New draft for patent amendments in China
Currently, the scope of protection of a design patent must be limited to a specific complete product. Article 2 of the draft redefines “design” in order to allow a partial design—ie, a design for a portion of a product—to be patented. This will definitely make design patents more useful. Article 42 proposes to extend the term of design patents to 15 years in order to meet the requirements of the Hague Agreement, which China is preparing to join.
Article 60 defines that repeated patent infringement or group infringement, ie, infringement conducted by a multiple parties, is regarded as wilful infringement which disrupts market order. Local intellectual property offices have the power to handle such cases and may confiscate the infringing products and the relevant parts, tools, moulds or equipments. For repeated patent infringement or patent passing off, local IP offices may impose a fine of up to five times the illegal amount of sales.
Article 67 gives local IP offices the power to carry out investigations and onsite inspections, to review and reproduce contracts, invoices, account books, etc, to examine relevant products, and to seal up products that are proved to have passed off or infringed the patent concerned.
Article 68 prescribes that for wilful infringement a court may calculate damages by using the actual loss of the patentee, the illegal gain of the infringer or by making reference to multiples of the royalties, and increase the calculated damages by up to three times. Furthermore, the upper limit of statutory damages is proposed to increase from RMB 1 million ($152,000) to RMB 5 million. Of course, if damages can be calculated using one of the above three methods, they may be much higher.
Moreover, to reduce the difficulty of providing evidence for calculating damages, article 68 prescribes that if infringement is found by the court but the relevant account books or materials are mainly in the possession of the infringer, the court can request the infringer to produce the relevant account books or materials. If the infringer is not cooperative, damages may be determined with reference to the plaintiff’s claim and evidence.
The draft also introduces the concept of joint infringement. Article 62 prescribes that if a party knows that relevant products are raw materials, intermediate materials, parts or equipment specially used to exploit a patent, but still—without the authorisation of the patentee and for production or business purposes—provides such a product to another party that conducts the patent-infringing acts, the party and the infringer shall be held jointly liable.
