The Patent Law Of The People´s Republic Of China

Traditionally, Chinese society has been founded on the two Confucian precepts of deference to authority and use of conciliation to resolve disputes rather than on any system of "law" as known in the West.

However, since the adoption of the "Open Door Policy" to Western ideas in 1979, many laws have been enacted and China has moved rapidly towards a full-fledged legal system. Nevertheless it must be borne in mind that the idea of "law" governing relationships between private parties is still very new in China and it is likely that the traditional tendencies to defer to governmental institutions and to settle disputes by agreements rather than by legal determinations of rights may be major factors for many years.

The Chinese Constitution of 1982 (the fourth since the establishment of the People's Republic) specifically provides for protection of legitimate foreign interest in China, provides for protection of property, and unlike the previous constitutions, specifically provides in Article 41 that the state shall protect and promote inventions. However, even prior to this there had been recognition in China of the need for protection of industrial property.

Patents

On March 12, 1984, the People's Republic enacted a patent law, which came into effect on April 1, 1985. This law provides for invention-patent, utility model, and design patent protection. It is of interest to note that the characters chosen by the Chinese to translate the term "patent" on a literal translation mean "concentration right" or "monopolization right." Major amendments were effected with effect from January 1, 1993. Further amendments came into effect on July 1, 2001 and another revision was adopted on December 28, 2008 and came into effect on October 1, 2009. As with the previous laws, the amended laws continue to apply to inventions, utility models and designs, with most provisions being applicable to all three types of protection. Provisions that are specific to utility model and design protection are noted separately at the end of this article. The full set of implementing regulations for the new law has not yet been released. However, transitional regulations were published on September 29, 2009 making it clear that the new law applies to applications and patents having a priority date on or after October 1, 2009. The transitional regulations also provide, with one exception relating to the provision of search reports to the courts on design patents, the law as it existed prior to October 1, 2009 will continue to apply to patents and applications having a priority date prior to October 1, 2009. The State Intellectual Property Office (SIPO) has also issued a notice relating to implementation of a limited number of changes effected by the amended law.

Patentable Subject Matter

Article 2 of the Patent Law defines the term "invention" as "a new technical solution put forward for a product, method or the improvement thereof" and the term "utility model" as "a new practical technical solution for a product's form, structure, or the combination thereof." Inventions contrary to Chinese law or social morality or detrimental to public interest are unpatentable under Article 5. Also unpatentable under Article 25 are¹:

Processes for obtaining plant or animal varieties are, however, patentable.

Novelty and Other Requirements for Patentability

Patents and utility models must have novelty, inventiveness, and usefulness.

For applications filed prior to October 1, 2009, a relative novelty standard applied. Novelty was destroyed by disclosure of the invention in publications in any country, or by public use in China or other disclosure to the Chinese public, before the priority date. The novelty of the invention of a later applicant was also destroyed by description of the same invention in an application of another party, filed before and published after the application of the later applicant. For applications filed on or after October 1, 2009, a tougher standard applies. Novelty is now destroyed by "any technology known to the public" before the priority date and by any prior application on file with the Patent Office irrespective of its ownership or inventors.³

For invention-patents, inventiveness is defined to mean that the invention "has prominent substantive features and represents a notable progress." Utility models have the lesser requirement that what is claimed has "substantive features and represents progress."

Usefulness is defined for both patents and utility models as something that can "be made or used and can create positive results".⁴

Certain types of public disclosure do not create novelty bars as long as a patent application is filed within six months of the disclosure. Disclosures falling within this category are disclosures at international exhibitions sponsored or recognized by the Chinese government, disclosures at a prescribed academic or technological meeting and disclosures without the consent of the applicant.⁵

Requirements of the Patent Specification

The law contains a fairly standard provision that the description set out in a patent shall set forth the invention or utility model in a manner sufficiently clear and complete so as to enable a person skilled in the relevant field of technology to carry it out; where necessary, drawings are required.⁶ As noted above, biological deposit requirements can be met by filing with an International Depository Authority under the Budapest Treaty. Where sequence listings are involved, these should be provided in electronic form as well as on paper. Working examples are normally required in chemical cases and should be of a sufficient number to make it reasonable to conclude that the invention is operable throughout the scope of the claims. In practice, our experience is that provision of an explanation as to why this is so will result in examiners allowing claims of not too limited scope. Some sort of efficacy data is required for pharmaceutical inventions. However, as long as this shows a reasonable linkage with treatment of a disease, this will probably suffice and actual clinical data are not required. It should, however, be noted that these data need to be in the application as filed and cannot normally be added later.⁷ In a controversial decision in 2004, the Patent Re-examination Board invalidated Pfizer's Chinese patent on Viagra under this provision holding that on the basis of the description given, one skilled in the art would not have been convinced that the compounds described would have been effective for their stated purpose. This decision was, however, reversed on appeal where the courts found that data in the patent was sufficient to correlate with the stated use.

The 2009 amendments to the law added a further requirement that patent applications for inventions based on genetic resources must set out the direct and indirect source of the genetic resource or provide an explanation as to why this information cannot be provided.⁸ Patents for inventions shall not be granted if completion of the invention relies on the use of genetic resources if the acquisition of such resources was a breach of related laws and regulations.⁹

Duration

Patents were initially granted for duration of fifteen years from the filing date. For cases filed after January 1, 1993, the term of a patent will be twenty years from filing, subject to payment of annual fees from grant. Additionally, patents that were still in force on December 11, 2001, when China became a member of the World Trade Organization will also be entitled to a term of twenty years from filing.

Procedure

Patent applications are published eighteen months after the priority date, after a preliminary examination on formal matters.

Substantive examination of a patent application must be requested by the applicant within three years from the priority date, but may proceed earlier if so required by the Patent Office. Prior to 2001, when requesting examination, the applicant was required to submit documents concerning search reports or official actions issued during the examination of corresponding applications. This requirement was removed by changes in the law that came into effect on July 1, 2001, although the examiner may still call for this information.¹⁰ Since that date, the applicant's opportunities to make voluntary amendments to the application has been limited to two periods: 1) at the time of requesting examination and 2) within three months of receipt of a notification from the Patent Office that it is ready to commence examination of the application. Additionally for applications proceeding under the PCT. amendments under PCT Article 28 or 41 can be made at the point of national phase entry. However, when proceeding under the PCT, it should be noted that the fees due depend on the number of claims that were present in the international phase and not the number after amendment at national phase entry.

Examination typically involves two official actions and if response to the second fails to satisfy the examiner of the patentability of the claims, re-examination can be requested.¹¹ After this there is a possibility of appeal to the Intermediate People's Court in Beijing. Interviews with examiners either in person or by phone are permitted after the first office action.

Revised guidelines that came into effect on July 1, 2006 have limited the right of applicants to file divisional applications of a previously filed divisional application.¹² They also raised the standards for securing patent protection for chemical inventions by requiring data relating to the efficacy of the compounds or compositions claimed while lowering the enablement requirement that must be met for any prior art description of claimed compounds to be regarded as being novelty-destroying. On the other hand, the new guideline specifically endorse the use of means plus function language for computer-related inventions, while still holding computer programs and computer-readable recoding media unpatentable.

Under Chinese practice, the applicant is advised when the application is ready for examination and given an opportunity to amend the claims at this point, thereby possibly simplifying examination. Under the 2006 guidelines, any new independent claims that are filed under this procedure will have to be filed within two months of receipt of a notification that the application is ready for examination.

Our experience of prosecution in China is that objections raised are normally reasonably cogent and clearly expressed. If one has good arguments they are usually accepted. Initially there were problems with some types of amendments of claims sought by applicants during prosecution. The law provides that amendments may not go beyond what was in the original disclosure.¹³ Unfortunately, the original wording of this section excluded the original claims as part of the disclosure on which such amendments could be made. The 1994 amendment to the law corrected this. Where problems do sometimes arise is in the scope of protection that the Chinese Patent Office regards as being properly supported by the description of the specific embodiments or examples. However, such problems are relatively rare, except when very broad general formulae with only limited exemplary scope are used in chemical cases.

Wherever appropriate, claims should be drafted in German style with a preamble acknowledging the closest prior art and a characterizing clause pointing out the distinction of the invention from the prior art. This form of claim is, however, not required if for example, the invention lies in combining a number of old features to achieve a new result, where the invention deprives from replacing a feature of the prior art with something new, or in dispensing with something the prior art taught to be necessary.¹⁴

Utility model and design applications receive a preliminary formal examination, but are not examined for substantive matters. If acceptable, following preliminary examination the utility model or design application will proceed to publications of allowance. Under Article 61, however, a court hearing an infringement action for a utility model, and since October 1, 2009 also a deign patent can require the patent owner to provide a search report from the Chinese Patent Office. The 2009 amendments to the law has made it clear that although one cannot have both a patent and a utility model for the same invention, it is possible to file separate patent and utility model applications for the same invention as long as the utility model is abandoned before the patent is granted.¹⁵ However, it is still not possible to convert a patent application into a utility model application. Nor is it possible to generate separate invention-patent and utility model applications from the same PCT application.

Opposition/Nullity Proceedings

Prior to July 1, 2001, China had a pre-grant opposition system under which oppositions against patents, utility models and designs could be filed within six months after the grant of the patent. This provision has been repealed and third parties ban now only challenge, a patent or utility model by a nullity suit before the Patent Re-examination Board.¹⁶ Anyone can file a nullity suit at any time after a patent has issued. The challenger bears the burden of proof during the proceedings. Amendment of the patent claims is permitted during the suit but only as long as it does not add subject matter, broaden the claims, change the category of invention claimed or generally add technical features not present in the granted claims

Under Article 47 of the Patent Law, if a patent is found to be invalid, it is deemed never to have existed, but shall have no retroactive effect on any prior judgment or mediation decision relating to infringement. However any damage caused in bad faith must be compensated.

In 2009, damages that had been paid to the patentee for infringement of a patent were added to royalty payments in the list of payments that may have to be repaid if the patent is found to be invalid and such refund is equitable.

Licensing

Under the 2009 law, a former requirement that licenses had to be in writing was repealed.¹⁷ It is specifically provided that unless otherwise agreed, a licensee has no right to authorize others to exploit the licensed invention.

Compulsory License Provisions

Compulsory licensing has been a feature of Chinese Patent Law since its initial enactment. The requirements have, however, been changed several times. Ever since the first law, invention-patents and utility models are subject to non-exclusive compulsory license in the case of non-working for three years from the date of grant.¹⁸ A compulsory license may also be granted to another patentee where it is needed to work a later invention, which is "technically more advanced" than the invention of a dominant patent.¹⁹ Under the current law compulsory licenses for these reasons will only be issued, however, on proof that the patentee will not grant a license on reasonable terms.²⁰

The rules relating to compulsory licensing were amended in 1994 so as to facilitate the grant of such licenses where the proposed licensee has requested a license from the patentee and this has been refused or the terms requested have been "unreasonable." A government spokesman questioned on this point drew attention to the fact that since the Chinese law came into force, in fact no compulsory license has yet been granted and indicated that this was proof that the Chinese government was serious about maintaining intellectual property rights and not permitting their erosion by compulsory licensing. It remains to be seen whether the implementation of the new law (which apparently makes compulsory licensing easier) will continue to follow only the policy guide lines set up under the old law.

The law on compulsory licensing was substantially amended by the 2009 law changes to add illegal monopolization as a basis for the grant of a compulsory license²¹and to implement the Doha Agreement permitting the grant of compulsory licenses for the manufacture of drugs for export to "countries and regions specified in related international conventions" to which China is a party.²². Additionally, the law was amended to provide that compulsory licensing for semiconductor technology is confined to situations where the grant of such a license is for the public interest or a response to a determination that monopolization has occurred.²³

Article 49 provides for the grant of compulsory licenses in cases of "national emergency. Or in an extraordinary state of affairs or where the public interest so requires:"

Scope of Patent Protection

Article 59(1)²⁴ of the Patent Law provides that the scope of protection is determined by the claims and that the specification may be used to interpret the claims.²⁵ Article 62 added by the 2009 amendments provides that anything that forms part of the state of the art is not an infringement.²⁶

For patents granted under the 1994 law amendment, a process patent may be used to prevent importation of the direct product of that process where the process is being carried out abroad.²⁷

An amendment to the law in 2001, added offers for sale to the list of acts that could constitute infringement²⁸ and established a rebuttable presumption that when a new product was the same as that produced by a patented process, the process used was that patented process²⁹, but removed from the scope of infringement any use etc of a patented product that occurred after a lawful sale of the product or where the products came from "legitimate sources".

Article 69³⁰ provides for a number of exclusions from patent protection, including:

Acts carried out for the purpose of providing information needed for the administrative approval to manufacture a patented drug or patented medical apparatus³².

Early drafts of the third amendment to the law (which ultimately came into effect on October 1, 2009, provided for statutory recognition of a doctrine of equivalents. Ultimately, however, it was decided to leave this to the courts. In Dongfang v. Jinling³³, The Supreme People's Court applied the doctrine of equivalents to find infringement by considering whether a particular claim element in dispute performed substantially the same function in substantially the same way to produce substantially the same effect as the element specified in the claim and whether the alleged infringement could be conceived by one killed in the art without creative effort. In Xinyi v. Renda³⁴ the Supreme People's Court reversed a division of the Higher People's Court of Liaoning Province to emphasize that there is not normally infringement if the accused product lacks a feature set out in an independent claim on which the accusation of infringement is based.

Enforcement

Article 11 gives the owner of an invention patent or utility model, except where otherwise provided for in the law, the exclusive right to exploit the patent. That is, to make, use, offer to sell, sell or import the patented product, or use the patented process, or to use, offer to sell, sell or import the product directly obtained by the patented process, for production or business purposes.

Infringement may be dealt with in one of three ways: (1) administrative proceedings; (2) civil judicial proceedings or (3) criminal proceedings. The limitation period for infringement is two years from the date when the patentee or any interested party obtains knowledge of the infringement or the date when they should have obtained such knowledge.³⁵ For many years the most common way to seek to enforce patents was by way of administrative action. By 2006, however, use of ordinary civil procedure had become more common.

So far as administrative enforcement proceedings are concerned, local administrative authorities have the power to order the end of patent infringement once they have been persuaded that a patent is being infringed. Such powers also include the right to destroy equipment used for manufacturing infringing items.³⁶ Administrative actions will not, however, normally result in the award of any damages and are more common in design and trademark cases than in patent cases. Administrative actions are, however, sometimes an effective way of obtaining evidence that can be used later in civil proceedings as long as the administrative proceedings are withdrawn before the civil proceedings proceed. The amendments to the law that came into effect on October 1, 2009 have increased the investigative powers of the administrative authorities³⁷ and the magnitude of the penalties they may impose.³⁸

Patent infringement in China is a matter of both civil and criminal law. Criminal proceedings may proceed in parallel with civil proceedings and are instituted following a complaint by the patentee to public security department, the procurator, or the court itself.³⁹

Civil patent infringement suits are brought before the Intermediate People's Court in the region in which the infringement occurs or where the defendant has its residence.⁴⁰ Appeal lies to the Higher People's Court (effectively the provincial appeal court) whose decision is final, but in very rare circumstances subject to reconsideration by the same court.

Chinese civil practice differs from Japanese practice in placing greater emphasis on conciliation rather than a legal determination of the party's rights⁴¹ and parties can opt to replace the legal proceedings with conciliation at any time up to the final determination of the case. Court procedure itself is similar to that in Japan in that there is no consolidated trial but rather a series of hearings before a judge during which facts are elucidated and arguments submitted. Both evidence and argument are normally submitted in writing, although witnesses may be cross-examined. In complex cases, the court will often appoint a technical expert to sit with the judge trying the case. Technical materials supplied by the defendant on the question of infringement may also be submitted to an independent expert to maintain their confidentiality. The Supreme People's Court has, however, held that although courts may hold trials in secret to maintain such confidentiality and may confine access to the allegedly secret materials of the defendant to specified members of the plaintiff's litigation team, there must be an opportunity for the defendants to cross examine the independent expert before the court takes a decision based on his report.⁴² If a nullity action has been commenced against the patent, the trial on infringement will normally be stayed until a decision has been reached in the nullity action.

China has no discovery procedure whereby documents must be disclosed to the opposing party. However, the court itself in its role as a fact finder can and does question the parties, order production of documents, and conduct inspection of premises. If evidence of infringement is found, its removal may be ordered for consideration during a court hearing.⁴³

Remedies for infringement are an injunction or damages, the latter being calculated as the profits made by the defendant, a reasonable royalty, or the actual economic loss suffered by the plaintiff.⁴⁴ From July 1, 2001 the method of calculating damages was amended so that increased damage awards may be possible. Under the amended law, the amount of damages for infringing a patent were calculated according to the patentee's loss caused by the infringement or the infringer's profits derived from the infringement. If it was difficult to calculate both of these, an appropriate royalty will be awarded. Under the 2009 law changes, the damages provisions were further reined to make it clear that the costs incurred by the patent owner in bringing suit were part of the damage suffered and to set out the manner of calculating damages as follows:

If it is difficult determine the losses which the patentee has suffered or the profits which the infringer has earned or the royalty fee for patent exploitation, the People's Court may award damages no less than 10,000 Yuan and no more than 1,000,000 Yuan depending on the type of patent right, the nature and gravity of the infringing act etc.⁴⁵

As noted above, China has an "innocent infringer" provision in its statute. Formerly, remedies were not available against one who did not know that the product he was selling or using was patented. With effect from July 1, 2001, this defense will be confined to safeguarding from an award of damages a party who does not know that the product being sold or used is infringing and "who can prove that he obtained the product from legitimate channels of distribution."

Patent invalidity is not a defense to an infringement. The right to decide upon the validity is confined to nullity proceedings in the Patent Office.⁴⁶ If nullity proceedings are pending in the Patent Office, the court has the right to stay its proceedings until the Patent Office reaches its decision. In the case of infringement actions relating to utility models and designs, such a stay is almost automatic. In invention patent cases, however, such stays are not so common.

Since July 1, 2001, it has been possible to obtain preliminary injunctions in China.⁴⁷ Prior to this the courts could, in cases of emergency, order "advance execution" which can give relief similar to that of a preliminary injunction.⁴⁸ The court also has the power to make orders for preservation of evidence or property prior to a decision if this is necessary. Such relief is, however, rare in patent infringement cases and requires that the plaintiff provide a guarantee, normally equal to the value of the evidence or property "preserved."

Patent infringement trials in China typically take from two to four years and cost less than $100,000. There is no provision for the loser to pay the costs of the winner, but the plaintiff will normally include its costs for the action in the damages it claims.

In 1994, new penalties were introduced for those who falsely indicate goods are patented when they are not.

Joint Ownership

Article 15 of the law, which was added by the 2009 amendments, makes it clear that in the absence of an agreement, each co-owner will be entitled to exploit or grant a non-exclusive license under the patent but royalties will have to be split between the co-owners. "Except for [this situation] the exercise of a jointly owned patent application right or patent shall be consented by all co-owners". It therefore appears that all co-owners must agree before an infringement suit can be brought.

Prevention of Importation of Infringing Articles

The Customs Regulations for the Protection of Intellectual Property Rights in China were promulgated on July 5, 1995, and went into effect on October 1, 1995. The Regulations provide for special measures to bar the import/export of infringing goods and will enable the owner of a granted patent, trademark registration or copyright to file an application to record such right with the General Administration of Customs. The application will have to include full particulars of the intellectual property right and its owner as well as pertinent information concerning the infringement. The recordal will remain in effect for seven years and will be renewable indefinitely for additional seven-year terms. Customs will be permitted to change fees for the recordal, but no information on such charges is available yet.

When the owner of the recorded intellectual property right learns about the import/export of infringing goods, he may petition Customs to take measures for the protection of such right, including the temporary detention or confiscation of the goods. If Customs ascertains through its own sources that infringing goods are about to enter or leave the country, it may detain them and notify the owner of the recorded intellectual property right to enable him or her to apply to Customs for protection. The importer/exporter of the infringing goods may submit a written statement in reply to Customs within seven days of receipt of notification of the detention of the goods.

If Customs determines that the goods infringe a recorded intellectual property right, the goods may be confiscated. Should Customs conclude that there is no infringement, or no legal action is taken in court by the party or parties concerned within the prescribed term, or the owner of the recorded intellectual property right does not respond to the notification issued by Customs, the goods will be allowed to be imported/exported. In the event that it is shown that the importer/exporter of the goods was aware that they infringed the intellectual property rights of a third party, or if he or she reported falsely on the status of such rights to Customs, he or she will be subject to a fine in an amount equal to the CIF or FOB price of the goods. An initial decision issued by Customs at the administrative level is subject to an appeal for reconsideration at a higher level within Customs and the decision at the higher level is appealable to the court.

Foreign Filing for Inventions Made in China

Prior to the October 2009 changes to the law, for any invention made in China it was necessary for any Chinese person or entity to file a patent application in China before filing abroad. Following the law change, it is possible to obtain a foreign filing license from SIPO without having filed a Chinese patent application first.⁴⁹

Conventions

China is a member of the Paris Convention and became a party to the Patent Cooperation Treaty effective January 1, 1994.

Utility Models

Utility Model protection is available in China for a maximum duration of ten years, subject to payment of maintenance fees. Protection is confined to the shape or structure of a product. To be protectable by way of a utility model, the invention must have substantive features and progress whereas for protection by way of an invention patent requires "prominent" substantive features and represent a "notable" progress. Utility model applications are not subject to substantive examination. Courts or administrative agencies handling suits relating to utility models may, however, call for a report on the patent from SIPO. For utility model applications having a priority date prior to October 1, 2009, this will be a simple search report. For applications having a priority on or after that date the report will be a full patentability evaluation report.

Designs

Article 2 of the Patent Law defines a design for the purposes of the law as "a new design of a product's shape, pattern or the combination thereof, or the combination of its color and shape and/or pattern, that is aesthetically pleasing and industrial applicable." In the law changes that came into effect on October 1, 2009, Article 25(5) was added to exclude from protection any graphic design on a picture, color or combination of both, if its main function is identification, this amendment being intended to prevent copied trademarks from being patented as designs.

From October 1, 2009, a worldwide absolute novelty test has applied similar to that for patents for inventions. Under the amended law it is further required that a design "must be substantially different from prior designs or a combination of features of prior designs" — a tougher test than that applied previously which simply required that the design was "not similar" to prior designs that had been published anywhere in the world or used in China.⁵⁰ It is not necessary that the complete article be separately sellable to consumers in general or to consumers of particular components and accessories. The design is even protectable if it is partly or entirely functional.

Under changes to the law, which became effective on July 1, 2001 the grounds for challenging the validity of a design were extended to include challenges on the basis that the design is an infringement of another's copyright or trademark.

Each design patent application for design shall be limited to a single design, although two or more similar designs used on the same product, or two or more designs used on the products belonging to a single category and sold or used in sets may be submitted together in one application.⁵¹ Surface shading and broken lines are not permitted in the drawings. However, the 2009 law changes do permit the inclusion of "a brief statement" in the design patent to be used to interpret the drawings or photographs.⁵² According to initial guidance from SIPO, such a brief statement should include:

The application is automatically examined for compliance with formalities, especially that drawings are in proper form but no search is done. However, a court hearing an infringement action may require provision of a search report from SIPO Courts or administrative agencies handling suits relating to designs may, however call for a report on the patent from SIPO. For utility model applications having a priority date prior to October 1, 2009, this will be a simple search report. For applications having a priority on or after that date the report will be a full patentability evaluation report.⁵³

In China nullity actions are brought before the Patent Re-examination Board in the Patent Office rather than in the court hearing the infringement.⁵⁴ Nevertheless, it is a defense to an infringement action that the alleged infringement is the same as the prior art without the need to establish the invalidity of the design in nullity proceedings.⁵⁵ If nullity proceedings are brought and the design is found invalid and if it is if equitable under the circumstances, prior royalties or damages received by the design patent owner may have to be refunded.⁵⁶.

Under Article 11 of the law, the rights provided by a design patent differ from those applying to invention-patents and utility models in that they do not include acts of using the design, only acts of making, offering to sell, selling or importing a product embodying the design for production or business purposes. The right to bring an action with respect to offers for sale was newly added in the 2009 changes to the law. This change may be helpful in avoiding the need to have to prove an actual sale of the infringing article by a notarized purchase, which has in the past sometimes proved difficult in the case of, for example expensive items or items that the seller would only sell in large quantities.

Footnotes

^{1.As originally enacted the law also prohibited the grant of claims for computer programs as such, although from an early stage a practice developed to permit patents for computer-related inventions as long as what is claimed is the solution to a "technical problem" China's guidelines for patent examination have permitted apparatus or method claims for protection of computer-related inventions from the 1990's onwards.}

^{2.China adhered to the Budapest Treaty on international recognition of deposited microorganisms with effect from July 1, 1995. Since then it is no longer been necessary to send samples of microorganisms for deposit in China if access to that organism is necessary in order to comply with Chinese law relating to sufficiency of disclosure in patent applications. This requirement can be met by a Budapest Treaty deposit with any international depository authority recognized under the Budapest Treaty.}

^{3.Article 22.}

^{4.Article 22.}

^{5.Article 24.}

^{6.Article 26.}

^{7.Additional data can, however, be supplied, for example to rebut an allegation of lack of inventive step.}

^{8.Article 26(5).}

^{9.Article 5(2).}

^{10.Article 36.}

^{11.Article 41.}

^{12.Since July 1, 2006, the filing of a divisional patent application based on another divisional patent application has only been allowed in two fact situations:}

^{13.Patent Law Article 33.}

^{14.See for example the article by Huang Min in China Patents & Trademarks No 2 1994 p 42.}

^{15.Article 9 added by the 2009 law amendments. The Chinese Patent Office has issued a regulation requiring that when invention patent and utility model applications are filed on the same day, this fact must be indicated in both applications.}

^{16.Article 45. Since July 1, 2001, nullity actions have been permitted at any time during the life of the patent.}

^{17.Article 12.}

^{18.Article 48(1).}

^{19.Originally Article 51 but renumbered or as Article 54 in 2009 and made applicable only to requests for compulsory licenses for non use of the patented invention or its blocking effects on a subsequent patented invention.}

^{20.Initially three grounds for compulsory license were set out: failure to work, blocking a later patent and refusal to license. These have been amended in the various revisions of the law. As from October 1, 2009 the first two have been made subject to the third, as required by TRIPS.}

^{21.Article 48 last paragraph.}

^{22.Article 50. Otherwise new Article 53 provides that except where a compulsory license is granted to eliminate the adverse effects of monopolization, compulsory licenses are to be granted only if used "mainly for the supply of the domestic market".}

^{23.Article 52.}

^{24.Originally Article 56.}

^{25.The effect of this seems to be that the court tries to use the claim as a guide to what the invention is and then see whether the infringer used the invention. However the number of cases tried is still very low and the doctrine of claim interpretation is still evolving. By amendment of the law to implement TRIPs, the definition of infringement in Article 11 of the law was amended as from July 1, 2000 to read:}

^{26.This will in effect permit a defendant to defend against an infringement action on the ground of lack of novelty without needing to commence a separate nullity action. China has an "innocent infringer" defense, which has provided that damages are not available against one who did not know that the product he was selling or using was patented and that the infringing product was obtained from a legitimate source. (Originally Article 63, which became Article 70 after the 2009 law amendments).}

^{27.Article 11.}

^{28.Article 11.}

^{29.Originally added as Article 57 second paragraph but renumbered as Article 61 by the 2009 amendments.}

^{30.Previously Article 63.}

^{31.Newly added in 2009. The intention is that such exhaustion is international as is shown by the fact that one of the rights deemed to be exhausted is that to prevent importation of the patented product or the direct product of a patented process.}

^{32.This "Bolar-type" exemption was newly added in 2009.}

^{33.(2001) Ming San Ti Zi No 1 (March 6, 2001). The invention was for apparatus for preparing parts of a musical instrument. The court found that the alleged infringement was not as good as the patented product. The court held that whether the alleged infringement was better or worse than the patented article was irrelevant as long as they both produced "substantially" the same effect.}

^{34.(2005) Ming San Ti Zi No 1 (August 23, 2005).}

^{35.Article 68.}

^{36.Article 57}

^{37.Patent Law Article 64}

^{38.Patent law Article 63. Under the new law infringers may be fined up to four times their illegal earnings or if there are no such earnings, up to 200,000 Yuan.}

^{39.Patent Law Article 63 and Criminal Procedure Law.}

^{40.Steps are being taken to designate only specific courts containing IP specialists, as the courts of first instance for patent litigation.}

^{41.Patent law Article 60 dealing with infringement proceedings commences:}

^{42.Eli Lilly v. Haosen (2002) Ming San Zhong Zi No. 8, decided June 17, 2003.}

^{43.Article 74 of the Civil Procedure Law provides for orders for preservation of evidence. Under the 2009 amendment of the Patent Law, new Article 67 provides that prior to bringing suit, the patent owner may seek a court order for preservation of evidence if the circumstances are such that evidence may be destroyed or later become difficult to obtain. Such an order may be made dependent on the patentee providing a guarantee against any harm that might be caused by the grant of the order. If the court issues such an order, a lawsuit must be commenced within 15 days otherwise the order will lapse.}

^{44.With effect from July 1, 2001 Article 60 was be amended to provide that the patentee may be compensated for its total loss arising from the infringement. In 2009 this provision was further amended and renumbered as Article 65.}

^{45.Article 65.}

^{46.It should, however, be noted that new Article 62 added to the law in 2009 provides for a defense to an infringement action if it is shown that the alleged infringement forms part of the prior art.}

^{47.Practice on the grant of preliminary injunctions is not uniform. Up to 2007,few preliminary injunctions had been granted in Beijing for patent matters; however, such grants were more common in Shanghai and Guangzhou.}

^{48.Since July 1, 2001, new Article 61 (renumbered as Article 66 in 2009) has permitted a patentee to seek an order requiring an apparent infringer to suspend its activities and preserve the relevant property in cases where the patentee "can provide any reasonable evidence that his right is being infringed or that such infringement is imminent and any delay in stopping the acts is likely to cause irreparable harm to his legitimate rights". The patentee may be required to give a security and will have to institute full proceedings for patent infringement within fifteen days of the court having given him a temporary remedy.}

^{49.Patent Law Article 20.}

^{50.Patent Law Article 23 as amended.}

^{51.Patent Law Article 31.}

^{52.Patent Law Article 59.}

^{53.Patent Law Article 61.}

^{54.Patent law Article 45.}

^{55.Patent Law Article 62.}

^{56.Patent Law Article 47.}

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