Editor's note: This article was prepared by Charles C. Liu, PhD, JD, Partner, Director of US and Canada Practices, Unitalen Attorneys at Law, and Jeanne J. Liu. In this article, the authors provide new information to update their earlier published article: “Waves of Changes in Chinese Patent Law and Regulations,” which was published originally in China Intellectual Property, 20:44-51 (2007) and subsequently appeared online in a series of four installments in January 2008 at ChinaBio® Today (see article). Unitalen, the largest private IP law firm in China (see website), is a partner of ChinaBio® Accelerator.
The authors focus their attention on the differences between Draft Revision 2008 and Draft Revision 2006, finding four major issues undergoing change: Willful infringement, misuse of patent rights and unfaithful accusation, inventions made in China, and empowerment of patent administration. A previous article covered the first two topics (see article). Here, the authors discuss inventions made in China and empowerment of patent administration.
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One of the hot topics for many foreign entities having business in China is the government’s regulation on patent applications for inventions made in China. The current patent law requires that if a “Chinese individual and entity” intends to file a patent application based on an invention made in China, the application must be filed in China first. As described in our earlier article, the Draft Revision 2006 proposes to change the provision on invention made in China such that the rule is applicable to “any individual or organization” and that a license or permit from the state patent administration is required for filing a patent application in a foreign country if the application is based on an invention made in China. Furthermore, a penalty provision has been added in the Draft Revision 2006 by stating that if a person filed a patent application in a foreign country based on an invention made in China without obtaining a license from the Chinese patent administration, the person’s patent application later filed in China based the same subject matter will be denied approval in China.
The Draft Revision 2008 is proposed to further revise the provision on inventions made in China and the new draft indicates more clearly that the rule of first file in China will be changed to the rule of foreign filing license, a rule similar to that in the United Sates. The new draft states, as in the 2006 draft, that a foreign filing license is required and adds further that such license shall be granted unless a secrecy order is necessary for national security or for important public interests. The Draft Revision 2008 further states that filing of a patent application in China for inventions made in China will be considered to include a petition for foreign filing license for the subject matter of the application, but that no foreign filing license is required if six months after receiving the corresponding Chinese application the state patent administration has not issued any order to prevent the applicant from foreign filing. It is noticed that the penalty provision to bar patent for filing without license remains in the newly proposed draft.
In the Draft Revision 2006, a provision was proposed to further empower the patent administration to handle patent disputes. In that earlier draft, the patent administration is intended to be given more power in handling cases of patent infringement or patent counterfeiting to examine the alleged infringing party and other relevant parties, to inspect the premises of the alleged infringing act, to inspect or copy relevant documents, and, if reasonable evidence of the illegal activities is provided, to seize or confiscate relevant products or equipment. In the Draft Revision 2008, however, this provision for administrative empowerment is removed. Such removal of the earlier proposed provision is in conformity with the legislative trend reflected in the recently released National IP Strategy Outlines. The outlines emphasize the important role of the judicial branch to strengthen China’s IPR enforcement system.
It is noticed that the draft revision on the following issues, as described in the authors’ earlier article, remains basically unchanged in the recent draft revision in comparison with the earlier draft: Novelty, inventiveness, design patents, source of genetic resources, crossover of invention patent and utility model, exceptions to patent infringement such as parallel import and “Bolar” exception, estoppels, and pre-suit preservation of evidence.
Although the draft revision of the Chinese patent law is close to being submitted for legislative review, the draft revision of the implementing rules of the Chinese patent law (“Chinese patent rules”) is in its initial preparation under the SIPO. It is expected that the first draft revision for comments and suggestions of the Chinese patent rules will be released by the SIPO by the end of 2008.
Based on the pre-drafting research reported early this year, the revision of the Chinese patent rules will be concentrated on the following examination-related areas: Preliminary examination, substantive examination, reexamination and invalidation, electronic filing system, patent fees and process, revival procedure, search reports, source of genetic resources, design patents, PCT applications, secrecy and foreign filing, and distribution and use of patent information; and the following areas not related to regular patent examination: Ownership of inventions sponsored by the state, rewards on employment-related inventions, compulsory licenses, and administrative patent enforcement.
While the whole nation is counting down to the Beijing 2008 Olympic Games, China released its National IP Strategy Outlines. The outlines clearly indicate that intellectual property protection is one of the nation’s fundamental policies. It is expected that after the Beijing Olympic Games, the process of revision of the patent law and regulations will resume in full swing.