPOs. For instance, it was lately reported that Zhejiang Huakang Pharmaceutical Co., Ltd.’s (浙江华康药业股份有限公司) IPO prospects had been broken attributable to a suspiciously timed patent infringement lawsuit and police are investigating.
Accordingly, the newly amended Patent Legislation strengthens patent rights in China. Nonetheless, we’ll must await Implementing Laws and Guidelines to see how the brand new Articles might be utilized really.
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