The new Chinese patent law came into effect on June 1, 2021. This amendment involves many aspects, such as introduction of partial design, service invention, distribution of patent monetization, abuse of patent rights, patent term extension, voluntary licensing of patent rights, administrative enforcement, increase in statutory compensation, and patent linkage system.

Among these changes, I think some are noteworthy. Let me introduce them as follows.

First, regarding the industrial design, the partial design system is introduced into the new law. When it comes into effect, the applicant does not have to change the dotted lines in the priority design to solid lines when filing in China. This amendment will cause major changes in the design patents enforcement. Apart from the newly introduced partial design system, the protection period of design patent is also extended to 15 years in order to join the Hague Agreement. And the domestic priority system of design patent is added as well.

Next, regarding patent term compensation/ extension, there are two aspects that should be noted:

a. If the patent is granted 4 years after the application date and 3 years after the request for substantive examination, and the delay is unduly caused by CNIPA, the patent protection period may be compensated as per the request of the patentee.

b. Another aspect is about the protection term compensation for the patent of a new drug approved for marketing in China. CNIPA may provide compensation for a period of time based on the request of the patentee. The compensation period shall not exceed 5 years, and the total effective patent right period of the new drug after compensation shall not exceed 14 years.

Then, regarding China’s drug linkage system, there is an article in the new law for the marketing of generic drugs. It says that in the process of drug marketing review and approval, if a dispute arises due to the patent rights related to the drug applied for registration, the relevant parties can sue before the court to request a judgment on whether the drug-related technical solution infringes the patent rights. The drug regulatory authority may, within a time limit, make a decision on whether to suspend the approval of the marketing of the related drugs based on the effective judgment of the court. The detailed implementation regulations are being formulated and will be released soon.

Finally, regarding patent right enforcement, there are 3 noteworthy points as follows:

a. Transfer of burden of proof: In order to determine the amount of compensation, the court may order the infringer to provide the account books and documents related to the infringement when the patentee has tried its best to provide evidence and the account books and the related information are mainly in the hands of the infringer.
If the infringer does not provide or provides false account books or information, the court may refer to the claims and evidence provided by the patentee to determine the amount of compensation.

b. Those who counterfeit patents can be fined less than five times the illegal income; If there is no illegal income or the illegal income is less than 50,000 yuan, a fine of less than 250,000 yuan can be imposed; If a crime is constituted, criminal responsibility shall be investigated according to law.

c. The maximum amount of statutory compensation is increased. We know that if it is difficult to determine the specific damage based on evidence, the judge can determine statutory compensation. The compensation could be more than 30,000 yuan and less than 5 million yuan.

The above are the most noteworthy points about the China’s new patent law in my opinion. Please feel free to contact me if you have any questions.

It may be that there are too many laws and regulations to be enacted and there are insufficient legislators or maybe the drug linkage articles in the patent law need to coordinate the operations of two authorities (CNIPA and the National Medical Products Administration, NMPA) and the interests of many private sectors. These factors have prevented us from getting the Implementation Regulations so far, but I think that it will arrive no later than the end of this year.

CNIPA recently announced ”The Interim Measures Related to the Implementation of the Revised Patent Law” (The Interim Measures) to guide the operation in the period without implementation regulations. In ”The Interim Measures”, for instance, it provides that the term of a design patent of which the filing date is before May 31, 2021 (inclusive) is ten years starting from the filing date, which means only design patents filed on or after June 1, 2021, can enjoy the 15-year protection period. Applicants who want to file patent applications in China recently need to consult patent attorneys in order to obtain the best benefits.

About the blogpost author:

Peter is a partner with Linda Liu & Partners, a top 10 IP firm in China. He has two decades practicing experience in IP systems, serving global clients from US, EP, Japan and other countries. He provides foreign companies with IP strategy planning, patent mining, patent portfolio building, patent procurement, patent reexamination, patent invalidation and administrative litigation, patent validity assessment, infringement assessment, etc.

Peter made the final rankings in IAM Patent 1000 in 2017 -2020, “As a US attorney who often needs detailed guidance from Chinese associates, I know I can count on Peter Zhang and his colleagues to deliver thorough analysis on matters, as well as concrete suggestions for moving forward.” reports one respondent.

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