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Major amendments to the Chinese Patent Law
Time: 2020-11-30
Major amendments to the Chinese Patent Law

Queenie X. QIU | Nov 20 2020


On 17 October 2020, the Standing Committee of the National People's Congress (NPCSC) approved the 4th amendment of the Chinese Patent Law, which will come into effect on 1 June 2021.

Here below are the three major amendments with respective details:

1. Strengthening the protection of the legitimate rights and interests of patent holders

a. Increasing compensations for patent infringement by
-  Introducing 1 to 5 times punitive damages for willful infringement;
-  Raising the maximum statutory cap on damages from RMB 1 million to RMB 5 million;

b. Redistributing the burden of proof
-  The courts may order the infringer to provide evidence for determining the amount of damage;

c. Improving patent administrative protection
-  For patent infringement disputes, strengthening the enforcement powers of the patent administrative authorities;
-  For patent counterfeiting, increasing fines of up to five times of illegal profits and the statutory cap on fines from RMB 200,000 to RMB 250,000 for those with no illegal profits or profits less than RMB 50,000;

d. Introducing the patent term extension (PTE) system
-  Compensation of patent terms for invention patents could be granted upon requests for the Office’s unreasonable delays during prosecution;
-  For innovative drugs, a maximum of 5 years patent term extension will be available, and the total effective patent period after marketing shall not exceed 14 years;

e. Adding provisions on early settlement procedures for pharmaceutical patent disputes
-  In case there is any patent dispute during the drug-approval process, the relevant parties can file a lawsuit before the people's court, or request an administrative ruling from the Patent Administrative Department of the State Council (i.e., CNIPA);

2. Promoting the use and exploitation of patents

a. Improving the system of employee inventions by confirming the employers’ disposal of rights and encouraging the implementation of incentive plans to motivate more outputs;

b. Introducing an open licensing system that allows patentees to publicly seek non-exclusive licenses (not applicable for exclusive or sole licenses). A reduction or exemption of the patent annuity fees may be applied during the implementation period of the license;

3. Improving the system for grant of patents

a. Design patents
-  Extending the protection period of design patents from 10 years to 15 years;
-  Introducing partial design protection;
-  Accepting domestic priority claims (within 6 months from the date of first filing in China);

b. Adding the circumstances in which the novelty grace period applies
-  Inventions first disclosed in the public interest in times of national emergency or exceptional circumstances can enjoy a 6-month novelty grace period. This amendment was triggered by the COVID-19 which would also make room for future applications in other emergencies or exceptional circumstances. The other three types of circumstances that still enjoy the 6-month novelty grace period are 1) first exhibition at an international exhibition sponsored or recognized by the Chinese Government; 2) first publication at a prescribed academic or technological meeting; and 3) disclosure by a third party without the consent of the applicant.

All these substantial changes reflect China’s improving IPR system. Jiaquan will remain at your disposal and please feel free to let us know if you have any questions on IP protection in China.

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