Summary of The Fourth Amendment to the Chinese Patent Law
Release time:2020-10-22
  The Author :    
Wenwen Wang, PhD
International Division of Patent Department, ACIP

The Fourth Amendment to the Patent Law of PRC:

Summary of Key Points

The Standing Committee of the National People's Congress passed the decision of 4th amendment to the Patent Law on October 17th, 2020, which will take effect upon June 1, 2021 We have summarized the key points of this amendment below

Improved system for protection of design patents:

-   the protection scope of design patents will be expanded to include designs for the whole or part of a product (Article2, paragraph 4);
-  the terms for design patents will be extended from ten (10) years to fifteen (15) years (Article 42, paragraph 1); and
  priority may be claimed from prior domestic design patent applications within six (6) months since the prior filing date (Article 29, paragraph 2)

Newly added non-patentable subject matter:

-  "Substances obtained by means of nuclear transformation" has been amended to "methods of nucleus transformation and Substances obtained by means of nuclear transformation", indicating that both methods and products of nuclear transformation will be non-patentable subject matter (Article 25, paragraph 1)

New legal situation for not losing novelty:

-  “… … where it was first disclosed for the purpose of public interest when a national emergency or any extraordinary state of affairs occurs” (Article 24, paragraph 1)

Term compensation for invention patents and especially for drug patents:

-   for unreasonable delays in the prosecution processof an invention patent, the patentee may request a term compensation for the patent (Article 42, paragraph 2); and
-   for the time delay caused by the administrative approval of new drugs, a term of no more than five (5) years can be requested, where the total effective term of the patent since the approval of the new drug shall not exceed fourteen (14) years (Article 42, paragraph3)

Open licensing system of patents:

-   a patentee may voluntarily request the patent administration department of the State Council to publish a withdrawable open license statement” which may be accepted by any entity or individual (Article 50);
-   the patentee may be granted a reduction or exemption of patent annuities for the time being of patent open licensing (Article51, paragraph 2); and
-   open licensing is limited to non-exclusive licenses only (Article 51, paragraph 3)

Strengthened enforcement against patent infringements:
-   the statute of limitations for patent infringement and for disputes over requesting royalties for using a published, pre-grant invention patent application has been amended from two years to three(3) years, in consistency with the latest Civil Procedure Law (Article 74);
-   it has been clarified that the compensation for patent infringement shall be calculated “according to the actual loss suffered by the right holder due to the infringement or the enrichment gained by the infringer due to the infringement”, which eliminates the debates about the priority of the calculation methods (Article71, paragraph 1);
-   punitive damages may be determined for intentional infringements of serious circumstances at one to five times the amount of compensation determined in accordance with the law (Article 71,paragraph 1);
-   the statutory compensation for patent infringement will be increased from 10,000 ~ 1,000,000 RMB to 30,000~5,000,000 RMB (Article 71, paragraph 2);
-   as for the burden of proof for determining the amount of compensation, the court may order the infringer to provide accounting books and materials related to the infringement, where the infringer, if failing to provide or provide false materials, may bear adverse consequences as the court may then refer to the claims and evidences from the right holder to determine the amount of compensation (Article 71, paragraph 4);and
-   as for passing off patents, the upper limit of administrative fines will be increased from four times to five times the illegal enrichment, or, if the illegal enrichment being zero or less than 50,000 RMB, from 200,000 RMB to 250,000 RMB (Article 68)

Patent linkage system for drugs:

-   during the marketing review and approval process of new drugs, the applicant of the marketing authorization, relevant patentees or interested parties may request the patent administration department of the State Council or the court to confirm whether the drug falls within the scope of patent protection, where the food and drug Administration may determine whether to suspend the approval process based on the court’s decision (Article76, paragraphs 1 and 2); and
-   the food and drug administration and the patent administration departments shall formulate specific measures for implementing patent linkage of drugs (Article 76, paragraph 3)

Preventingpatent abuse:
-   patentees are required to apply for or enforce patent rights under the principle of good faith and must not abuse their patent rights (Article 20, paragraph 1); and
-   monopolies constituted with the abuse of patent rights will be struck under the Anti-Monopoly Law (Article 20, paragraph2)

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