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New draft for patent amendments in China

19-02-2016

Stephen Yang

On December 2, 2015 a new draft of the fourth amendment to the Chinese patent law, which was sent to the State Council for review, was published.

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.

"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."

 

If a party knows relevant products or methods are patented products or methods but still, without the authorisation of the patentee and for production or business purposes, induces another party to conduct patent-infringing acts, the party and the infringer shall be held jointly liable.

Article 63 prescribes that an internet service provider may be held jointly liable if it knows or should have known, or is notified by a patentee, an interested party or a local IP office, that its user infringes or passes off a patent using its internet service, but does not take necessary measures to curb that behaviour.

Patentees may express in writing to the State Intellectual Property Office (SIPO) an offer to license a right, ie, a willingness to license their patents to anyone and specify relevant royalties. In such cases, SIPO will announce the patentee’s statement. If a patentee withdraws its statement, the previously granted licence of right shall not be affected.

Article 85 prescribes that if a patentee that is involved in the making of national standards fails to disclose any patents it owns that are essential to the national standards in the course of making the national standards, it is deemed that the patentee permits the user of the national standards to use the relevant patented technology.

Article 6 redefines “service invention-creation” by limiting it to an invention-creation made by a person executing the tasks of the entity to which he or she belongs and excluding those invention-creations by a person using the material and technical means of the entity.

Stephen Yang is a partner at Peksung Intellectual Property. He can be contacted at: yyong@peksung.com

Stephen Yang, Peksung Intellectual Property, patent, patent infringement, Hague Agreement, passing off, damages, patent amendment,

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