China: Highlights Of The Draft Amendment Of China's Patent Law

Last Updated: 18 February 2016
Article by Steve Song

The State Council of China released a new draft amendment to the Patent Law submitted by the State Intellectual Property Office of China (SIPO) on December 2, 2015 for public comments. The amended clauses that catch particular attentions are those concerning the expansion of administrative enforcement power, striking down willful infringement, increase in the upper and lower limits of statutory damages, adoption of ex officio examination in patent reexamination and invalidation procedures, and establishment of licensing of rights system and implied license system for standard essential patents (SEP).

1. Expanded administrative enforcement power

The most significant revisions in the draft amendment pertain to the expansion of administrative enforcement power in patent protection. For example, the patent administrative department of the State Councilmay investigate and deal with significant patent infringement and counterfeit cases and the scope of patent administrative departments of local people's government is extended to the city level (cities divided into districts) and county level (counties authorized by laws and rules)under Article 3; the decision of invalidating a patent does not apply retroactively to any previous decision on patent infringement penalties under Article 47; the patent administrative departments have the power to investigate and impose penalty against intentional infringement acts that disrupt market order, such as group infringement and repeated infringement under Article 60; the patent administrative departments may investigate and deal with cases involving patent infringement and counterfeit on the Internet under Article 63; andthe patent administrative departments may make inquiry, access and duplicate related information, conduct onsite inspection, conduct inspection of goods and items, and seize relevant materials, and impose the legal consequences of interfering with infringement investigation under Article 67.

With respect to these clauses, the main concerns of the industry are: The expansion of administrative enforcement power in patent infringement disputes runs counter to the private right nature of patent system and the international practice that emphasizes judicial protection of patent rights. When the administrative enforcement power is extended to the patent administrative agencies at city level (cities divided into districts) or even county level, the law overlooks the dual attributes in which the technical complexity is mingled with the application of patent laws,thereby creating conflicts between the criteria and guidelines for the courts and the administrative departments. Moreover, there are no common ground on what constitute a group infringement and a repeated infringement. The intervention of public power in those issues could end up with harming the innocent.

2. Ex officio examination

Article 41 of the draft amendment gives the patent reexamination board the power to conduct ex officio examination on patent cases; Article 46 gives the patent reexamination board the power to conduct ex officio examinationon invalidation cases.

With respect to these clauses, the concerns of the industry are: By vesting the patent reexamination board with the power to conduct ex officio examination in both reexamination and invalidation proceedings, it fails to differentiate the different natures of the two proceedings.Reexamination involves only one party, in which the patent reexamination board conducts reexamination of patent applications on behalf of the state; and invalidation involves two parties, in which the patent reexamination board acts as an arbiter. Giving the board authority toconduct ex officio examinationin both proceedings could deviate from the remedy nature of reexamination and the role of the board as an impartial judge in an invalidation action.

3. Indirect patent infringement

Article 62 of the draft amendment stipulates the joint and several liability of indirect infringer.

With respect to this clause, the concerns of the industry are: The issue of whether to add "indirect patent infringement" to the Patent Law has stirred up considerable arguments in the past amendments of the law. In addition, since the Tort Law has stipulated the liability of abetting and assisting parties as joint tortfeasors, it is meaningless to stipulate further the liability of such act in the Patent Law. Moreover, the clause may be abused by some patentees.

4. The liability of Internet service providers (ISPs)

Article 63 of the draft amendment stipulates the obligations of ISPs to determine whether their services are being used in patent infringement or counterfeit acts.

With respect to this clause, the concerns of the industry are: The "notice & remove" rule in the field of copyright should not be transplanted to the field of patent. Different from copyright and trademark, the determination of patent infringement requires more technical knowledge, patent claim construction is more complicated, and the rules of comparing the patent scope with the accused infringing acts are more professional. It will be hard pressed for ISPs to determine on their own whether the act of their service users constitutes patent infringement, and imposing such obligation on them will put them in an awkward position in the market and may seriously impede the development of ISP industry.

5. Increase in limits of statutory damages

Paragraph 2, Article 68 of the draft amendment stipulates the lower limit of statutory damage is RMB100,000 and the upper limit is RMB5,000,000.

With respect to this clause, the concerns of the industry are: The root cause of low damage awards in China's patent infringement cases does not lie in the lower limit of statutory damages, but in the lack of evidence to support the claimed damages. Thus, even if the limits of statutory damages increase, the low damage award problem still remains. Some people also voice their concern that raising the limits of statutory damages may encourage the plaintiff to be tardy in providing evidence to show his damage or the gain profited by the defendant, but to wait passively for the court to grant an award according to the prescribed statutory damages. It may even lead to the emergence of "patent trolls."

6. Licensing of right

Articles 82 to 84 of the draft amendment stipulate the licensing of rights system.

With respect to these clauses, the concerns of the industry are: Patent licensing is a matter freely determined by and negotiated between private entities. The matter should be regulated through market mechanism and it is not necessary for state power to step in. The intent of the licensing of rights system is to enhance patent implementation and utilization. But the basis for the licensing of rights system to work smoothly is built on the availability of high-quality patents, whereas the overall quality of Chinese patents is rather low at the present time.

7. Implied license for standard essential patents (SEPs)

Article 85 of the draft amendment sets the implied license system for SEPs that when a patentee participates in the formulation of a national standard without disclosing the SEP he owns, it shall be deemed that the SEP patentee permits the patent implementer to use his patented technology. The clause further stipulates that if the patentee and the implementer fail to reach an agreement on the licensing royalty, they can request the decision of the patent administrative department of the State Council.

With respect to this clause, the concerns of the industry are: On one hand, there is no similar stipulation in the patent law of developed countries, and the legislation seems overly hasty in the absence of in-depth study and consensus on SEPs. On the other hand, it is inappropriate for the State to unduly intervene how patentees exercise their rights. In addition, licensing royalty disputes are typical civil disputes that do not require a preliminary proceeding of administrative intervention. Huawei, in its opinion voiced on behalf of many other Chinese enterprises, thinks that this clause is not consistent with common international practice or the actual conditions in China, but will only end up with tying down Chinese enterprises.

Originally published 28th January 2016

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Wan Hui Da - Peksung IP Group
CCPIT Patent & Trademark Law Office
Chofn Intellectual Property
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Wan Hui Da - Peksung IP Group
CCPIT Patent & Trademark Law Office
Chofn Intellectual Property
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions