Intellectual Property: Draft amendment on China’s patent law tabled, higher penalties for violators

Less than three months after the Chinese State Council put its stamp on the patent law reform blueprint, the government submitted the draft amendment to the Standing Committee of the National People’s Congress (NPC), China’s top legislature, for first reading recently.

This will be the third revision to the law promulgated some 25 years ago. The previous two amendments were made in 1992 and 2000.

The latest amendment is expected to bring the law up to date and facilitate the application process of new patents by domestic as well as foreign entities.

Tian Lipu, commissioner of the Chinese State Intellectual Property Office, said the amendment to the Patent Law would make several important changes to the application process and enforcement of the law.

An important change involves the new restrictions that bring the law in line with best international standards and applications. In the past, patents were granted to applicants as long as the products were not on sale or publicly known in China. Under the proposed amendment, the patents of such products would not be granted in “absolute” terms, requiring that they are already registered overseas.

“The newly revised draft of Patent Law reflects that China is becoming more global and the desire by the authorities to comply with international IPR standards,” said Jessica Zhu, patent specialist of Jones Day, a US international law firm.

For example, the absolute novelty standard has long been adopted in Europe and the US. “The application of this standard in China can provide better protection of foreigner applicants in China,” she said.

Another important change is the proposed removal of the statutory requirement for all Chinese individuals and entities to first file applications in China for inventions made in the country. The revision would allow Chinese individuals and entities to file their patents for the first time in other countries, not necessarily China.

The draft amendments also put forward harsher penalty for piracy acts. Violators would be fined four times their illegal gains or face a fine of up to 200,000 yuan (about 29,200 U.S. dollars) if the have no illegal gains. The current figure for the penalty is three times and 50,000 yuan (around 7,300 U.S. dollars) respectively.