TIPS^®  Taiwan Intellectual Property Special

China Updates

Draft of the Third Amendment of the Patent Law of the People’s Republic of China

The Patent Law of the People’s Republic of China was first introduced in 1984, and was amended in both 1992 and 2000. Following the “11th Five-Year Plan” for the development of China’s IP cause, the Chinese State government has increasingly been focusing on the formulation and implementation of new IP strategies. As the Chinese government makes strides to open its economy to multinational businesses, a stronger IP protection becomes a prerequisite. In view of this, the State Intellectual Property Office (SIPO) drafted the third amendment of the Patent Law in 2006, which is currently being reviewed by the State Council.

The third amendment is drafted based on seven major aspects. The inclusion of new rules that aim to build a service-based IP authority which prioritizes efficiency and effectiveness can be seen in the proposed draft. For example, under current practice, if a Chinese entity or individual intends to file a patent application in a foreign country, or a foreign entity or individual intends to file a patent application in China, the applicant in both cases must appoint an authorized “foreign-related patent agency” to act as its or his agent. The proposed draft abolishes the compulsory requirement to file through a “foreign-related patent agency.” In other words, a foreign applicant may entrust any authorized Chinese patent agencies when filing in China, and a Chinese applicant filing in a foreign country may choose to go through a Chinese patent agency, a foreign patent agency based in the designated country, or even file directly at the foreign patent authority where permitted by the law. In the new draft, locus of decision-making power lies in the applicant who can choose the filing strategy that best suits its or his budget and time. Amendments concerning patent applications and the possession and management of patent rights are also one of the seven major topics. The possession of patent rights in a State-funded or supported invention; the rights and obligations of joint-patentees; and the examination procedures concerning outbound applications of inventions made in China are more thoroughly addressed in the proposed draft.

As the first and second amendment of the Patent Law primary focused on invention and utility model patents, the enforcement of design patent right has been relatively weak in the past. The new draft proposes that without the authorization from the patentee, no one shall be able to exhibit, advertise or sell the product of a design patent; no design patent shall be granted to patterns, colors or their combination on a printed matter that merely fulfill the purpose of identification; a design which patent right may be granted must have distinctive differences from any prior designs; the introduction of the protection of associate designs, a design patent search system, and a requisite brief explanation which explains the drawings or photographs that cover the extent of protection of a design patent.

China currently practices relative novelty, meaning only an invention-creation that has been publicly used or made known to the public within China will be deemed lack of novelty. An invention that has been disclosed abroad by the same measure will not be deemed lack of novelty. The SIPO believes that such standard is outdated, and absolute novelty, which deems disclosure to public in any countries is a novelty bar, shall replace relative novelty as the standard of determination of the patentability of an invention-creation.

Building an innovative country is one of the State strategies, and the draft corresponds with such strategy by including in Article 1 of the Law that promoting economic and social development, and adapting to the needs to the building of an innovative country, should be the purpose of the Patent Law. Moreover, the draft also encompasses provisions that regulate the protection and collection of evidence, the amount of statutory compensation, civil and criminal actions against an intentional infringer, etc. We will publish a full special report on the details of each major amendment once the draft is approved and promulgated by the State Council.