The China's Supreme People's Court (SPC) issued an Administrative Judgement for the case No (2021) Zui Gao Fa Zhi Xing Zhong 322, providing a specific guide on the early termination of patent rights caused by unintentional failure to pay annuity fees.
In this case, the patentee's patent right was terminated because the patentee did not pay in full the annuity for the ninth year and late payment fees. The patentee claimed that it did not receive the payment notice issued by the China National Intellectual Property Administration (CNIPA), so its failure to pay the annuity in full was unintentional and thus the CNIPA should issue a further payment notice, instead of directly issuing the Notification of Termination of Patent Right. After checking, the SPC found that the patentee had entrusted a patent agency to handle all the matters related to the patent, and then it terminated its client-agency relationship with the patent agency but did not file a request for recording the change of bibliographic data pursuant to Article 119(2) of Implementing Regulations of the Patent Law. Therefore, the CNIPA's issuing the payment notice to the patent agency was in accordance with the laws and regulations, and the patentee's failure to receive the payment notice was due to its own fault. Besides, paying the annuity in full is a legal obligation of the patentee, and the patentee should be aware that this obligation is irrelevant to whether the failure to pay the annuity is unintentional. Therefore, the SPC upheld the first-instance judgment that the patent right should be terminated.
The Judgment gives the following tips to IP practitioners.
(1) If the patentees prefer to handle annuity fees by themselves instead of still by patent agencies, it is recommended that they go through the procedures for recording the bibliographic change with the CNIPA, to make sure that all future notifications will be issued to them;
(2) Not only non-payment but also short payment of the annuity fee and late payment fee will cause early termination of patent rights.
http://ipc.court.gov.cn/zh-cn/news/view-1528.html
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