China releases new proposed amendments to patent laws

Although the Chinese Patent Law is a mere 31 years old, it has already gone through 3 major revisions, the last being 6 years ago.  In its most recent effort, China just released the “Draft 4th Amendments to the Chinese Patent Law” for public comments, which are due by Jan 1, 2016.

The proposed amendments will significantly strengthen areas such as patent enforcement and broaden design patent protection.  Notable amendments include an increase of potential statutory damages from 1M RMB (US $155K) to 5M RMB (US $776K), the expansion of the scope of the Patent Administrative Department (PAD) to include enforcement provisions, and the new PAD ability to in some cases make rulings regarding Standard Essential Patents (SEPs).  Many, but not all, of these changes were seen months ago in the previous draft.

China Law Translate has kindly provided an English comparison between the old and new versions, which also details the 3 possible methods to submit comments.

In my view, some important changes include:

Design patents:

• Partial designs are allowed (Art. 2).
• Extension of design protection to 15 years (Art. 42).

Patents (i.e., Utility Patents and Utility Models):

• Employers (more) clearly own inventions made by employee during the course of employment (Art. 6).
• In the absence of a contract, where an inventor makes an invention using the resources of the employer (but presumably not within the course of employment), then the patent right belongs to the inventor (Art. 6).
• Good-faith provision for patents (Art. 14).
• Clarification of inventor remuneration as to employees during the course of their employment (Art. 16).
• Clarification that patents may claim priority to a design patent with 6 months (Art. 29).
• Shifting of the burden of proof for allegations of infringement for manufacturing method patents (Art. 60 – actually from previous Art. 61).
• Joint liability established for manufacturers who knowingly-manufacture infringing goods as well as those who induce infringement (Art. 62).
• Joint liability established for ISPs with actual knowledge or who reasonably should know their services are being used for infringing acts, and do not promptly stop them (Art. 63).
• Enhanced damages (1-3X) for intentional infringement (Art. 68).

• Statutory damages range increased to a maximum of 5M RMB (Art. 68).
• Provision for court to determine damages if infringer fails to provide accounting, or provides a false accounting (Art. 68).

Others:

• Enhanced administrative powers and responsibilities of the PAD (Art. 3).
• Clarified that the Parent Review Board (PRB) may conduct reviews de novo, and is not limited to the appealed issue(s) (Art. 41, 46).
• PAD may also handle patent disputes (Art. 60).
• PAD may conduct infringement compensation mediation, and mediation awards may be enforced by a court (Art. 61).
• PAD may order enhanced (1-5X) damages where illegal counterfeiting proceeds exceed 50K RMB.  For proceeds less than 50K RMB, the fine may be 250K RMB (Art. 66).
• Enhanced criminal penalties for not cooperating with PAD investigations (Art. 67).
• Establishment of a patent credit information archive and its integration into the national credit system (Art. 74).
• PAD’s enhanced regulation of Patent Agents (Art. 75, 88).
• PAD to promote patents and the system (Art. 79).
• PAD to establish and promote a licensing announcement program (Art. 82-84).
• PAD may (upon request) make a ruling relating to issues related to SEPs owned by members of standard-setting organizations (Art. 85).

I especially welcome the transparency with which this process is being carried out, although the timing for comments could be a bit longer, especially in light of the Holiday Season.  However, I suspect that the Chinese Government seeks to finish the comment process well before the Chinese New Year Holidays that begin in early February 2016.