Comments Sought for Draft Revision to Patent Law

China’s State Intellectual Property Office (SIPO) released the “Draft Revision of the Patent Law of the People’s Republic of China (Draft for Comments) (hereinafter referred to as ‘Draft’)” on August 9, and is now seeking public comments.

The Draft consists of revisions to seven provisions in the current Patent Law, which was most recently amended in 2008. The key revisions are as follows:

Authority to investigate and collect evidence

In order to resolve the difficulties in collecting evidence in patent infringement cases, the Draft grants the People’s Court the authority to investigate and collect evidence.

According to the Draft, upon request filed by the plaintiff or his agent ad litem, the People’s Court should investigate and collect relevant evidence, including the product involved as well as accounting books and related materials in the possession of the party accused of infringement. If the accused party refuses to provide evidence, or transfers, conceals or destroys the evidence, the People’s Court can take compulsory measures to prevent such conduct. If the offence constitutes a crime, the offender will be investigated for criminal liability in accordance with law.

Moreover, to facilitate evidence collection, the Draft imposes liability on any party being investigated who obstructs such procedure. Specifically, the Draft provides that, when a Department of Patent Administration (DPA) exercises its authority in accordance with law, the party concerned should provide assistance and cooperation. Where the party under investigation refuses to do so or disrupts the process, the DPA will issue a warning; where the circumstance is severe, penalties will be imposed based on relevant laws.

Discretion to determine the amount of damages

In order to safeguard the legitimate rights of patent holders, the Draft grants the DPA the discretion to determine the amount of damages in patent infringement cases.

Under the current Patent Law, only the People’s Court has the right to determine the amount of damages for patent infringement. As such, while the DPA has the right to handle and mediate patent infringement disputes, it does not have the authority to enforce the damage amount, and the infringed party will have to file a separate action regarding the damages. Allowing the DPA to determine the damage amount thus helps save public resources and alleviate litigation exhaustion.

Introduction of punitive damages

The Draft acknowledges that compensating losses actually incurred by the infringed is not sufficient to deter infringers. As such, the Draft introduces punitive compensation for intentional infringement, where the highest amount of compensation could triple the figure determined according to the relevant provisions under the current Patent Law.

Dispute handling in a timely manner

The current Patent Law does not specify when the decision by the Patent Reexamination Board declaring a patent right invalid or upholding the patent right comes into effect. As a result, many patent disputes are prolonged. This occurs where, after a decision upholding a patent right is made, the infringer subsequently files an administrative action. During the administrative litigation period, which can last from six months to two years, the People’s Court or the DPA will frequently suspend the case, and many patent infringement cases remain unresolved as a result. To improve the efficiency of dispute handling, the Draft stipulates that, after the decision declaring the patent right invalid or upholding the patent right is made, the patent administrative department under the State Council should register and announce the decision in a timely manner, and the decision should come into effect on the date of the announcement. 

Power to inspect and stop bad faith infringement

To effectively inspect and stop bad faith patent infringement, the Draft grants DPA the authority to investigate and punish acts alleged of disrupting market order.

Any comments to the Draft should be submitted via any of the following means before September 10, 2012.

1. E-mail: tiaofasi@sipo.gov.cn
2. Fax: 010-62086550
3. Postal address: Third Division, Treaty and Law Department, State Intellectual Property Office, No.6, Xi Tucheng Rd, Haidian District, Beijing. Postcode 100088.

---