Highlights of the Draft 4th Amendment to the Chinese Patent Law

Since its implementation in 1985, the Chinese Patent Law has undergone three amendments in 1992, 2000 and 2008 respectively. At present, the draft of the Fourth Amendment has been reviewed by the Seventh Session of the Standing Committee of the 13th National People's Congress and is in the midst of extensive consultation.

 

The focus of this amendment is reflected in:

 

1.      Increase the compensation for a patent infringement and propose 1 to 5 times compensation standard.

Provisions: If the patent right is intentionally infringed upon with serious circumstances, the amount of compensation may be determined on the basis of one to five times the amount determined by (1) the actual loss suffered by patentee, (2) the benefit obtained by the infringer, or (3) the patent royalty; and where it is difficult to determine the amount of compensation, the amount of compensation that the court may determine at its discretion increases from “0.01 to 1 million yuan” (as stipulated in the current Patent Law) to “0.1 to 5 million yuan”. (Article 18, paragraphs 1 and 2)

 

2.      Identify the joint and several liability of network service providers for network infringement.

Added provisions: The patentee or interested party may, based on the effective judgment, ruling, or mediation document of the people's court, or the decision made by the patent administrative department ordering the cessation of the infringement, notify the network service provider to take necessary measures such as removing, blocking, or disconnecting links to the infringing product. If the network service provider does not take necessary measures in a timely manner, it shall be jointly and severally liable. (Article 17)

 

3.      Patent open licensing system.

Added provisions: Where the patentee files a written declaration with the patent administrative department of the State Council that it or he is willing to permit any other entity or individual to exploit its or his patent, and specifies the royalty payment method and standard, the patent administrative department of the State Council shall make an announcement and grant an open license. Any entity or individual that is willing to exploit an open-licensed patent shall notify the patentee in writing and may obtain the patent exploitation license after paying the royalty according to the announced royalty payment method and standard. (Article 10, Article 11)

 

4.      Extended term of protection of design patents.

The term of protection of design patents is extended from ten years of the current patent law to fifteen years. (Article 7, paragraph 1)

 

5.      Extended term of protection of patents for innovative drugs.

Provisions: For the purposes of making up the time for the review and approval of the listing of an innovative drug, the State Council may decide to extend the duration of the innovative drug invention patent of which the listings in China and abroad are applied for at the same time, the duration may be extended for not more than five years, and the total effective duration of the patent after the listing of the innovative drug shall not exceed 14 years. (Article 7, paragraph 2)