Patent Law amendment submitted to NPC Standing Committee for first reading

The fourth meeting of the Standing Committee of the 11th National People's Congress (NPC) reviews the amended draft of Patent Law in groups in Beijing on the morning of August 27.

Mandated by the State Council, SIPO Commissioner Tian Lipu makes explanations of the amendment to the meeting on August 25, saying that the 17th National Party Congress puts forward the goals of improving the capacity of independent innovation and constructing an innovative country. Meanwhile, the State Council has also formulated the Compendium of China National IP Strategy. For this purpose, we need to amend and improve the Patent Law to further strengthen IPR protection, stimulate independent innovation, promote the implementation of patent technologies, boost the patented technology transformation to reality productivity and shorten transformation cycle.

Right holders' cost of right maintenance is expected to be brought into infringement compensation

SIPO Commissioner Tian Lipu says that from the working experiences of patent protection, given a patentee's cost of right maintenance cannot be compensated, his or her losses caused by right infringement cannot be made up for. The prescription in the draft amendment will more effectively protect patentees' reasonable interests.

According to the draft, compensation for patent right infringement shall include right holder's reasonable expenditures in deterring such infringement. Meanwhile, in order to combat patent-related unlawful activities, the draft increases the amount of the fine from three-fold of the illegal earnings to four-fold in cases of patent counterfeiting; if there is no illegal earnings, a fine of more than 50,000 yuan to 200,000 yuan shall be imposed; it also increases the fine of patent imitation from 50,000 yuan to 200,000 yuan.

In addition, in order to improve the efficiency of judicial protection, the draft stipulates: in litigation activities, in case where right holders' losses, infringers' earnings and patent licensing fee cannot be clearly confirmed, the people's court can confirm a fine of more than 10,000 yuan but less than 1 million yuan according to the type of the patent right and infringement properties and circumstances.

During the process of group discussion, Deputy to NPC Lin Qiang suggests that measures should be added to simplify the handling procedures of repeated infringement as far as possible. After the verdicts or decisions supporting the establishment of infringement made by the people's court or administrative departments come into effect, given the infringer commits a similar act of infringing the same patent right, the patent administrative management department can directly make the decision of administrative punishment and impose fines. Simplifying the handling procedures can not only help IPR protection work, but also reduce the number of long pending patent infringement cases.

Deputy to NPC Song Fatang says that the problem of long pending patent infringement case is quite prominent in reality. Scientific and technical personnel have to spend much of their time and efforts in litigation activities, which not only influences the transformation of patent achievements, but also impacts technological innovation. Various parties have reached consensus in this regard, but divergences still exist in how to resolve the problem. It is a difficulty in the law amendment. According to previous versions of Patent law, when a right infringement dispute occurs, the parties involved may conduct negotiations; when negotiations fail to reach a consensus, they can go to management departments for judgment, and then go to re-examination board for re-examination; when they are not satisfied with the re-examination result, they may go to courts for litigation and some even sue patent management departments. The repeated courses usually lead to pending cases. I propose that when right infringement disputes occur, related parties first make consultations and then directly go to the court for judicial judgment when consultations fail.

Threshold of patent grant may be raised

The amended draft of Patent Law abandons the "relative novelty standard" and adopts the "absolute novelty standard," meaning China will further raise the threshold of patent grant.

According to the existing Patent Law, China's patent granting conditions adopt the "relative novelty standard," that is, the inventions and creations applying for patents of invention and utility model should not be publically published at home and abroad previously, be publically used domestically, or be known to the public by other means; designs applying for patent of design should not be publically published at home and abroad previously, or be publically used domestically.

According to the prescriptions, the technologies that are not publically published, though being used publically or corresponding products being sold in foreign countries, can be granted patent rights in China so long as the technologies are not publically used or corresponding products are not sold in China. This leads to the fact that China's patents are not high in quality. The standard can not benefit encouraging independent innovation, and holdbacks the application of existing foreign technologies in China.

Thus, the amended draft of Patent Law adopts the "absolute novelty standard," which requires inventions and creations that are to be granted with patent rights should not be known to the public at home and abroad previously. In addition, in order to further improve the quality of patent of design, the draft stipulates that no patent should be granted to the design of logo of plane prints.

During the group discussion, Chen Yulan, Deputy to NPC who attends the meeting as an observer, doubts whether the term "absolute" in the "absolute novelty" is suitable to be used in China during the current stage. Meanwhile, the amended draft does not include very clear stipulation of protecting patent of invention. For some industries, it will be a long and painstaking course to obtain the patent of invention. In some cases, the invention process may exceed a decade with costs reaching one or several million yuan. Under the circumstance, given the patents of invention cannot be timely protected, enterprises may lose their enthusiasm of inventing and creating. We should provide energetic protection in this regard, but the stipulation in the draft is not clear.

Applicants can directly apply foreign patents

According to the current Patent Law, inventions and creations completed inside China should first obtain Chinese patents before applying foreign patents.

The amended draft of Patent Law stipulates that any unit or individual can apply foreign patents for their inventions and creations completed in China, cancelling the requirement of first applying Chinese patents.

Taking into consideration that some patent application may involve China's national security and need secrecy examination, the draft stipulates that the inventions and creations completed in China should go through secrecy examination by patent administrative department of the State Council before applying foreign patents.

In group discussion, Deputy to NPC Ni Yuefeng says that article 21 of the amended draft of Patent Law stipulates secrecy examination, but does not mention examination results. I suggest that Section One of this article should be amended as "Any unit or individual can apply foreign patents for their inventions and creations completed in China, but should first pass the secrecy examination of patent administrative departments of the State Council."

No patent will be granted to genetic resource acquirement and utilization

According to the Convention on Biological Diversity participated in by China, the utilization of genetic resources should follow the principles of national sovereignty, consent and benefit sharing. It also stipulates clearly that patent system should be conducive for the goal of genetic resource protection.

China is a great country of genetic resources. In order to prevent the practice of illegally seizing China's genetic resources for technology development and patent application, the draft stipulates that for inventions and creations based on genetic resources, the applicants should declare in the patent application documents the direct and original sources of such genetic resources; when the original source cannot be declared, the applicants should state the reasons. No patent shall be granted to genetic resources acquired or utilized by means of violating related laws and regulations.

In group discussion, Deputy to NPC Ren Maodong says that the prescription "No patent shall be granted to the inventions and creations based on the genetic resources that are acquired or utilized by means of violating related laws" is very necessary. China is one of the world countries with the most abundant genetic resources and it is of great importance for China to effectively protect its genetic resources. I agree on this amendment very much.

Manufacturing and exporting patented medicines to some specific countries can obtain compulsory licenses according to law

According to the amended draft of Patent Law, in order to maintain public health, the patent administrative departments of the State Council can grant compulsory licenses to enterprises that manufacture and export the medicines with Chinese patents to some specific countries and regions.

These countries and regions are limited to: the least developed countries, members of the World Trade Organization (WTO) that lack, or have insufficient capacity of producing such medicines, but have gone through related procedures according to related treaties of WTO, which China has entered.

SIPO Commissioner Tian Lipu, while making explanation to the fourth meeting of the 11th NPC Standing Committee, says that the newly added prescription is based on the Declaration on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) and Public Health adopted by the WTO Doha Ministerial Meeting and the Protocol Amending the TRIPs Agreement adopted by the WTO General Council to implement the Declaration. The Declaration and the Protocol allow WTO members to breakthrough the limitation of TRIPs Agreement and grant compulsory licenses of medicine patents under specific conditions.

Meanwhile, the draft also newly stipulates that patent administrative departments of the State Council can grant applicants compulsory licenses for the practices that have been confirmed through judicial and administrative procedures as eliminating or restricting competition.