1 Legal framework

1.1 What are the sources of patent law in your jurisdiction?

The sources of Chinese patent law include:

  • the Patent Law adopted by the Standing Committee of the National People's Congress;
  • the Implementation Rules of the Patent Law promulgated by the State Council; and
  • a number of departmental regulations established by China National Intellectual Property Administration, such as the Guidelines for Patent Examination.

The current Patent Law, which came into effect on 1 June 2021, is the fourth amendment made in accordance with the Decision on Amending the Patent Law of the People's Republic of China adopted at the 22nd session of the Standing Committee of the 13th National People's Congress on 17 October 2020.

The current Implementation Rules of the Patent Law were promulgated by the State Council on 11 December 2023, and came into effect on 20 January 2024.

The current Guidelines for Patent Examination were issued by China National Intellectual Property Administration on 21 December 2023, and came into effect on 20 January 2024.

1.2 Who can register a patent?

Both Chinese individuals and entities can register a patent in China:

  • For a service invention, the right to apply for a patent belongs to the entity for which the inventor serves; and
  • For a non-service invention, the right to apply for a patent belongs to the inventor himself or herself.

A foreign individual or a foreign company/organisation with a habitual residence or business office in China can register a patent in China.

A foreign individual or a foreign company/organisation that does not have a habitual residence or business office in China can apply for a patent in China in accordance with:

  • agreements concluded between the country to which the applicant belongs and China; or
  • international treaties to which both the countries are parties.

Accordingly, a foreign individual or a foreign company/organisation from most countries in the world can register a patent in China.

Foreign individuals and foreign companies/organisations without a habitual residence or business office in China that intend to apply for a patent or handle other patent-related matters in China must authorise a legitimately formed Chinese patent agency to act on their behalf.

2 Rights

2.1 What rights are obtained when a patent is registered?

Once a patent for an invention or a utility model has been registered, except where otherwise prescribed by the Patent Law, no entity or individual may, without the authorisation of the patent holder, exploit the patent holder's patent – that is, manufacture, use, offer to sell, sell or import the patented product, or use the patented process, and use, offer to sell, sell or import the product directly obtained by the patented process, for any production or business purpose.

Once a patent for a design has been registered, no entity or individual may, without the authorisation of the patent holder, exploit the patent holder's patent – that is, manufacture, offer to sell, sell or import the products incorporating the patent holder's patented design, for any production or business purpose.

Any entity or individual exploiting the patent of another person must:

  • enter into a licence contract for exploitation with the patent holder; and
  • pay the patent holder a royalty for the exploitation of the patent.

The licensee has no right to authorise any entity or individual, other than the entity or individual as stipulated in the licensing contract, to exploit the patent.

After the publication of an invention patent application, the applicant may require the entity or individual exploiting the invention to pay an appropriate amount of royalties.

A patent holder has the right to label the patent on its patented product or on the package of the product.

2.2 How can a patent owner enforce its rights?

A patent holder can enforce its rights in China through administrative or judicial routes.

In the event of a dispute arising from the unauthorised exploitation of a patent, constituting infringement upon a patent right, the parties should attempt to resolve the dispute through negotiations.

If negotiations are unsuccessful or if the parties are unwilling to negotiate, the patent holder or any interested party may either:

  • initiate either a lawsuit with a people's court (judicial route); or
  • request an administrative authority for patent affairs for settlement (administrative route).

Regarding the administrative route, upon finding that infringement has occurred, the administrative authority for patent affairs may issue an order for the infringer to cease the infringing activities immediately. If the infringer refuses to comply with the order, it may may, within 15 days of receiving notification, file a lawsuit in the people's court in accordance with the Administrative Procedure Law. If the infringer neither files a lawsuit nor ceases the infringing activities within the specified period, the administrative authority for patent affairs may apply to the people's court for compulsory enforcement.

Upon request, the administrative authority for patent affairs handling the dispute may mediate regarding the compensation for patent infringement. If no agreement is reached through mediation, either party may initiate a lawsuit in the people's court in accordance with the Civil Procedure Law.

2.3 For how long are patents enforceable?

The term of patent rights for inventions is 20 years; the term of patent rights for utility models is 10 years; and the term of patent right for designs is 15 years, all commencing from the filing date.

Where a patent right for an invention is granted four years from the filing date and three years from the date of the request for substantive examination of the application, the patent administration department under the State Council may, at the request of the patent owner, extend the term of the patent to compensate for the unreasonable delay in the granting process of the invention, except for any unreasonable delay caused by the applicant.

In order to compensate for the time required for the assessment and approval of the marketing of a new pharmaceutical product, the patent administration department under the State Council may, at the request of the patent owner, extend the term of the new pharmaceutical-related invention which has been approved for marketing in China. The compensation term may not exceed five years and the total effective term of the patent right may not exceed 14 years from the date of marketing approval.

3 Obtaining a patent

3.1 Which governing body controls the registration procedure?

According to the Patent Law, the patent administration department under the State Council is responsible for the administration of the patent-related work throughout the country. It accepts and examines patent applications in a uniform way, and grants patent rights in accordance with the Patent Law.

The China National Intellectual Property Administration (CNIPA), as the patent administration department under the State Council, commissions the Patent Office of CNIPA to accept, examine and grant patent for patent applications. The Patent Office makes decisions on behalf and in the name of CNIPA.

3.2 What is the cost of registration?

The expenses associated with patent registration primarily consist of the official fee, attorney fee, and translation fee (if necessary).

Depending on the particulars of the application, the official fee for registration may encompass the following charges:

  • a filing fee and an additional fee for filing an application (eg, an additional charge for specification including drawings in excess of 30 pages, or an additional charge in excess of 300 pages or for claims in excess of 10);
  • a printing fee for publishing the application;
  • a fee for claiming priority;
  • a fee for filing a request for substantive examination for an invention application and a re-examination fee;
  • an annual fee (delayed payment of annuity within six months, 25% surcharge);
  • a fee for requesting the restoration of a right;
  • a fee for filing a request for correction of priority; and
  • a fee for requesting an extension of time limit;
  • a fee for making a change to the bibliographic data; and
  • a fee for requesting the evaluation report on the patent.

3.3 What are the grounds to reject a patent application?

An invention patent application may be rejected by the Patent Office based on any of the following grounds, among others:

  • The application violates laws or social morality or is detrimental to the public interest;
  • The application contains ineligible subject matter;
  • The application presents a double-patenting issue;
  • The application does not pertain to an invention, a utility model or a design as defined by the Patent Law;
  • The applicant files a foreign application without obtaining a foreign filing licence;
  • The technical solution to be claimed lacks novelty, inventiveness or practical applicability;
  • The specification of the application lacks a clear and comprehensive description of the invention or utility model;
  • The claims of the application are unclear or unsupported by the specification;
  • For inventions based on genetic resources, the application documents fail to state the direct source and the original source of the genetic resources;
  • The application fails to comply with the unity requirement;
  • The application violates the principle of good faith;
  • The independent claim fails to state the essential technical features necessary for solving its technical problem;
  • The amendment to the application (or a divisional application) goes beyond the scope of disclosure described in the initial specification and claims;
  • A foreign applicant does not correctly entrust a legally established Chinese patent agency;
  • The claims, description or drawings of the application are not correctly filed;
  • The design to be protected is not correctly or clearly shown due to defects of drawings or photographs;
  • The brief explanation of the design lacks necessary contents to interpret the design to be protected; or
  • The design to be protected is an existing design or lacks distinctive feature compared with existing designs or combination thereof.

3.4 What programmes or initiatives are available to accelerate or fast track examination of patent applications?

The programmes to accelerate examination of patent applications in China include the following

  • Prioritised examination programme: This programme is mainly applicable to:
    • patent applications involving energy conservation and environmental protection technology, new generation information technology, biology, high-end equipment manufacturing technology, new energy, new materials, new energy vehicles, intelligent manufacturing technology and other national key development industries; and
    • patent applications involving the internet, big data, cloud computing technology or the like.
  • The prioritised examination request for an invention application can be filed during the substantive examination phase, while the prioritised examination request for a utility model or design application can be filed after receiving the official filing receipt from the Patent Office.
  • Patent Prosecution Highway (PPH) pilot programme: This programme is mainly applicable to Chinese patent applications that have a counterpart application(s) in other countries or regions which have already received a favourable examination result so that one or more claims thereof are patentable or allowable. Generally, if a PPH request is to be filed for an application, the application must have been published and have entered the substantive examination phase, while the substantive examination thereon must not yet have been carried out. Alternatively, a PPH request may also be filed at the same time as the request for substantive examination. Via the PPH pilot programme, the Patent Office may consider the favourable examination results made by a foreign patent office to expedite the examination.
  • Rapid pre-examination programme: This is a programme for local IP protection centres to provide pre-examination services for patent applications involving some new technologies before an application is formally filed. The Patent Office will expedite the examination of a patent application if it has passed the pre-examination procedure conducted by local IP protection centres.

3.5 Are there any types of claims or claiming formats that are not permissible in your jurisdiction (eg, medical method claims)?

The following are not permitted in China:

  • claims for rules and methods for intellectual activities;
  • claims for methods for the diagnosis or treatment of diseases; and
  • claims for nuclear transformation methods and substances obtained by means of nuclear transformation.

3.6 Are any procedural or legal mechanisms available to extend patent term (eg, adjustments for patent office delays, pharmaceutical patent term extension or supplementary protection certificates)?

The Patent Law includes some provisions for the procedural mechanisms available to extend patent terms, so that patent term adjustment (PTA) and patent term extension (PTE) are available in China.

The provisions on PTA are set out in Article 42.2 of the Patent Law as follows:

Where a patent right for an invention is granted four years from the filing date and three years from the date of the request for substantive examination of the application, the patent administration department under the State Council shall, at the request of the patent owner, extend the term of the patent to compensate for the unreasonable delay in the granting process of the invention, except for the unreasonable delay caused by the applicant.

The provisions on PTE are set out in Article 42.3 of the Patent Law as follows:

In order to compensate for the time required for the assessment and approval of the marketing of a new pharmaceutical product, the patent administration department under the State Council shall, at the request of the patent owner, extend the term of the new pharmaceutical-related invention which has been approved for marketing in China. The compensation term may not be more than five years, and the total effective term of the patent right may not be more than fourteen years from the date of marketing approval.

3.7 What subject matter is patent eligible?

Inventions, utility models and designs are patent eligible in China. However, no patent right will be granted for any of the following:

  • scientific discoveries;
  • rules and methods for mental activities;
  • methods for the diagnosis or treatment of diseases;
  • animal and plant varieties;
  • nuclear transformation methods and substances obtained by means of the nuclear transformation method;
  • designs of the pattern, the colour or the combination of the two on two-dimensional printing goods with which mainly plays the role of identification; or
  • subject matter that violates laws or social morality or that is detrimental to the public interest.

3.8 If the patent office does not grant a patent, is an appeal available and to whom?

If the Patent Office does not grant a patent, a re-examination request can be filed with CNIPA within three months of the date of receipt of the notification of rejection, seeking re-examination.

If the patent applicant is not satisfied with the re-examination decision issued by CNIPA, it may file a lawsuit before a court (currently the Beijing IP Court) seeking a judicial review within three months from the date of decision.

4 Validity/post-grant review and/or opposition procedures

4.1 Where can the validity of an issued patent be challenged?

The China National Intellectual Property Administration (CNIPA) – and particularly the Patent Re-examination and Invalidation Department (PRID) – is the only authority that hears patent validity matters (ie, patent invalidation proceedings) in China. It is not possible to challenge the validity of a patent in civil litigation.

4.2 How can the validity of an issued patent be challenged?

Once a patent has been issued in China, any entity or individual can file a request for patent invalidation with the PRID. The PRID will:

  • initiate a patent invalidation proceeding;
  • establish a collegiate panel of typically three (five for important cases) examiners to hear the patent invalidation proceeding; and
  • issue an invalidation decision on whether the patent at issue is maintained or invalidated partially or in full.

4.3 What are the grounds to invalidate an issued patent?

The grounds include where an issued patent does not comply with the provisions prescribed in the following provisions of the Patent Law or the following rules of the Implementing Regulations of the Patent Law.

  • Article 2:
    • For the purposes of this Law, 'invention-creations' mean inventions, utility models and designs. 'Invention' means any new technical solution proposed for a product, a process, or the improvement thereof. 'Utility model' means any new technical solution proposed for the shape, the structure, or their combination, of a product, which is fit for practical use. 'Design' means, with respect to an overall or partial product, any new design of the shape, the pattern, or their combination, or the combination of the colour with shape or pattern, which is rich in an aesthetic appeal and is fit for industrial application.
  • Article 19(1) of the Patent Law:
    • Where any entity or individual intends to file a patent application abroad in a foreign country for any an invention or utility model accomplished in China, it or he shall submit the matter to request the patent administration department under the State Council for confidentiality examination in advance. The procedures and duration etc. of the confidentiality examination shall be carried out in accordance with the regulations of the State Council.
  • Article 22 of the Patent Law:
    • Any invention or utility model for which a patent right is to be granted shall meet the requirements of novelty, inventiveness and practical use. Novelty means that, the invention or utility model does not form part of the prior art; no entity or individual has filed a patent application for the identical invention or utility model with the patent administration department under the State Council before the filing date and the content of the application is disclosed in patent application documents published or patent documents announced after the filing date. Inventiveness means that, as compared with the prior art, the invention has prominent substantive features and represents an obvious progress, and that the utility model has substantive features and represents a progress. Practical use means that, the invention or utility model can be manufactured or used and can produce positive results. For the purpose of this Law, 'the prior art' refers to any technology known to the public domestically and/or abroad before the filing date of patent application.
  • Article 23 of the Patent Law:
    • Any design for which a patent right is to be granted shall not be a prior design; no entity or individual has filed a patent application for the identical design with the patent administration department under the State Council before the filing date and the content of the application is disclosed in patent documents announced after the filing date. Any design for which a patent right may be granted shall significantly differ from a prior design or the combination of prior design features. Any design for which a patent right is granted must not conflict with the lawful rights acquired by any other person before the filing date. For the purpose of this Law, 'a prior design' refers to any design known to the public domestically and/or abroad before the filing date.
  • Article 26(3) of the Patent Law:
    • The description shall contain a clear and comprehensive description of the invention or utility model so as to enable a person skilled in the relevant field of technology to carry it out; where necessary, drawings shall be attached to it. The abstract shall state briefly the main technical points of the invention or utility model.
  • Article 26(4) of the Patent Law: "The claims shall be based on the description and shall define the scope of the patent protection sought for in a clear and concise manner."
  • Article 27(2) of the Patent Law: "The relevant drawings or photographs submitted by the applicant shall clearly indicate the design of the product for which patent protection is sought."
  • Article 33 of the Patent Law:
    • An applicant may amend his or its patent application documents, however, the amendment to the patent application documents for an invention or utility model may not go beyond the scope of disclosure contained in the original description and claims, and the amendment to the patent application documents for a design may not go beyond the scope of the disclosure as shown in the original drawings or photographs.
  • Rule 11 of the Implementing Regulations of the Patent Law: "Patent applications shall be made in accordance with the principle of good faith. The filing of all types of patent applications shall be based on real invention and creation activities and shall not be falsified."
  • Rule 23(2) of the Implementing Regulations of the Patent Law: "The independent claim shall outline the technical solution of an invention or utility model and state the essential technical features necessary for solving its technical problem."
  • Rule 49(1) of the Implementing Regulations of the Chinese Patent Law:
    • A divisional application filed in accordance with the provisions of Rule 42 of the Implementing Regulations shall be entitled to the filing date and, if priority is claimed, the priority date of the initial application, but the divisional application should not go beyond the scope of the disclosure contained in the initial application.

The grounds also include that an issued patent belongs to the circumstances prescribed in the following provisions of the Patent Law.

  • Article 5 of the Patent Law:
    • No patent right shall be granted for any invention-creation that violates laws or social morality or that is detrimental to the public interests. No patent right shall be granted for any invention-creation where the acquisition or utilisation of the genetic resources, on which the development of the invention-creation relies, violates the provisions of laws or administrative regulations.
  • Article 25 of the Patent Law:
    • No patent right shall be granted for any of the following: (1) scientific discoveries; (2) rules and methods for intellectual activities; (3) methods for the diagnosis or treatment of diseases; (4) animal and plant varieties; (5) nuclear transformation methods and substances obtained by means of nuclear transformation; (6) designs of two-dimensional printing goods, made of the pattern, the colour or the combination of the two, which serve mainly as indicators. The patent right may, in accordance with the provisions of this Law, be granted for the production methods of the products specified in Subparagraph (4) of the preceding paragraph.

The grounds further include that a patent cannot be issued according to Article 9 of the Patent Law, which provides as follows:

For any identical invention-creation, only one patent right shall be granted. However, where the same applicant files applications for both a utility model patent and an invention patent with regard to the identical invention-creation on the same day, if the utility model patent granted earlier has not been terminated and the applicant declares to abandon the utility model patent, the invention patent may be granted. If two or more applicants file patent applications for the identical invention-creation respectively, the patent right shall be granted to the applicant whose application was filed first.

4.4 What is the evidentiary standard to invalidate an issued patent?

The petitioner for invalidation must provide evidence to substantiate its grounds for invalidation. Given that lack of novelty and inventiveness are typically the most significant grounds for invalidation, prior art evidence is commonly utilised as the primary form of evidence.

4.5 What post-grant review or opposition procedures are available for third parties to challenge the validity of a patent?

The patent invalidation proceeding is the only procedure to challenge the invalidity of a patent in China. The PRID is the only authority hearing patent invalidation proceedings.

4.6 Who can oppose a granted patent?

Any entity or individual can file a request for patent invalidation with the PRID to challenge the validity of a granted patent.

4.7 What are the timing requirements for filing an opposition or post-grant review petition?

The invalidation petitioner can file a request for patent invalidation at any time after the patent is granted – even after the patent term has expired. This is also meaningful since a patent holder may, after the patent term has expired, file a patent civil lawsuit to claim damages for a period of time before the expiration.

4.8 What are the grounds to file an opposition?

Please see question 4.3.

4.9 What are the possible outcomes when an opposition is filed?

If the invalidation petitioner does not withdraw its invalidation request during the invalidation proceeding, the PRID will issue an invalidation decision on whether the patent at issue is to be maintained or invalidated partially or in full.

4.10 What legal standards will the tribunal apply to resolve the opposition or challenge, and which party bears the burden of proof?

Please refer to the articles and rules discussed in question 4.3. The invalidation petitioner must submit evidence to support its grounds for invalidation; and the patent holder may also present evidence to support its arguments on the validity of the patent.

4.11 Can a post-grant review decision be appealed and what are the grounds to appeal?

If any party concerned – either the invalidation petitioner or the patent holder – refuses to accept the invalidation decision, it may file an administrative lawsuit with the Beijing IP Court within three months of the date of receipt of the invalidation decision.

The grounds include the following:

  • The principal evidence was insufficient;
  • The law or regulations were applied incorrectly;
  • The legally prescribed procedures were violated;
  • CNIPA's powers of the office were exceeded;
  • CNIPA's authority was abused; or
  • There was clear impropriety.

5 Patent enforceability

5.1 What makes a patent unenforceable?

There is no provision in the Patent Law and its Implementing Regulations on the unenforceability of a patent. All patents are enforceable unless a patent has been invalidated in a patent invalidation proceeding.

5.2 What are the inequitable conduct standards?

There is no provision in the Patent Law and its Implementing Regulations on inequitable conduct.

5.3 What duty of candour is required of the patent office?

There is no specific requirement in the Patent Law and its Implementing Regulations on the duty of candour.

6 Patent infringement

6.1 What Constitutes Patent Infringement?

'Infringement' is defined in Article 11 of the Patent Law as follows:

After the grant of the patent right for an invention or utility model, except where otherwise provided for in the Patent Law, no entity or individual may, without the authorisation of the patent owner, exploit the patent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, and use, offer to sell, sell or import the product directly obtained by the patented process, for production or business purposes.

After the grant of the patent for a design, no entity or individual may, without the authorisation of the patent owner, exploit the design patent, that is, make, offer to sell, sell, or import the product incorporating its or his patented design, for production or business purposes.

6.2 Does your jurisdiction apply the doctrine of equivalents?

Yes. According to the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Patent Infringement Dispute Cases (II), 'equivalent features' refer to technical features that:

  • are achieved by substantially the same means, realise substantially the same function and achieve substantially the same effect as those recorded in claims; and
  • can be conceived by ordinary skilled persons in the art without any need for creative labour when the alleged infringing act occurs.

'Equivalents' refers to the equivalence of technical features rather than the equivalence of the overall technical solution.

The doctrine of equivalents essentially extends the literal scope of claims protection but is subject to limitations imposed by, for example, the principles of estoppel and dedication to the public.

6.3 Can a party be liable if the patent infringement takes place outside the jurisdiction?

Typically, due to the territoriality of patent rights, actions occurring outside of China fall beyond the jurisdiction of the Chinese courts. Nonetheless, a party not directly engaged in infringing conduct within China may still be deemed liable as a joint tortfeasor if it collaborates with another party committing infringement within China.

6.4 What are the standards for wilful infringement?

The Interpretation of the Supreme People's Court on the Application of Punitive Damages in Civil Cases of Intellectual Property Infringement sets out guidelines on the application and calculation of punitive damages for IP infringements in China. Article 1(1) of the interpretation specifies three required elements for punitive damages:

  • the plaintiff's request;
  • intentionality; and
  • serious circumstances.

Regarding the element of intentionality, Article 2 provides as follows:

The courts will be required to consider all factors when determining whether there has been 'wilful' infringement, including the type of IP right and its status, the popularity of the product, and the relationship between the defendant and the plaintiff/interested party. In particular, the court may preliminarily determine 'wilful' infringement if:

  • the defendant continues the infringement after being informed or warned by the plaintiff/interested party;
  • the defendant or its legal representative/manager is the legal representative/manager or actual controller of the plaintiff/interested party;
  • there exists a relationship such as labour, service, cooperation, license, distribution, agency, representation, etc., between the defendant and the plaintiff or interested parties, and the defendant has come into contact with the infringed IP right;
  • there have been business dealings between the defendant and the plaintiff or interested parties, or negotiations have taken place to conclude contracts, and the defendant has come into contact with the IP right;
  • there is piracy or trademark counterfeiting; or
  • other circumstances that can be recognized as intentional.

Regarding the element of serious circumstances, Article 4 of the interpretation specifies the factors to be considered in determining the seriousness, which include the infringement actions and the behaviour of the infringer in the litigation:

In determining the seriousness of intellectual property infringement, the people's court shall comprehensively consider factors such as the means and frequency of infringement, the duration, geographical scope, scale, consequences of the infringement actions, and the behaviour of the infringer in the litigation.

Article 4 further lists seven examples that can be deemed as serious circumstances.

6.5 Which parties can bring an infringement action?

According to Article 60 of the Patent Law, the patent holder or any interested party has the right to:

  • initiate legal proceedings in a people's court; or
  • request an administrative authority for patent affairs to address the matter.

In practice, the patent holder or the exclusive licensee can individually or jointly bring a patent infringement lawsuit against an infringer. A non-exclusive licensee may also file a patent infringement lawsuit with special authorisation from the patent owner; alternatively, the non-exclusive licensee may join the patent infringement lawsuit initiated by the patent holder as a co-plaintiff.

6.6 How soon after learning of infringing activity must an infringement action be brought?

According to Article 74 of the Patent Law, the prescriptive period for instituting an action against a patent infringement is three years, commencing from the date on which the patent holder or interested party knows or should have known the infringement and the infringer. If the accused infringer continues the infringing activities, as long as the infringement is ongoing, the patent holder is entitled to file an infringement action with a people's court seeking an injunction to stop the infringing activities.

6.7 What are the pleading standards to initiate a suit?

According to the Civil Procedure Law, an action to be instituted must satisfy the following conditions:

  • The plaintiff must be a citizen, legal person or any other organisation with a direct interest in the case;
  • There must be a clearly identifiable defendant;
  • Specific claims, facts and reasons must be provided; and
  • The case must fall within the scope of civil actions accepted by a people's court and within the jurisdiction of the people's court where the action is filed.

This applies to patent cases. A pleading must include at least:

  • the name of the court with which the claim is filed;
  • basic information of the plaintiff, including its place of residence, name of the legal representative and its position;
  • basic information of the defendant, including its place of residence, to the extent ascertainable;
  • the main facts constituting the cause of action and the time of its actuality;
  • where a patent has two or more claims, the claims based on which the patent has allegedly been infringed;
  • he relief sought the value of the subject matter of the suit.

6.8 In which venues may a patent infringement action be brought?

According to Article 5 of the Several Provisions of the Supreme People's Court on Issues concerning the Application of Law in the Trial of Cases on Patent Disputes, an action involving patent infringement falls under the jurisdiction of a people's court at the place where the infringement was committed or the place of the defendant's domicile. The place where the infringement was committed includes:

  • the place where allegedly infringing products were manufactured, used, offered for sale, sold or imported;
  • the place where a patented method was used;
  • the place where products made using a patented method were used, offered for sale, sold or imported;
  • the place where products infringing a design patent were manufactured, offered for sale, sold or imported;
  • the place where counterfeiting was committed; or
  • the place where the consequences of the foregoing infringing activities occurred.

6.9 What are the jurisdictional requirements for each venue?

According to Article 2 of the Several Provisions of the Supreme People's Court on Issues concerning the Application of Law in the Trial of Cases on Patent Disputes, a first-instance patent dispute falls under the jurisdiction of:

  • an intermediate people's court at the place where the people's government of the province, the autonomous region, or the municipality directly under the central government is located; or
  • an intermediate people's court designated by the Supreme People's Court.

Four IP courts have been established in Beijing, Shanghai, Guangzhou and Hainan Free Trade Port. A patent infringement lawsuit within these four jurisdictions must be filed the corresponding IP court.

According to the latest judicial interpretations by the Supreme People's Court, appellate cases involving patent litigation for inventions and significant and complex utility model patent litigation shall be directly appealed to the Supreme People's Court.

6.10 Who is the fact finder in an infringement action?

There is no jury system in China. In an infringement action, the judge serves as the fact finder, as well as the decision maker. The judge has the authority to appoint a technical investigator to assist in understanding technical aspects of the case.

6.11 Does the fact finder change based on venue?

In China, the fact finder typically does not change based on venue. In patent infringement cases and many other legal proceedings, the judge or panel of judges assigned to the case assumes the role of fact finder regardless of the specific venue or location of the court. The procedures and responsibilities of the judge remain consistent across different jurisdictions within China.

6.12 What are the steps leading up to a trial?

According to the Civil Procedure Law, the main steps leading up to a trial are as follows:

  • The plaintiff initiates the process by filing a complaint with a people's court.
  • The people's court serves the complaint on the defendant within five days of its receipt.
  • The defendant is given a period of 15 days (or 30 days for foreign defendants) to file its defence, if any.
  • The people's court serves the defence on the plaintiff within five days of its receipt.
  • Both parties exchange evidence relevant to the case.
  • Pre-trial hearings are conducted to discuss procedural matters and prepare for the trial.

6.13 What remedies are available for patent infringement?

In China, several remedies are available for patent infringement:

  • Injunctions: The plaintiff can request an injunction to prevent the infringer from continuing the infringing activities. This can include stopping the production, sale or use of the infringing products.
  • Damages: The plaintiff may seek monetary compensation for the damages caused by the infringement. The damages can include:
    • actual losses suffered by the patent holder;
    • any profits gained by the infringer as a result of the infringement; or
    • a multiple of reasonable royalties.
  • Seizure and destruction of infringing product: The court may order the seizure and destruction of infringing products, machinery, equipment and materials used in the production of infringing products.

These remedies aim to:

  • compensate the patent holder for the infringement;
  • deter future infringements; and
  • uphold the rights granted by the patent.

The specific remedies available and their implementation may vary depending on:

  • the circumstances of each case; and
  • the discretion of the court.

6.14 Is an appeal available and what are the grounds to appeal?

Yes, an appeal is available in patent infringement cases in China. After a people's court renders a judgment, either party may choose to appeal the decision to a higher court. According to the latest judicial interpretations by the Supreme Court, appellate cases of patent litigation for inventions and significant and complex utility model patent litigation shall be directly appealed to the Supreme People's Court.

There are no formal limitations on the grounds for appeal and any judicial determination of the trial court may be appealed. The grounds for appeal vary according to each case and the decision being appealed. These grounds may include:

  • errors in fact (eg, misinterpreting evidence or overlooking crucial facts);
  • errors in law (misinterpreting or misapplying relevant laws);
  • procedural irregularities;
  • claims of substantial injustice;
  • introduction of new evidence (not available during the initial trial); or
  • disagreement with the judgment rendered by the lower court.

7 Discovery

7.1 Is discovery available during litigation?

In China, the concept of 'discovery' as it is understood in common law jurisdictions such as the United States is not formally recognized. Typically, each party must bear the burden of proof on its own in substantiation of its claims.

However, during the court procedures, it is possible to obtain evidence, including infringing products, through the following measures:

  • applying for the court to investigate and collect evidence;
  • applying for on-site investigation;
  • applying for evidence preservation; and
  • requesting the court to issue an order to submit documentary evidence.

Parties involved in litigation can request a people's court to order the production of specific evidence relevant to the case. The Civil Procedure Law allows parties to apply to the court for the collection of evidence held by the opposing party or third parties by transferring the burden of proof to the opposing party.

Parties can also present evidence during trial proceedings and the people's court may summon witnesses and experts to testify. However, the process is more controlled by the court compared to the broad discovery procedures in common law systems.

Overall, while China does not have a formal discovery process akin to that in common law jurisdictions, parties have mechanisms available to obtain evidence necessary for their case through the court's assistance.

7.2 What kinds of discovery are available?

Please see question 7.1.

7.3 Are there any limitations to the amount of discovery allowed?

Please see question 7.1.

8 Claim construction

8.1 When during a patent infringement action are claim terms defined by the tribunal?

In a patent infringement action in China, the definition of claim terms typically occurs during the enforcement proceedings. Claim construction issues are addressed by a collegiate panel of officers from an administrative authority for patent affairs or by judges from a people's court, usually in the judgment following the trial of infringement issues. Unlike in some jurisdictions, such as the United States, there is no specific Markman hearing procedure for claim construction in China.

8.2 What is the legal standard used to define claim terms?

According to Articles 2 and 3 of Interpretations of the Supreme People's Court on Certain Issues Concerning the Application of Law in the Trial of Patent Infringement Cases:

the People's Court shall determine the content of the claim specified in Paragraph 1 of Article 64 of the Patent Law according to what is stated in the claim, and by taking into account how the person with ordinary skill in the art would comprehend the claim through a reading of the specification and drawings. The People's Court may use the specification, drawings, relevant claims in the written claims, and patent examination files to define the claim terms. If the specification has specifically defined the claim terms, such express definitions shall prevail. If the meaning of a claim still cannot be determined, the court may define the claim terms by taking into account reference books, textbooks, other well-known documents and the general understanding of persons with ordinary skill in the art.

8.3 What evidence does the tribunal consider in defining claim terms?

Both intrinsic and extrinsic evidence may be considered in defining claim terms in China. Intrinsic evidence encompasses the claim language, specification, drawings and patent examination files. If the intrinsic evidence provides a clear interpretation of the claim language and the meaning of its technical features, reliance on extrinsic evidence may not be necessary. Extrinsic evidence includes all evidence external to the patent and patent examination files, such as:

  • expert testimony;
  • opinions;
  • dictionaries;
  • textbooks; and
  • articles.

In cases where extrinsic evidence and intrinsic evidence conflict or are inconsistent regarding the interpretation of the claims, priority is typically given to the intrinsic evidence.

9 Remedies

9.1 Are injunctions available?

Yes, both preliminary and permanent injunctions are available in China in patent infringement cases.

9.2 What is the standard to obtain an injunction?

To obtain a preliminary injunction, according to Article 72 of the Patent Law, the patent holder typically needs to demonstrate to a people's court that:

  • there is a likelihood of irreparable harm if the infringement continues; and
  • monetary compensation alone would not adequately remedy the harm caused by the infringement.

In deciding whether to grant an injunction, the court will consider factors such as:

  • the strength of the patent holder's case;
  • the validity of the patent involved;
  • the balance of hardships between the parties; and
  • the public interest.

As regards permanent injunctions, according to Article 65 of the Patent Law, where a people's court determines that a patent has been infringed, it may order the infringer to cease the infringement. However, the issuance of a permanent injunction in a patent infringement case is not automatic. The decision to grant a permanent injunction is at the discretion of the court and depends on various factors (e.g., the balance of hardships between the parties, the public interest) considered during the proceedings.

9.3 Are damages available?

Yes, damages are available as a remedy in patent infringement cases in China. If a patent holder proves that its patent rights have been infringed, it may seek monetary compensation for the damages suffered as a result of the infringement.

9.4 What types of damages are available?

According to Article 71 of the Patent Law, the compensation for patent infringement is calculated based on the actual losses suffered by the patent holder due to the infringement or the profits gained by the infringer through the infringement. If it is difficult to determine these losses or profits, the compensation amount may be reasonably determined by considering the multiples of the patent royalties. In cases of wilful infringement with serious circumstances, the compensation may range from twice to under five times the amount calculated using the method. The compensation amount should also include the reasonable expenses incurred by the patent holder to stop the infringement.

Where it is difficult to determine the actual losses suffered by the patent holder or where the actual losses are not adequately compensated, a people's court may award statutory damages. The number of statutory damages is determined by the court based on factors such as:

  • the nature of the infringement;
  • the severity of the infringement; and
  • the circumstances of the case.

The maximum statutory damages award in China is RMB 5 million.

9.5 What is the standard to obtain certain types of injunctions?

Please see question 9.2.

9.6 Is it possible to increase or multiply damages due to a party's actions?

Yes. According to Article 71 of the Patent Law, if the infringement is found to be wilful and the circumstances are serious, the amount of compensation awarded to the patent holder may range from twice to up to five times the amount calculated based on the patent holder's actual losses or the infringer's profits. This provision allows a People's Court to:

  • increase the damages awarded to the patent holder as a deterrent against wilful infringement; and
  • provide appropriate compensation for the harm caused.

The decision to increase or multiply damages depends on various factors, including:

  • the nature and severity of the infringement;
  • the infringer's intent;
  • the impact of the infringement on the patent holder; and
  • other relevant circumstances of the case.

The court has discretion in determining the appropriate level of damages based on the specific facts and evidence presented during the proceedings.

9.7 Are sanctions available?

Yes. If a party to infringement proceedings fails to comply with a court order during the proceedings, sanctions may be imposed by the court. There are also very serious sanctions for failure to comply with an injunction.

9.8 What kinds of sanctions are available?

A people's court has broad discretion to impose sanctions on a party if it violates the court order during the proceedings. If an injunction is granted against a party following a trial and that party fails to comply with the terms of the injunction, it may be found guilty of contempt of court. This can result in significant fines and even imprisonment for the defendant.

9.9 Can a party obtain attorneys' fees?

In patent infringement cases in China, the prevailing party generally cannot obtain attorneys' fees from the losing party as part of the legal costs – unlike in some jurisdictions such as the United States, where prevailing parties may be awarded attorneys' fees under certain circumstances. However, in China, the prevailing patent holder may recover attorneys' fees as part of compensation, which is defined by Article 71 of the Patent Law as reasonable expenses incurred by the patent holder to stop the infringement.

9.10 What is the standard to obtain attorneys' fees?

In China, there is no standard practice for obtaining attorneys' fees in patent infringement cases. To obtain attorneys' fees as part of compensation, the prevailing patent holder will need to demonstrate to the court that the expenses incurred, including attorneys' fees, were necessary and directly related to stopping the infringement. The court will assess the reasonableness of the expenses based on the evidence and arguments presented by the parties during the proceedings.

10 Licensing

10.1 What patent rights can a party obtain through a licence?

The rights obtained by a licensee will depend on the type of licence that is granted:

  • Exclusive licence: Only the licensee has the exclusive right to the patent – that is, only the licensee can make, sell and use the patented product or use the patented method. An exclusive licensee has the same right as the patent holder to bring patent infringement proceedings.
  • Sole licence: The licensor agrees not to grant any additional licences but retains the right to exploit the patent – that is, both the patent holder and the licensee can make, sell and use the patented product or use the patented method. The licensee can sue before the court in case of infringement if the patent holder does not exercise this right.
  • Non-exclusive licence: The licensor can grant additional licences and retains the right to exploit the patent. There is no limit on the number of additional licences that may be granted. Licensees have no right to sue, unless specifically authorised by the licensor.

Overall, a patent licence provides the licensee with specific rights to use, manufacture and commercialise the patented technology, while the licensor retains ownership of the patent itself. The terms and conditions of the licence agreement are negotiated between the parties and may vary depending on the specific circumstances and objectives of the parties involved.

10.2 What limits can a patent owner impose on a licence?

A patent holder can impose various limits or restrictions on a licence agreement to control how the licensed patent is used, manufactured and commercialised. Some of the limits that a patent holder can impose on a licence include the following:

  • Scope of use: The licence agreement may specify the scope of use of the patented technology, such as limiting its use to specific products, processes or fields of use.
  • Territorial restrictions: The licence may restrict the geographical territory in which the licensee is authorized to use, manufacture or sell products based on the patented technology.
  • Duration of licence: The licence agreement will specify the duration or term for which the licensee is granted the rights to use the patented technology. Once the licence term expires, the licensee may no longer use the patented technology without renewing the licence.
  • Exclusive, sole or non-exclusive rights: The licence may grant the licensee exclusive rights to use the patented technology within a specific territory or industry; or the licence may be non-exclusive, allowing the licensor to grant licences to multiple parties.
  • Royalties and payment terms: The licence agreement will specify the amount of royalties or licence fees that the licensee must pay to the licensor, as well as the terms and schedule for payment.
  • Sub-licensing rights: The licence may prohibit or restrict the licensee from granting sub-licences to third parties; or it may include provisions allowing the licensee to grant sub-licences under certain conditions.
  • Quality control and performance standards: The licence agreement may include provisions requiring the licensee to maintain certain quality standards or performance criteria when using the patented technology.

These limits and restrictions help the patent holder to:

  • maintain control over the use and commercialisation of the patented technology; and
  • ensure that the licensee complies with the terms of the licence agreement.

The specific limits imposed in a licence agreement will depend on the objectives and priorities of the patent holder and the negotiated terms between the parties involved.

11 Antitrust

11.1 Are there any limits on patent protection due to antitrust laws?

Yes, antitrust laws can impose limits on patent protection, particularly when patent rights are used in a way that may harm competition or restrain trade. Antitrust laws are designed to promote competition and prevent anti-competitive behaviour that could harm consumers or other market participants. Some of the ways in which antitrust laws can limit patent protection include the following:

  • Patent misuse: Antitrust laws prohibit patent owners from engaging in patent misuse, which involves using patent rights in a way that exceeds the scope of the patent or violates antitrust principles. This may include tying arrangements, price fixing or other practices that harm competition.
  • Anti-competitive conduct: Antitrust laws prohibit patent holders from engaging in anti-competitive conduct, such as monopolisation or attempts to monopolise a market through the improper use of patent rights. This includes actions that unfairly exclude competitors from the market or restrict consumer choice.
  • Patent settlements: Antitrust laws may also apply to settlements between patent holders and potential infringers, particularly if the settlements involve agreements that delay or restrict competition beyond the scope of the patent.

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.