Third Revision Of Patent Law In China08/09/2009 by Intellectual Property Watch 5 CommentsShare this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)IP-Watch is a non-profit independent news service, and subscribing to our service helps support our goals of bringing more transparency to global IP and innovation policies. To access all of our content, please subscribe now. You also have the opportunity to offer additional support to your subscription, or to donate.The views expressed in this column are solely those of the authors and are not associated with Intellectual Property Watch. IP-Watch expressly disclaims and refuses any responsibility or liability for the content, style or form of any posts made to this forum, which remain solely the responsibility of their authors.By Wenting Cheng More than 20 years have passed since the Patent Law in People’s Republic of China came into force in 1985. After two major revisions in 1992 and 2000, the third revision of Chinese Patent Law is in progress. The latest amendment of Chinese Patent Law (hereinafter referred to as Patent Law (2008)) was adopted on 27 December 2008 and will enter into force from 1 October 2009. While a large number of provisions in previous Patent Law (2000) have been revised or deleted, patent-related supplementary laws, regulations and judicial interpretations also undergo major revisions in line with Patent Law (2008) to facilitate its implementation.1. Background of the revision The third revision of Patent Law is more an echo of internal demands of China than a response to international pressures. The previous two revisions were mainly focused on fulfilment of China’s international commitments: the 1992 revision to commit the undertakings China has made in Sino-US Memorandum of Understanding on the Protection of Intellectual Property Rights (1992) and the 2000 revision to adapt to TRIPS Agreement and further qualify China as a member of World Trade Organization. [TRIPS is the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights]The ongoing third revision, however, involves two major features – to “increase innovation capacity and strengthen protection on patent” ((Two Feature Highlights the Third Revision of Patent Law: Encourage Innovation and Enhance Protection on Patent, available at: http://news.xinhuanet.com/politics/2008-12/27/content_10567530.htm, last retrieved on August 9, 2009.)) – which run through the new body of Patent Law (2008) and supplementary regulations thereof. Article 1 of Patent Law (2008) provides the purpose of the new legislation: “this law is enacted in order to protect the legitimate rights of patentees, encourage invention-creations, promote the application of invention-creation, enhance innovative capacity and promote scientific progress and economic social development.” It echoes to the national strategy to “enhance independent innovative capacity and build China as an innovative country.” For a country with a patent system for only over two decades, it is a positive indication that China has been aware of significant role patent plays as an instrument for innovation and has focused on more practical issues in enforcement.2. Major changes in the Patent Law (2008) To accomplish these goals, three major groups of changes were included in the new legislation. The first group is composed of changes in substantive requirements for patent grant, more specifically, patentability and subject matter under protection. The second group includes changes on post-grant enforcement, typically specifics in determination of infringement and calculation of damages upon infringement. The third group relates to adaptation of the Chinese Patent Law to international norms on the protection of intellectual property.2.1 Changes to thresholds for patent grant Patent laws regulate the granting of patents mainly by means of defining patentability and the scope of subject matter under protection. Patent Law (2008) is no exception and changes have been made in both respects.2.1.1 Patentability: from relative novelty to absolute novelty Patent Law (2008) has changed the criteria of novelty from relative novelty to absolute novelty, one of the three factors (novelty, inventiveness and usefulness, i.e., industrial applicability) of patentability in China. There are three criteria to judge novelty in Chinese Patent Law: disclosure by (1) prior application, (2) publication and (3) prior use and any other means. Patent Law (2000) required international disclosure in publication and domestic disclosure in prior use and any other means by providing “no identical invention or utility model has been publicly disclosed in domestic or foreign publications or has been publicly used or made known to the public by any other ways domestically.” Patent Law (2008) ((Article 22 of Patent Law (2008), English version available athttp://www.ipr2.org/ipsearch/file.php?id=188, last retrieved on August 9, 2009.)), however, unifies the scope of (2) and (3) into disclosure on the international level. In other words, the scope of disclosure by prior use and any other means has been extended from domestic (relative) to international (absolute). This change, as a reaction to China’s increasingly deeper involvement in globalisation, will increase the threshold of patent grant, and hopefully, improve the quality of patents granted.2.1.2 Subject matter: protection on designs and generic resources Different from many other countries, the Chinese patent system incorporates protection on inventions, utility models and designs into one patent law. Applications on design patents have skyrocketed in the past few years. By the end of the first decade of Patent Law in 1993, the annual design applications reached 10,000, at an average annual increase of 1,000; by 2004, the annual applications reached 100,000, at the annual increase of 15,000. The period of 2004 through 2007 saw a sharp increase of 50,000 annually. ((Bian Yongjun, The Status Quo and Prospects for Protecting Design Patents in China, available at http://www.chinaipmagazine.com/en/journal-show.asp?id=288, last retrieved on August 3, 2008.)) Fast increase in design patents has contributed enormously to overall patent application in China, but it also impairs or will impair the quality of patents granted in China in the long run. This is the main reason for major changes in patentability and granting procedure in the design-related provisions in the current revision.Concerning patentability, Patent Law (2008) Article 23 adds a new section, providing that the design on which a patent may be granted must be substantially different from any prior designs or a combination of the features of prior designs. Any design on which a patent may be granted must not be in conflict with any prior legitimate rights of any other person. The prior design referred to in this law means any design known to the public before the filing date of the patent application in China or abroad. This newly added provision defines two standards to determine the patentability of a design: one is substantial difference and the other is that it is not in conflict with prior rights. Details on these standards are included in the Implementing Regulations of Patent Law and Guidelines for Examination which undergo revisions accordingly. Specifically, major changes take place in the post-grant stage since there is no substantive examination in granting design patents in China. For instance, considerable changes take place in Chapter 5 Part IV of the Guidelines for Examination (Draft for Comments) ((Guideline for Examination (Draft for Comments) is currently asking for comments publicly till 10 August, 2008. The Draft is available at official website of State Intellectual Property Office (SIPO), http://www.sipo.gov.cn/sipo2008/tz/gz/200807/t20080710_468216.html, last retrieved on August 9, 2009.)) Examination on Design in the Invalidation Procedure.To identify substantial difference, the Guidelines for Examination (Draft for Comments) introduce the concept of identical designs and conflicting application. Identical designs refer to the notion that the design examined and the design compared are designs for the same class of products, and all the design features of the design examined and the corresponding design features of the design compared are identical.The Guidelines for Examination (2006) provides a definition on conflicting application that states “when the novelty of an invention or utility model application is examined, an identical invention or utility model application that was filed previously by any other person with the patent office and published on or after the filing date of the application being examined will take away the novelty of the application being examined. During examination of novelty, for the sake of convenience, these kinds of applications that are prejudicial to the novelty of the application being examined are called conflicting applications.” ((2.2 Chapter 3 Part II of the Guideline for Examination (2006).))Obviously, this definition only applies to inventions and utility models. The Guidelines for Examination (Draft for Comments) have extended the scope of conflicting application designs, providing that “an identical design application that was filed previously by any other person with the patent office and published on or after the filing date of the application being examined” is also a conflicting application. ((.2 Chapter 5 Part IV of the Guidelines for Examination (Draft for Comments).)) Does this extension mean that the guidelines are intended to improve the threshold of design patents so that only “novel” design can be granted a patent? The answer may be in the negative. Since the definition is added in the chapter on invalidation procedure, it may only be referred to as ex post benchmark rather than ex ante threshold.In addition, the Guidelines for Examination (Draft for Comments) also clarify the steps for the determination of identical designs in invalidation procedure: (1) Define the content of the state of art, including the shape, pattern and colour as well as their combination, and define the most similar state of art. (2) Identify the differences between the design examined and the most similar state of art. (3) Judge whether the design examined can be obtained by conversion of the state of art by means that are already known or by the combination of state of art and other designs or combination of other designs. ((2.1 Chapter 5 Part IV Guideline for Examination (Draft for Comments).))Concerning the rule of no conflict with prior rights, substantial changes or rather elaborations are made in the Implementation Regulation and the Guidelines for Examination (Draft for Comments) instead of the Patent Law per se. The essence of the rule is that a design patent shall be invalidated when identified in conflict with a legitimate right of others which is obtained before its filing date. ((Article 16 of Several Provisions of the Supreme People’s Court on Issues Concerning Applicable Laws to the Trial of Patent Controversies,http://english.shaanxi.gov.cn/articleAboutgov/aboutgov/govannouncement/200811/6379_1.html, last retrieved on August 9, 2009.)) In this provision, “others” refers to civil entities other than the patentee, e.g. natural persons, legal persons or other organisations; “legitimate right” mainly includes trademarks, copyrights, right to enterprise trade names, right to portrait and exclusive right to the use of package or ornament to a well-known commodity (hereinafter referred to as trade dress); most importantly, “in conflict with” is also closely defined, referring to the idea that a design uses, without the authorisation of the owner to the prior right, subject matter of the prior right and consequently such use of the patent will impair the rights and interest of relevant right owner. ((. 2 Chapter 5 Part IV Guideline for Examination (Draft for Comments).))Due to variations of these prior rights, the guideline further elaborates on the possible conflicts between a design patent and copyright, trademark and trade name, clarified the definition of relevant rights and principle for determination. However, it does not include provisions on conflict between a design and trade dress. Though judicial interpretation has also established the rule of analogy, i.e., the identity or similarity with the typical name, package or ornament of a well-known commodity may be ascertained with reference to the principles and methods for judging identical or similar trademarks, ((Article 4 Interpretation of the Supreme People’s Court on Several Issues concerning the Application of Law in the Trial of Civil Cases Involving Unfair Competition, available at http://www.asianlii.org/cn/legis/cen/laws/iotspcosmataolittocciuc1390/, last retrieved on August 9, 2009.)) details in dealing with such cases is still not clear due to difference between trademark and trade dress.In the Chinese legal system, trade dress is entitled a relatively low level of protection under the Anti-unfair Competition Law which mainly aims to maintain market order and free competition instead of protecting exclusive right to use. The right comes into being automatically when the commodity comes into being and no registration procedure like trademark registration is involved. Furthermore, the right is usually identified upon infringement. Therefore, proof of existence of such right is quite different from that of trademarks. Disputes between trade dress and design have already arisen in practice, ((Li Qin, Zhou Ruiping, Cheng Hongsheng and Gao Minsan, Prior Use of Design owns prior rights http://rmfyb.chinacourt.org/public/detail.php?id=120986, last retrieved on August 9, 2009.))details in handling these cases can be developed by cases. It will also be beneficial if the Guideline for Examination could further elaborate on this issue.Ms. Wenting Cheng is a research associate at the Intellectual Property Development Research Center of State Intellectual Property Office (SIPO) of China. She holds an LL.M specialising in Intellectual Property from Peking University School of Law.Disclaimer: This paper cannot be taken to reflect any views of SIPO. Any opinions or mistakes are those of the author.[Editor’s Note: this paper is intended to be the first in a series]Share this Story:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Related"Third Revision Of Patent Law In China" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.