Thursday, September 17, 2009

Decision of the Standing Committee of the NPC on Amending Patent Law 2008

Order of the President of the People’s Republic of China
(No.8)

The Decision of the Standing Committee of the National People’s Congress on Amending the Patent Law of the People’s Republic of China, which was adopted at the 6th Session of Standing Committee of the 11th National People’s Congress of the People’s Republic of China on December 27, 2008, is hereby promulgated and shall come into force as of October 1, 2009.

President of the People’s Republic of China Hu Jintao
December 27, 2008

Decision of the Standing Committee of the National People’s Congress on Amending the Patent Law of the People’s Republic of China
(Adopted at the 6th Session of Standing Committee of the 11th National People’s Congress of the People’s Republic of China on December 27, 2008)

It is decided at the 6th Session of Standing Committee of the 11th National People’s Congress of the People’s Republic of China that the following amendments are made to the Patent Law of the People’s Republic of China:

1. Article 1 is amended as: “This law is enacted with a view to protecting the legitimate rights and interests of patentees, encouraging inventions, giving an impetus to the application of inventions, improving the innovative capabilities, and promoting scientific and technological progress as well as the economic and social development.”

2. Three paragraphs (paragraphs 2 through 4) are added in Article 2: “The term “invention” refers to any new technical solution relating to a product, a process or an improvement thereof.
“The term “utility model” refers to any new technical solution relating to a product’s shape, structure, or a combination thereof, which is fit for practical use.
“The term “design” refers to any new design of a product’s shape, pattern or a combination thereof, as well as the combination of the color and the shape or pattern of a product, which creates an aesthetic feeling and is fit for industrial application.”

3. Article 5 is amended as: “No patent shall be granted for an invention that contravenes any law or social morality or that is detrimental to public interests.
“No patent will be granted for an invention based on genetic resources if the access or utilization of the said genetic resources is in violation of any law or administrative regulation.”

4. One paragraph is inserted in Article 9 as paragraph 1: “One patent shall be granted to one invention. However, if the same applicant applied for both the patent for utility model and the patent for invention on a same day, if the patent for the utility model has not terminated yet and if the applicant declares to waive the patent for utility model, the patent for invention can be granted.”

5. Paragraph 2 of Article 10 is amended as: “Where a Chinese entity or individual is to assign the right to apply for a patent or a patent right to a foreigner or foreign enterprise or any foreign organization, it or he shall go through the formalities under relevant laws and administrative regulations.”
6. Paragraph 2 of Article 11 is amended as: “After the granting of a patent for a design, no entity or individual shall, without permission of the patentee, exploit the patent, that is to say, they shall not make, promise to sell, sell, or import the product incorporating its or his patented design, for production and business purposes.”
7. Article 12 is amended as: “Where an entity or individual exploits the patent of others, it or he shall conclude a licensing contract with the patentee and pay a patent royalty to the patentee. The licensee has no right to license any entity or individual other than the entity or individual as stipulated in the licensing contract to exploit the said patent”.

8. Paragraph 2 of Article 14 is deleted.

9. One article shall be added as Article 15: “If there is any agreement between the joint owners of the right to apply for a patent or a patent right regarding the exercise of the relevant right, the agreement shall be followed. If there is no such agreement, any of the joint owners may exploit the patent independently or license others to exploit the patent by means of ordinary license. In the case of licensing others to exploit the patent, royalties charged shall be distributed among the joint owners.

“Except for the circumstance as described in the preceding paragraph, the exercise of the right to apply for a patent or a patent right shall be based on the consensus of all joint owners.”

10. Articles 15 and 17 are combined as Article 17: “An inventor or designer has the right to expressly indicate in the patent documents that he is the inventor or designer.
“A patentee has the right to put a clear patent sign on its patented product or on the package of the said product.”

11. Paragraph 1 of Article 19 is amended as: “Where a foreigner, foreign enterprise or any other foreign organization that has no habitual abode or business office in China intends to apply for a patent or handle other patent-related matters in China, he or it shall authorize a legitimately formed patent agency to act as his or its agent.”
Paragraph 2 is amended as: “To apply for a patent or handle other patent-related matters in China, a Chinese entity or individual may authorize a legitimately formed patent agency to act as its or his agent.”

12. Paragraph 1 of Article 20 is amended as: “Where an entity or individual intends to file an application in a foreign country for a patent for an invention or utility model accomplished in China, it or he shall report in advance to the patent administrative department of the State Council for confidentiality review. The provisions of the State Council shall be followed in regard to the procedures and time limit for the confidentiality review.”

One paragraph is added as paragraph 4: As to an invention or utility model for which a patent application is filed in a foreign country by violating the provision of paragraph 1 of this Article, no patent will be granted for it if a patent application is filed in China.

13. One paragraph is added in Article 21 as paragraph 2: “The patent administrative department of the State Council shall completely, accurately and timely announce the patent information and regularly publish patent gazettes.”

14. Paragraph 2 of Article 22 is amended as: “Novelty means that the invention or utility model is not an existing technology, and prior to the date of application, no entity or individual has filed an application heretofore with the patent administrative department of the State Council for the identical invention or utility model and recorded it in the patent application documents or patent documents released after the said date of application.”
Paragraph 3 is amended as: “Inventiveness means, as compared with the existing technologies, the invention has prominent substantive features and notable progress and that the utility model has substantive features and progress.”
One paragraph is added as paragraph 5: “The term “existing technology” as mentioned in this Law refers to the technologies known to the general public both at home and abroad prior to the date of application.”

15. Article 23 is amended as: “Any design for which a patent right is granted shall not be attributed to the existing design, and no entity or individual, before the date of application, filed an application with the patent administrative department of the State Council on the identical design and recorded it in the patent documents published after the date of application.
“As compared with the existing design or combination of the existing design features, the design for which a patent is granted shall have distinctive features.
The patented design may not conflict with the lawful rights that have been obtained by any other person prior to the date of application.
The term “existing design” as used in this Law refers to a design known to the general public both at home and abroad prior to the date of application.”

16. One item is inserted in paragraph 1 of Article 25 as subparagraph (6): “the design, which is used primarily for the identification of pattern, color or the combination of the two on printed flat works.”

17. Paragraph 2 of Article 26 is amended as: “An application shall expressly specify the name of the invention or utility model, name of the inventor, name and address of the applicant, and other matters.”
Paragraph 4 is amended as: “The claims shall clearly and concisely state the requested patent protection scope in accordance with the specifications.”

One paragraph is added as paragraph 5: “For an invention based on genetic resources, the applicant shall state the direct source and the original source of the genetic resources in the application documents. If the applicant is not able to state the original source, it or he shall state the reasons.”

18. Article 27 is amended as: “To apply for a patent for a design, the applicant shall submit an application, pictures or photos of the design, a brief introduction to the design, and other documents.
“The relevant pictures or photos submitted by the applicant shall clearly show the product’s design for which the patent protection is requested.”

19. Paragraph 2 of Article 31 is amended as: “An application for a design patent shall be limited to one design. As to two or more similar designs for the same product or for products which fall into the same class and are sold or used in sets, an application for one design may be filed.”

20. Paragraph 2 of Article 47 is amended as: “The decision on invalidating a patent right shall, prior to the invalidation of the patent right, have no retroactive effect on any judgment or mediation document on patent infringement which has been made and enforced by the people’s court, on any implemented or compulsorily enforced decision concerning the settlement of a dispute over patent infringement, or on any performed contract for license of patent exploitation or for assignment of patent right. However, the patentee shall compensate for the damages it or he has maliciously caused to others.”

Paragraph 3 is amended as: “Where, in accordance with the provisions of the preceding paragraph, the fact that no patent infringement compensation, no royalty for the exploitation of the patent or no patent assignment fee is refunded is obviously contrary to the principle of fairness, it shall be totally or partially refunded.”

21 Article 48 is amended as: “Under any of the following circumstances, the patent administrative department of the State Council may, upon the application of an eligible entity or individual, grant it or him a compulsory license to exploit the patent for an invention or utility model:
1. The patentee, after the lapse of 3 full years from the date patent is granted and after the lapse of 4 full years from the date when a patent application is filed, fails to exploit or to fully exploit its or his patent without any justifiable reason; or
2. The patentee’s act of exercising the patent rights is determined as a monopolizing act and it is to eliminate or reduce the adverse consequences of the said act on competition.”

22. One article is added as Article 50: “For the purpose of public health, the patent administrative department of the State Council may grant a compulsory license for a patented medicine so as to produce and export it to the country or region which conforms to the provisions of the relevant international treaty to which the People’s Republic of China has acceded.”

23. One article is added as Article 52: “Where the invention involved in the compulsory license is a semi-conductor technology, the exploitation of the compulsory license shall be limited only to public interests and the circumstance as described in Article 48 (2) of this Law.”

24. One article is added as Article 53: “Besides the circumstances as described in Article 48 (2) and Article 50 of this Law in which a compulsory license is granted, the exploitation of a compulsory license shall be implemented primarily for supplying the domestic market.”

25. Article 51 is changed to Article 54 and is amended as: “An entity or individual who applies for a compulsory license under Article 48 (1) or Article 51 of this Law shall furnish evidence that can prove that it or he has requested the patentee for a license to exploit its or his patent on reasonable terms but failed to obtain such a license within a reasonable time.”

26. Article 54 is changed to Article 57 and is amended as: “The entity or individual that is granted a compulsory license for exploitation shall pay to the patentee a reasonable royalty or deal with the royalty issue under the relevant international treaties to which the People’s Republic of China has acceded. If a royalty is to be paid, the amount of the royalty shall be decided by both parties upon negotiation. If the parties fail to reach an agreement, the issue shall be settled by the patent administrative department of the State Council.”

27. Article 56 is changed to Article 59 and is amended as: “The scope of protection of the patent for an invention or utility model shall be that as specified in the claims. The specifications and the appended pictures may be used to interpret the claims.

The scope of protection of the patent for a design shall be determined by the product incorporating the patented design as shown in the drawings or photographs, the brief introduction may be used for introducing the patented design as shown in the pictures or photos.”

28. Paragraph 2 of Article 57 is changed to Article 61 and is amended as: “Where any dispute over patent infringement involves a patent for invention for the manufacturing process of a new product, the entity or individual manufacturing the identical product shall provide proof on the difference of its own process used in the manufacture of its product from the patented process.

“Where any dispute over patent infringement involves a patent for utility model or design, the people’s court or the patent administrative department may require the patentee or the interested parties to present a patent assessment report issued by the patent administrative department of the State Council, after the retrieval, analysis and assessment of the pertinent utility model or design, as a proof for trying and settling the dispute over patent infringement.”

29. One Article is added as Article 62: “In a dispute over patent infringement, if the accused infringer has evidence to prove that the technology or design it or he exploits is an existing technology or design, no patent infringement is constituted.”

30. Articles 58 and 59 are combined into Article 63 and amended as: “Whoever counterfeits the patent of anyone else shall, in addition to bearing the civil liabilities in accordance with the law, be ordered by the patent administrative department to make a correction and be announced by the patent administrative department; its or his illegal gains, if any, shall be confiscated, and it or he may be fined up to three times the illegal gains. If there is no illegal gain, it or he may be fined up to 200, 000 Yuan. If any crime is constituted, it or he shall be subject to criminal liabilities according to law.”

31. One article is added as Article 64: “When the patent administrative department investigates into and deals with a suspected counterfeit patent case on the basis of the evidence it has already gathered, it may query the relevant parties so as to find the information relevant to the suspected violation, may conduct an on-site inspection over the site of party suspected of having committed the violation, may consult and copy the contracts, invoices, account books and other materials relating to the suspected violation, may check the products relating to the suspected violation, and may seal up or detain the counterfeit patented product as proved by evidence.

“When the patent administrative department exercises the functions as prescribed in the preceding paragraph according to law, the parties shall assist and cooperate with it and shall not reject or hamper it.”

32. Article 60 is changed to Article 65 and amended as: “The amount of compensation for a patent infringement shall be determined on the basis of the actual losses incurred to the patentee as a result of the infringement. If it is difficult to determine the actual losses, the actual losses may be determined on the basis of the gains which the infringer has obtained from the infringement. If it is difficult to determine the losses incurred to the patentee or the gains obtained by the infringer, an amount shall be reasonably determined by reference to the multiple of the royalties for this patent. In addition, the compensation amount shall include the reasonable expenses that the patentee has paid for stopping the infringement.

“If it is difficult to determine the losses incurred to the patentee, the gains obtained by the infringer as well as the royalty for the patent, the people’s court may, by taking into account such factors as the type of patent, nature and particulars of the infringement, etc., decide a compensation in the sum of not less than 10, 000 yuan but not more than 1 million yuan.

33. Article 61 is changed to Article 66 and amended as: “Where a patentee or interested party has evidence to prove that someone else is committing or is going to commit an infringement upon the patent right, and its (his) lawful rights and interests will be damaged and are difficult to be remedied if the said infringement is not stopped in time, it or he may, prior to initiating a lawsuit, apply to the people’s court for taking such measures as ordering the stop of the relevant act.

“When an applicant files an application, it shall provide a guarantee. If it or he fails to do so, the application shall be rejected.

“The people’s court shall make a ruling within 48 hours as of its acceptance of an application. If it is necessary to extend the time limit in a special circumstance, the time limit may be extended for up to 48 hours. If a ruling is made to stop the relevant act, it shall be executed immediately. If any party refuses to accept the ruling, it (he) may apply for one review. The execution of the ruling is not suspended during the process of review.

“If the applicant fails to lodge a lawsuit within 15 days after it takes such measures as ordering the stop of the relevant act, the people’s court shall lift the said measure.

“Where there are errors in an application, the applicant shall compensate the party against whom an application is filed for the losses caused by the stop of the relevant act.”

34. One article is added as Article 67: “To stop a patent infringement, the patentee or any interested party may apply to the people’s court for preserving the evidence when such evidence is likely to be destroyed and hard to be obtained again.

“The people’s court may order the applicant to provide a guarantee for the preservation. If the applicant fails to do so, its or his application shall be rejected.

The people’s court shall make a ruling within 48 hours after it accepts an application. If it makes a ruling on preserving the evidence, the ruling shall be executed immediately.

If the applicant fails to initiate a lawsuit within 15 days after the people’s court has taken the measure of preserving the evidence, the people’s court shall terminate the said measure.

35. Paragraph 1 of Article 63 is changed to Article 69, subparagraph (1) is amended as: “the use, promise to sell, sell or import of the patented product or product directly obtained under the patented process after the said product is sold by the patentee or by its (his) licensed entity or individual;”

One item is added as item (5): “for the purpose of providing the information as required for administrative examination and approval, the production, use or import of patented medicine or patented medicinal equipment as well as the patented medicine or patented medicinal equipment produced or imported exclusively for the said purpose.”

36. Paragraph 2 of Article 63 is changed to Article 70 and amended as: “Whoever uses or sells a patented product without knowing that the product was produced and sold without permission of the patentee or a product directly obtained from a patented process for the purpose of production and business operation is not required to bear the liabilities for compensation provided that it or he can prove that the product is obtained from a legal source.”

This Decision shall be implemented as of October 1, 2009.

The Patent Law of the Peoples’ Republic of China shall be re-promulgated after the corresponding amendments are made and after the sequential order of its articles is adjusted according to this Decision.