China: Enforcing Your Patent Right In China

Last Updated: 9 March 2016
Article by Gary G. Wu

With the fourth amendment of the Chinese Patent Law nearing completion, China will have moved ahead in perfecting its intellectual property protection system and improving patent protection enforcement. The amendment is aimed at solving the problems "difficulties in proving, long cycle, high cost, low compensation, and ineffectiveness", which patentees complain of occurring when enforcing their patent rights. A number of measures are added in the drafted amendments, which include strengthening patent protection, increasing law enforcement efforts, establishing sound long-term mechanisms to combat against patent infringement, promoting the combination of patent administrative enforcement and judicial protection, boosting law enforcement efficiency, and reducing the costs of protecting patent rights, which will guarantee the patentees' interests.

However, during patent judicial practices, patentees, especially foreign patentees, enforcing their patent rights should consider the characteristics of the Chinese Patent Law system, in particular the following.

1. Establishing a patent protection monitoring system to ensure quick discovery of violations

Due to China's vast territory, large population, and highly developed production and manufacturing market, it usually takes foreign patent holders a long time to find and investigate patent infringements. In the instances when foreign patentees have established a manufacturing plant in China, or have signed an exclusive patent license contract with a Chinese company, the patentees can entrust the manufacturing plant, the Chinese company, or a local IP law firm to oversee such patent protection and monitoring work.

Proper patent protection monitoring includes both keeping an eye on competitor patent applications and watching for suspected infringing products being sold through network platforms or by business entities. Through patent protection monitoring, a target company suspected of infringing patent rights can be detected in time. Sometimes, once a patent application similar to a granted patent owned by a foreign patentee is filed, a preliminary judgment can be made that someone is very likely to be copying the patented product of the foreign patentee. In such a case, the foreign patentee should take appropriate measures such as filing public comments or initiating the patent invalidating process against the competitor's patent in a timely manner to avoid the copied patent being granted to the competitor. Meanwhile, an investigation of the target company's production and sales can be made to discover if there is an infringement of the foreign patentee's patent rights.

Furthermore, real-time monitoring of the competitor's suspected infringement enables the foreign patentee to initiate a patent licensing negotiation.

2. Valuing the collection and notarization of evidence before taking any legal action

As a professional law firm that provides intellectual property protection services to domestic and international clients, Kangxin Partners frequently receives instructions from foreign clients to send warning letters to alleged Chinese patent infringers. However, in many cases, it is not favorable for foreign clients to send warning letters directly to the target person or company that infringes their patent rights. If their purpose is to stop the infringement, and the suspected target is a small-scale patent infringer, the patentee might consider sending a warning letter through a Chinese IP law firm to handle this issue. But for more serious cases of patent infringement, especially those cases in which patentees are expecting compensation from the infringing party for the economic losses caused by the infringement, the general steps to take include investigating the infringement behaviors and products of the infringement party first, and then notarizing the infringement evidences and facts including notarizing the webpages of the sales, notarizing the purchase of the products, etc., to collect infringement evidence for use as legal basis for identifying the infringement and claiming compensation for it during patent infringement litigation.

In order to resolve the patent enforcement "low compensation" issue, the fourth revision of the draft amendments to the Chinese Patent Law have added a punitive compensation system and compensation for willful patent infringement. This will increase the compensation awarded by two to three times of the original amount. The upper limit of statutory compensation of patent infringement also has increased up to RMB 5 million. However, according to the actual patent infringement cases heard by the People's Court, the key reason why the low level of Chinese patent infringement compensation exists is that the patentees often are not able to provide sufficient evidence to support the claimed amount of compensation. Therefore, before taking any legal action against patent infringement, in addition to evidence collection and notarization, by applying for preservation of the evidence before filing a patent infringement lawsuit, patentees should also obtain enough information and evidence of the infringement through the power of the court, which will support the claims of infringement indemnification.

3. Keeping the implementation of two-track system in China's patent protection in mind

China's patent protection is offered through judicial protection and administrative action enforcement protection, or a "parallel system". That is, besides the commonly used practices that are used to solve patent right disputes through civil action process, patentees could choose to request the local Intellectual Property Office to handle disputes or perform mediation without claiming for compensation. The local Intellectual Property Office, being fast, low cost and, efficient, is usually more proactive, flexible, and direct in patent protection than judicial protection. But with the increase of patent infringement cases in China year-by-year, the speed of some local Intellectual Property Offices in certain areas in handling patent disputes has been reduced by the lack of manpower, thus extending the case closing time to 2 or 3 years. Therefore, even if patentees want to stop competitors from infringing against their patents in time, the patentees are suggested to determine what the local Intellectual Property Office case processing cycle may be first and then determine whether or not to utilize patent administrative action enforcement protection. If a large backlog in the local Intellectual Property Office is discovered, it is recommended that patentees should abandon the administrative action protection and reach out directly to the People's Court and ask for judicial protection.

4. Making good use of the patent right evaluation report to reduce the time and cost of patent enforcement

The Chinese utility model and design patent system is similar to other countries' patent registration systems, which do not go through substantive examination of patent applications to grant the patent rights. This led to the poor stability of utility model and design patent rights. Correspondingly, the Chinese Patent Law provides patent evaluation through a reporting system. Patentees or interested parties can request the State Intellectual Property Office to issue a patent evaluation report after the search, analysis and evaluation of a utility model or design patent in cases of patent infringement dispute. The People's Court or the local Intellectual Property Office may also ask the parties in the patent infringement dispute to show a patent evaluation report.

Some patentees tend to start their process of patent litigation with a large amount of money and effort without knowing the stability of their own patents, and then realize that their patents lack novelty or inventiveness. The People's Court will also cease the trial when the other party presents a negative patent evaluation report and files a patent invalidation before the Patent Reexamination Board. Thus, it is very necessary for the patentees to assess the stability of their patents before taking any legal actions. It can be done either by obtaining an unofficial stability retrieval through a Chinese IP law firm or by applying directly to the State Intellectual Property Office to issue a patent evaluation report.

5. Taking full advantage of the Customs recordal mechanisms to protect the innovative products' own intellectual property rights

For foreign patentees who have already acquired Chinese patent rights, they may apply to China's State General Administration of Customs for Customs recordal protection of IPR. With the Customs recordal, the patentees will be sent a written notice immediately by Customs when any suspicious patent infringement import and export goods are found that match the records. Patentees may also request to detain suspected infringing goods after being informed of the relevant information. Customs recordal measures are especially beneficial to those patentees whose competitors' products are sold in countries other than China.

It is worth noting that China's State General Administration of Customs has suspended the official fees for keeping IPR records at Customs from Nov. 1st, 2015. For the cost of having Customs take actions and relief measures, patentees may add it alongside the losses they incurred for Customs warehousing, storage and disposal when calculating the reasonable expenses paid to stop the infringement after the identification during litigation and compensation claims against infringers.

6. Authorizing the right of Chinese IP law firms to safeguard their legitimate rights and interests

Since the implementation of China's basic national policy of reform and opening up, China has become one of the most popular investment opportunities for developed countries. The economic co-operations and exchanges between China and other countries in the world have also increased throughout the years. When patent infringement occurs, the foreign patentee can easily choose an appropriate IP law firm during their investigations in China. The following factors are very important when choosing a Chinese IP law firm: reputation, service quality and reasonable expenses. By selecting an appropriate Chinese IP law firm, foreign patentees will have access to real-time monitoring of the trends of competitors and have their legal rights and interests safeguarded through timely investigation, reliable infringement analysis, and trusted representation in patent infringem

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
Tee & Howe Intellectual Property Attorneys
CCPIT Patent & Trademark Law Office
CCPIT Patent & Trademark Law Office
 
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
Tee & Howe Intellectual Property Attorneys
CCPIT Patent & Trademark Law Office
CCPIT Patent & Trademark Law Office
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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