The proposed 4th amendment aims to strengthen the protection of
patent rights, which is a good news to applicants.
However, instead of improving current patent enforcement related
proceedings via judicial route, the current draft tends to achieve
the above goal via administrative route by granting more power to
the administrative organ (local patent bureau), which causes
concerns from overseas clients, and judicial system
The State Council of China issued an instruction on "Crush
IP Infringement of Producing and Selling Counterfeits and Fake
Products" on November 13th, 2011. According to this
instruction, the SIPO has started to draft new amendment to Chinese
Patent Law and issued a draft proposal on its website on August 9,
2012,for soliciting the public opinions for one month.
GOALS OF THE AMENDMENT
This amendment aims to submit appropriate measures against weak
patent protection, strengthen both administrative and legitimate
protections of patent rights, protect legitimate interest of
patentees, reduce the cost for protection of patent right, save
maximum social resources, and encourage innovation for whole
GENERAL CONTENTS OF THE AMENDMENT
Grant Administrative Organs the rights for investigation and
The right for determining monetary damages to be delegated to
local patent bureau;
Decision on Invalidation made by the PRB shall be effective on
the date of issuance;
Grant Administrative Organs the right for punitive monetary
damages determination; and
Grant Administrative Organs the right for cease and punishment:
four times punishment, up to RMB 200,000 (around US$33,000).
1) Grant Administrative Organs the right for investigation and
The right for investigation and collect evidences proposed is
conferred to Court and Administrative Organ by the Draft of the 4th
Amendment of the Chinese Patent Law (Draft).
According to civil procedure, Chinese courts have the right to
make an investigation under the guidance of a judge before and
during court proceedings.
In fact this proposal is primarily made for administrative
2) The right for monetary damages determination to be conferred
to local patent bureau:
According to current Chinese patent law, Administrative Organs
have only the right to mediate damages between plaintiffs and
In order to accelerate handling infringements, the Draft has
proposed to delegate the right for damages determination on
3) Decision on Invalidation made by the PRB should be effective
on the date of issuance:
According to current Chinese Patent Law, the invalidation case
could be handled only by the PRB. However, if any party is not
satisfied with the PRB's decision, it could bring an
administrative litigation to the court (two instances).
The Draft proposed that the decision made by the PRB should take
effect immediately upon publication. Based on the PRB decision,
courts or Administrative Organs should timely handle infringement
4) Grant Administrative Organs the right for punitive monetary
According to current Chinese Patent Law, the principle for
determination of damages is compensatory in nature.
However, considering the protection of intangible IP right is
cost consumptive and more difficult, in contrast, infringement of
IP right currently less risky and cost less. Obviously, the pure
compensatory principle is vulnerable for IP infringement and
For bad faith infringement on patent right, the Draft has
proposed to award patentee up to treble damages upon the scale,
situation and harmful effect of infringing acts.
5) Grant Administrative Organs the right for cease and
punishment: four times of the punishment, up to RMB 200,000 (around
Referring Chinese Trademark law, the Draft proposed to delegate
the patent Administrative Organs the right to organize the raid on
its own initiative against infringing acts that seriously violate
market order and the right to impose the administrative punishment
on infringers up to four times of the punishment or in case of
difficulty to determine unlawful gains, a fine of RMB 200,000
(around US$33,000) is imposed.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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