PRC Patent Law (3rd Revision)

The term “invention” means a new technical solution put forward in respect of a product, process or an improvement thereto.

The term “utility model” means a new technical solution that is suitable for utilisation and that is put forward in respect of the form or structure of a product or a combination thereof.

The term “design” means a new design that is esthetically pleasing, is suitable for industrial application and is made in respect of the form or pattern of a product or a combination thereof or a combination of the colours, form and pattern thereof.

Article 3: The State Council's patent administrative department shall be responsible for the administration of patent work nationwide, the acceptance and review of all patent applications and the granting of patents in accordance with the law.

The departments of people's governments of provinces, autonomous regions and municipalities directly under the central government charged with the administration of patent work shall be responsible for the administration of patent work within their jurisdictions.

Article 4: If an invention or creation for which a patent application is filed has a bearing on the security or a material interest of the state and needs to be kept confidential, matters shall be handled in accordance with relevant state provisions.

Article 5: Patents shall not be granted for inventions or creations that violate the law, run counter to social ethics or jeopardise the public interest.

If genetic resources are obtained or used in violation of laws or administrative regulations and an invention or creation is completed on the basis of such genetic resources, the patent shall not be granted therefor.

Article 6: An invention or creation completed while carrying out a task assigned by one's work unit or chiefly by using the material and technical resources of one's work unit is a service invention or creation. The right to an application for a patent for such service invention or creation shall vest in the work unit. Once the application has been approved, the work unit shall be the patentee.

The right to an application for a patent for a non-service invention or creation shall vest in the inventor or designer. Once the application is approved, the inventor or designer shall be the patentee.

If a work unit and the inventor or designer of an invention or creation completed using the material and technical resources of the work unit have entered into a contract and such contract contains provisions on the vesting of the right to an application for a patent and the patent ownership, such provisions shall apply.

Article 7: No work unit or individual shall inhibit an inventor or designer from applying for a patent for his/her non-service invention or creation.

Article 8: Unless otherwise agreed, the right to an application for a patent for an invention or creation completed in co-operation by two or more work units or individuals or for an invention or creation completed by a work unit or individual pursuant to a commission from another work unit or individual shall vest in the work unit or the individual that completed or the work units or individuals who jointly completed the same. Once the application has been approved, the work unit(s) or individual(s) that filed the application shall be the patentee(s).

Article 9: Only one patent may be granted for the same invention or creation. However, if an applicant, on the same date, files for both a utility model patent and an invention patent for the same invention or creation and if, before the termination of the utility model patent that was obtained first, such applicant issues a declaration relinquishing the patent to such utility model, it/he/she may be granted an invention patent therefor.

If two or more applicants separately apply for a patent for the same invention or creation, the patent shall be granted to the person who filed its/his/her application first.

Article 10: Both the right to an application for a patent and a patent may be assigned.

If a Chinese work unit or individual wishes to assign its/his/her right to an application for a patent or its/his/her patent to a foreign national, foreign enterprise or other foreign organisation, it/he/she shall carry out procedures in accordance with relevant laws and administrative regulations.

If the right to an application for a patent or a patent is to be assigned, the parties shall enter into a written contract and register the same with the State Council's patent administrative department. The State Council's patent administrative department shall gazette such assignment. An assignment of the right to an application for a patent or an assignment of a patent shall enter into effect on the registration date.

Article 11: Once an invention patent or utility model patent has been granted, no work unit or individual may exploit such patent without a licence from the patentee, unless otherwise provided in this Law; that is, it/he/she may not make, use, offer to sell, sell or import the patentee's patented product for production or other business purposes, or use the patentee's patented process or use, offer to sell, sell or import products directly obtained through the application of such patented process.

Once a design patent has been granted, no work unit or individual may exploit such patent without a licence from the patentee; that is, it/he/she may not, for production or other business purposes, make, offer to sell, sell or import products incorporating the patentee's design.

Article 12: If a work unit or individual wishes to exploit the patent of a third party, it/he/she shall enter into a licensing contract with, and pay patent royalties to, the patentee. The licencee has no right to permit any work unit or individual other than those specified in the contract to exploit the patent.

Article 13: Once an application for an invention patent has been published, the applicant may demand that work units or individuals exploiting its/his/her invention to pay an appropriate fee.

Article 14: If an invention patent of a state-owned enterprise or state-owned public institution is materially significant to the state interest or public interest, a relevant competent State Council department or the people's government of a province, autonomous region or municipality directly under the central government, following approval by the State Council, may decide to promote the utilisation thereof within the approved scope and permit designated work units to exploit the same. The work units exploiting such patent shall pay royalties to the patentee in accordance with state provisions.

Article 15: If co-holders of the right to an application for a patent or co-holders of a patent have provided for the exercise of the rights thereof, such provisions shall apply. If they have not so provided, a co-holder may exploit such patent itself/himself/herself or grant a non-exclusive licence to a third party to exploit such patent. If exploitation of the patent is licensed to a third party, the royalties derived therefrom shall be shared among the co-holders.

With the exception of the circumstances specified in the preceding paragraph, the exercise of the right to an application for a patent or patent rights held in common shall require the consent of all of the co-holders.

Article 16: A work unit that has been granted a patent shall reward the inventor or designer of the service invention or creation. Once the exploitation of a patent for an invention or creation has commenced, the inventor or designer shall be given reasonable remuneration determined based on the extent of the utilisation of such patent and the economic returns derived therefrom.

Article 17: An inventor or designer shall have the right to indicate in the patent documents that he/she is the inventor or designer.

A patentee shall have the right to place the patent symbol on its patented product and the packaging thereof.

Article 18: If a foreign national, foreign enterprise or other foreign organisation without permanent residence or a place of business in China applies for a patent in China, matters shall be handled pursuant to an agreement signed by his/her/its home country with China, or an international convention to which they are both parties, or the principle of reciprocity, and in accordance herewith.

Article 19: A foreign national, foreign enterprise or other foreign organisation without permanent residence or a place of business in China wishing to apply for a patent in China or handle other patent matters shall appoint a lawfully established patent agency to handle such matters.

A Chinese work unit or individual wishing to apply for a patent or handle other patent matters in China may appoint a lawfully established patent agency to handle such matters.

A patent agency shall comply with laws and administrative regulations when handling patent applications and other patent matters as appointed by principals. With the exception of the information on a principal's invention or creation that has been published or gazetted with the patent application, a patent agency shall bear an obligation of confidentiality. The specific measures for the administration of patent agencies shall be specified by the State Council.

Article 20: Any work unit or individual wishing to apply for a patent in a foreign country for an invention or utility model completed in China shall first submit such invention or utility model to the State Council's patent administrative department for a confidentiality review. The procedure, period, etc. for the confidentiality review shall be handled in accordance with State Council provisions.

Chinese work units and individuals may file international patent applications in accordance with relevant international conventions to which the People's Republic of China is a party. When an applicant wishes to file an international patent application, it/he/she shall abide by the preceding paragraph.

The State Council's patent administrative department shall handle international patent applications pursuant to relevant international conventions to which the People's Republic of China is a party, this Law and relevant provisions of the State Council.

A patent shall not be granted where the patent is applied for in China in respect of an invention or utility model for which a patent was applied for in a foreign country in violation of the first paragraph of this Article.

Article 21: The State Council's patent administrative department and its patent re-examination board shall deal with patent-related applications and petitions in accordance with the law based on the requirements of objectivity, impartiality, accuracy and timeliness.

The State Council's patent administrative department shall release patent information in a complete, accurate and timely manner and publish the patent gazette on a regular basis.

The working personnel and relevant personnel of the State Council's patent administrative department shall bear an obligation of confidentiality in respect of the contents of a patent application until the same has been published or gazetted.

PART TWO: CONDITIONS FOR THE GRANTING OF PATENTS

Article 22: To be granted a patent, an invention or utility model shall be novel, inventive and practically applicable.

The term “novelty” means that the invention or utility model does not fall within prior art; and that no work unit or individual has filed an application with the State Council's patent administrative department in respect of the same invention or utility model before the filing date and has the same described in any patent application document published or patent document gazetted after the filing date.

The term “inventive” means that, in comparison with prior art, the invention has prominent substantive features and represents distinctive progress, or that the utility model has substantive features and represents progress.

The term “practically applicable” means that the invention or utility model can be manufactured or used and can generate a positive effect.

For the purposes of this Law, the term “prior art” means the art known to the public inside and/or outside China before the filing date.

Article 23: To be granted a patent, a design shall not fall within existing designs; and no work unit or individual shall have filed an application with the State Council's patent administrative department in respect of the same design before the filing date and have the same described in any patent document gazetted after the filing date.

To be granted a patent, a design shall be distinctively different when compared to existing designs or to a combination of the features of an existing design.

To be granted a patent, a design may not conflict with the lawful rights obtained by a third party before the filing date.

For the purposes of this Law, the term “existing designs” means designs known to the public inside and/or outside China before the filing date.

Article 24: An invention or creation for which a patent application is filed shall not lose its novelty should any of the following circumstances have arisen six months before the filing date:

(1) it was exhibited for the first time at an international exhibition organised or recognised by the Chinese government;

(2) it was disclosed for the first time at a specified academic conference or technology conference; or

(3) a third party divulged details thereof without the consent of the applicant.

Article 25: Patents shall not be granted for:

(1) scientific discoveries;

(2) rules and methods for intellectual activities;

(3) methods for the diagnosis and treatment of diseases;

(4) animal and plant varieties;

(5) substances derived from the use of nuclear transformation methods; or

(6) designs of the patterns or colours of two-dimensional printed matter or combinations thereof created principally to function as a marking.

A patent may be granted in accordance herewith for the process of producing the products specified in Item (4) of the preceding paragraph.

PART THREE: PATENT APPLICATIONS

Article 26: When applying for a patent for an invention or utility model, documents such as a request, a description and an abstract thereof, and the claims shall be submitted.

The request shall clearly specify the title of the invention or utility model, the name of the inventor, the name and address of the applicant and other particulars.

The description shall provide a clear and complete description of the invention or utility model such that a person skilled in the art could realise the same. When necessary, drawings shall be attached. The abstract shall give a brief description of the main technical points of the invention or utility model.

The claims shall be based on the description and clearly and concisely delimit the scope of patent protection that is claimed.

For an invention or creation completed based on genetic resources, the applicant shall give an account in the patent application documents of the direct origin and ultimate origin of the genetic resources. If the applicant is unable to give an account of the ultimate origin, it/he/she shall give the reason therefor.

Article 27: When applying for a patent for a design, documents such as a request, drawings or photographs of the design and a concise description of the design shall be submitted.

The relevant drawings or photographs submitted by the applicant shall clearly show the design of the product for which patent protection is claimed.

Article 28: The date on which the State Council's patent administrative department receives the patent application documents is the filing date. If the application documents are sent by mail, the postmark date shall be the filing date.

Article 29: If, within 12 months from the date of first filing of a patent application for an invention or utility model in a foreign country, or within six months from the date of first filing of a patent application for a design in a foreign country, an applicant files a patent application in China in respect of the same subject matter, it/he/she shall be entitled to the right of priority pursuant to an agreement signed by said foreign country with China, or an international convention to which they are both parties, or based on the principle of mutual recognition of the right of priority.

If, within 12 months from the date of first filing of a patent application for an invention or utility model in China, an applicant files a patent application with the State Council's patent administrative department in respect of the same subject matter, it/he/she shall be entitled to the right of priority.

Article 30: If an applicant wishes to claim a right of priority, it/he/she shall submit a written declaration when filing its/his/her application and, within three months, submit copies of the patent application documents it/he/she filed at the time of the first filing. If the applicant fails to submit a written declaration or fails to submit the copies of the patent application documents within the specified period of time, it/he/she shall be deemed not to have claimed a right of priority.

Article 31: A patent application for an invention or utility model shall be limited to one invention or utility model. If two or more inventions or utility models fall within a single overall inventive concept, a single invention or utility model patent application may be filed therefor.

A patent application for a design shall be limited to one design. In the case of two or more similar designs used for a single product, or two or more designs used on a single category of products that are sold or used as a set, a single design patent application may be filed therefor.

Article 32: An applicant may withdraw its/his/her patent application at any time before granting of the patent.

Article 33: An applicant may revise its/his/her patent application documents provided that such revisions to the invention or utility model patent application documents do not exceed the scope described in the original description and claims or that such revisions to design patent application documents do not exceed the scope indicated by the original drawings or photographs.

PART FOUR: REVIEW AND APPROVAL OF PATENT APPLICATIONS

Article 34: After receipt of an invention patent application, the State Council's patent administrative department shall, following a preliminary examination and determination that the same satisfies the requirements hereof, publish the same after the lapse of a full 18 months following the filing date. Subject to a request from the applicant, the State Council's patent administrative department may publish the application at an earlier date.

Article 35: Subject to a request made by the applicant at any time within three years from the filing date for an invention patent application, the State Council's patent administrative department may conduct a substantive review of the application. If the applicant fails to request a substantive review within that period without legitimate reason, such application shall be deemed to have been withdrawn.

If the State Council's patent administrative department deems it necessary, it may carry out a substantive review of an invention patent application at its own discretion.

Article 36: When an invention patent applicant requests a substantive review, it/he/she shall submit reference information that was pertinent to its/his/her invention before the filing date.

With respect to an invention patent for which a patent application has previously been filed in a foreign country, the State Council's patent administrative department may require the applicant to submit within a specified period of time information on the search conducted in the said country as part of the review of its/his/her application or information on the outcome of such review. If the applicant fails to submit the same within the specified period of time without a legitimate reason, the application shall be deemed to have been withdrawn.

Article 37: If the State Council's patent administrative department, after a substantive review of an invention patent application, deems the same as not being in compliance with this Law, it shall notify the applicant thereof and require it/him/her to give its/his/her opinions thereon or revise its/his/her application within a specified period of time. If the applicant fails to give a response within the specified period of time without a legitimate reason, the application shall be deemed to have been withdrawn.

Article 38: If the State Council's patent administrative department still deems the invention patent application as not being in compliance with this Law after the applicant has given its/his/her opinions or revised its/his/her application, it shall reject such application.

Article 39: If the State Council's patent administrative department, following a substantive review, does not find any reasons for rejecting the invention patent application, it shall render a decision to grant the invention patent, issue an invention patent certificate and register and gazette the patent. The invention patent shall enter into effect on the date of gazetting.

Article 40: If the State Council's patent administrative department, following a preliminary review, does not find any reasons for rejecting a utility model patent application or design patent application, it shall render a decision to grant the utility model patent or design patent, issue the corresponding patent certificate and register and gazette the patent. The utility model patent or design patent shall enter into effect on the date of gazetting.

Article 41: The State Council's patent administrative department shall establish a patent re-examination board. If a patent applicant is dissatisfied with the decision rendered by the State Council's patent administrative department to reject its/his/her application, it/he/she may, within three months from the date of receipt of the notice, petition the patent re-examination board for a re-examination. After the re-examination, the patent re-examination board shall render a decision and notify the patent applicant thereof.

If the patent applicant is dissatisfied with the re-examination decision rendered by the patent re-examination board, it/he/she may, within three months from the date of receipt of the notice, institute a legal action in a people's court.

PART FIVE: TERMS, TERMINATION AND INVALIDITY OF PATENTS

Article 42: The term of an invention patent shall be 20 years, and that of a utility model patent or design patent shall be 10 years, each counting from the filing date.

Article 43: A patentee shall commence paying an annual fee from the year in which it/he/she is granted the patent.

Article 44: A patent shall terminate before the expiration of the term if:

(1) the annual fee is not paid in accordance with provisions; or

(2) the patentee declares in writing that it/he/she is abandoning its/his/her patent.

If a patent is terminated before the expiration of its term, the State Council's patent administrative department shall register and gazette the same.

Article 45: If, from the date that the State Council's patent administrative department gazettes the granting of a patent, any work unit or individual is of the opinion that the granting of the patent does not comply with relevant provisions hereof, it may petition the patent re-examination board to have the patent declared invalid.

Article 46: The patent re-examination board shall, in a timely manner, review and render a decision on the petition to have the patent declared invalid and notify the petitioner and the patentee thereof. A decision declaring a patent invalid shall be registered and gazetted by the State Council's patent administrative department.

If a party is dissatisfied with the decision rendered by the patent re-examination board to declare the patent invalid or to uphold the patent, it/he/she may, within three months from the date of receipt of the notice, institute a legal action in a people's court. The people's court shall notify the other party to the procedure for declaration of a patent as invalid to participate in the action as a third party.

Article 47: A patent that is declared invalid shall be deemed never to have existed.

A decision declaring a patent invalid shall not apply retroactively to patent infringement judgments and settlements rendered and enforced by a people's court, decisions resolving patent infringement disputes that have been performed or enforced and patent licensing contracts and patent assignment contracts performed before the patent being declared invalid. However, damages shall be given for losses incurred by a third party due to bad faith on the part of the patentee.

If, pursuant to the preceding paragraph, not refunding the patent infringement damages, patent royalties and/or patent assignment fees would clearly run counter to the principle of fairness, they shall be wholly or partially refunded.

PART SIX: COMPULSORY LICENCES FOR THE EXPLOITATION OF PATENTS

Article 48: The State Council's patent administrative department may, pursuant to an application by a work unit or individual that satisfies the criteria for exploiting an invention patent or utility model patent, grant it/him/her a compulsory licence to exploit such patent if:

(1) the patentee has failed, without a legitimate reason, to exploit or fully exploit such patent after the lapse of a full three years following the granting of the patent and a full four years following the date of filing of the patent application; or

(2) the exercise of the patent rights by the patentee has been determined in accordance with the law to be a monopolistic act, and the compulsory licence is granted to eliminate or minimise the adverse effect of such act on competition.

Article 49: The State Council's patent administrative department may grant compulsory licences to exploit an invention patent or utility model patent in a national emergency or extraordinary circumstances or where it would be in the public interest.

Article 50: For public health reasons, the State Council's patent administrative department may grant a compulsory licence to manufacture a patented pharmaceutical and export the same to countries or regions that comply with relevant international conventions to which the People's Republic of China is a party.

Article 51: If a patented invention or utility model represents a major technical advance, with clear economic significance, over a previously patented invention or utility model and the exploitation of the former is dependent on the exploitation of the latter, the State Council's patent administrative department may, pursuant to an application by the latter patentee, grant it/him/her a compulsory licence to exploit the former invention or utility model.

Where a compulsory licence has been granted in accordance with the preceding paragraph, the State Council's patent administrative department may, pursuant to an application by the former patentee, also grant it/him/her a compulsory licence to exploit the latter invention or utility model.

Article 52: If the invention or creation on which a compulsory licence has a bearing is semiconductor technology, its exploitation shall be limited to public interest objectives and the circumstance set forth in Item (2) of Article 48 hereof.

Article 53: With the exception of compulsory licences granted pursuant to Item (2) of Article 48 and Article 50 hereof, exploitation of patents compulsorily licensed shall be mainly for the purpose of supplying the domestic market.

Article 54: A work unit or individual that applies for a compulsory licence pursuant to Item (1) of Article 48 or Article 51 hereof shall provide evidence showing that it/he/she proposed reasonable conditions when asking the patentee to grant it/him/her a licence to exploit the patent but failed to obtain such licence within a reasonable period of time.

Article 55: When the State Council's patent administrative department renders a decision to grant a compulsory licence to exploit a patent, it shall, in a timely manner, notify the patentee thereof, and register and gazette the same.

A decision to grant a compulsory licence to exploit a patent shall, based on the reason for the granting thereof, specify the scope and the period of time for the exploitation thereof. When the reason for the compulsory licence is eliminated and does not arise again, the State Council's patent administrative department shall, pursuant to a petition from the patentee, render a decision to terminate the compulsory licence to exploit the patent after conducting a review.

Article 56: A work unit or individual that has obtained a compulsory licence to exploit a patent shall not have an exclusive right to exploit the patent nor the right to permit others to exploit the same.

Article 57: A work unit or individual that has obtained a compulsory licence to exploit a patent shall pay the patentee reasonable royalties or handle the royalty issue in accordance with relevant international conventions to which the People's Republic of China is a party. If royalties are to be paid, the amount thereof shall be determined by the parties through negotiations. If the parties fail to reach an agreement, the State Council's patent administrative department shall render a ruling thereon.

Article 58: If a patentee is dissatisfied with the decision rendered by the State Council's patent administrative department regarding a compulsory licence to exploit a patent, or if either the patentee or the work unit or individual that obtained the compulsory licence to exploit the patent is dissatisfied with the ruling rendered by the State Council's patent administrative department on the royalties for the compulsory licence, it/he/she may institute a legal action in a people's court within three months from the date of receipt of the notice.

PART SEVEN: PATENT PROTECTION

Article 59: The scope of protection of an invention or utility model patent shall be determined in line with the content of the claims. The description and the attached drawings may be used to interpret the content of the claims.

The scope of protection of a design patent shall be determined in line with the design of the product as shown in the drawings or photographs. The concise description may be used to interpret the design of the product shown in the drawings or photographs.

Article 60: A dispute arising from the exploitation of a patent without licence of the patentee, i.e. infringement of its/his/her patent, shall be resolved by the concerned parties through negotiations. If a concerned party or the concerned parties refuse(s) such negotiations or if the negotiations are unsuccessful, the patentee or a materially interested party may institute a legal action in a people's court or, alternatively, it/he/she may petition the department in charge of the administration of patent work to resolve the matter. If the department in charge of the administration of patent work, in resolving the matter, holds that infringement is established, it may order the infringer to halt the infringement immediately. If a concerned party is dissatisfied, it/he/she may institute a legal action in a people's court pursuant to the PRC Administrative Procedure Law within 15 days from the date of receipt of the resolution notice. If the infringer does not institute a legal action within the specified period of time and does not halt the infringement, the department in charge of the administration of patent work may apply to a people's court for enforcement. At the request of a concerned party, the department in charge of the administration of patent work that resolved the matter may mediate in the determination of the measure of damages. If the mediation is unsuccessful, a concerned party may institute a legal action in a people's court pursuant to the PRC Civil Procedure Law (2nd Revision).

Article 61: If a patent infringement dispute involves an invention patent for a new product manufacturing process, the work unit or individual that is manufacturing an identical product shall provide proof that its/his/her product manufacturing process is different from the patented process.

If a patent infringement dispute involves a utility model patent or design patent, the people's court or the authority charged with the administration of patent work may require the patentee or the materially interested party to provide the patent assessment report prepared by the State Council's patent administrative department after conducting a search, analysis and assessment of the relevant utility model or design, which report shall serve as evidence in the trial or resolution of the patent infringement dispute.

Article 62: If the alleged infringer in a patent infringement dispute has evidence demonstrating that the art or design that it/he/she is exploiting falls within prior art or existing designs, such exploitation shall not constitute patent infringement.

Article 63: If a party passes off the patent of another as its/his/her own, in addition to bearing civil liability in accordance with the law, the department in charge of the administration of patent work shall order it/him/her to rectify the matter and announce the same, confiscate its/his/her illegal income and may impose a fine less than four times the illegal income. If there was no illegal income, it may impose a fine less than Rmb200,000. If a criminal offence is constituted, criminal liability shall be pursued in accordance with the law.

Article 64: Based on evidence that it has obtained, a department in charge of the administration of patent work may, when investigating and handling an alleged act of passing off of another's patent, question relevant parties and investigate the circumstances relating to the alleged violation of the law; conduct an examination of the concerned party's site where the alleged violation of the law has taken place; review and take copies of contracts, invoices, account books and other information relating to the alleged violation of the law; examine products relating to the alleged violation of the law and may place under seal or seize products for which there is evidence of their incorporating the patent that has been passed off.

When a department in charge of the administration of patent work exercises the powers set forth in the preceding paragraph, the concerned party shall give its/his/her assistance and co-operation and may not refuse or interfere with such exercise.

Article 65: The measure of damages for infringement of a patent shall be determined based on the actual losses incurred by the rights holder as a result of the infringement. If the actual losses are difficult to determine, the measure of damages may be determined based on the benefits derived by the infringer from the infringement. If both the losses incurred by the rights holder and the benefits derived by the infringer are difficult to determine, the measure of damages shall be reasonably determined at (a) multiple(s) of the royalties for a licence of such patent. The measure of damages shall additionally include the reasonable expenditures incurred by the rights holder in halting the infringement.

If the losses incurred by the rights holder, the benefits derived by the infringer and the royalties for a licence of the patent are all difficult to determine, the people's court may, on the basis of factors such as the type of patent, and the nature and circumstances of the infringement, decide to award damages of not less than Rmb10,000 and not more than Rmb1 million.

Article 66: If a patentee or a materially interested party has evidence that a third party is currently infringing or is about to infringe his/her/its patent and failure to halt the same in a timely manner would cause its/his/her lawful rights and interests to suffer irreparable harm, it/he/she may, before instituting a legal action, apply to a people's court to have it order a halt to the relevant act.

When the applicant submits its/his/her application, it/he/she shall provide security. If it/he/she fails to provide such security, its/his/her application shall be rejected.

The people's court shall render its ruling within 48 hours from the time of acceptance of the application. If the period needs to be extended due to special circumstances, it may be extended for 48 hours. If a ruling ordering a halt to the relevant act is rendered, such ruling shall be executed immediately. If a party is dissatisfied with the ruling, it/he/she may apply for review once. Execution of the ruling shall not be suspended during the period of review.

If the applicant does not institute a legal action within 15 days from the date on which the people's court took the measure of ordering a halt to the relevant act, the people's court shall lift such measure.

If the application was erroneous, the applicant shall compensate for the losses incurred by the respondent as a result of halting the relevant act.

Article 67: Where evidence could be lost or difficult to secure at a future date, the patentee or a materially interested party may, for the purpose of halting infringement, apply to a people's court for preservation of evidence before it/he/she institutes a legal action.

To take such preservation measures, the people's court may order the applicant to provide security. If it/he/she fails to provide security, its/his/her application shall be rejected.

The people's court shall render its ruling within 48 hours from the time of acceptance of the application. If a ruling to take preservation measures is rendered, such ruling shall be executed immediately.

If the applicant does not institute a legal action within 15 days from the date on which the people's court took the preservation measures, the people's court shall lift such measures.

Article 68: The period of prescription for the infringement of a patent shall be two years counting from the date on which the patentee or materially interested party learnt of or ought to have learnt of the infringement.

If an invention is used during the time between the publication of the invention patent application and the granting of the patent without the payment of appropriate royalties, the period of prescription for a demand by the patentee for payment of royalties shall be two years counting from the date on which the patentee learnt or ought to have learnt that the third party was using its/his/her invention. However, if the patentee learnt or ought to have learnt thereof before the date on which the patent was granted, the period of prescription shall count from the date on which the patent was granted.

Article 69: Infringement of a patent shall not be deemed to have occurred if:

(1) the patented product or product directly obtained by applying the patented process is used, offered to be sold, sold or imported after it is sold by the patentee or a work unit or individual licensed thereby;

(2) an identical product was being manufactured, an identical process was being used or the necessary preparations for such manufacture or use were duly carried out before the filing date of the patent application and such manufacture or use is continued only within the original scope;

(3) the relevant patent is used, for its own purposes, in its apparatus or equipment, by a foreign means of transportation in transit through the territory, territorial waters or territorial airspace of China pursuant to an agreement signed by its home country with China, an international convention to which both countries are parties, or the principle of reciprocity;

(4) the relevant patent is used solely for scientific research or experimentation; or

(5) the manufacture, use or import of a patented pharmaceutical or patented medical instrument/ apparatus or the manufacture or import specifically on its/his/her behalf of a patented pharmaceutical or patented medical instrument/apparatus for the purpose of providing the information required for administrative examination and approval.

Article 70: If a patent infringing product that is manufactured and sold without a licence from the patentee is used, offered to be sold or sold, in ignorance of the foregoing fact, for production and/or other business purposes and proof of the lawful provenance of such product can be substantiated, no liability for damages shall be borne.

Article 71: If Article 20 hereof is violated by applying for a patent in a foreign county and divulging a state secret, administrative penalties shall be imposed on the perpetrator by the work unit with which he/she is serving or by the competent authority at the next higher level. If a criminal offence is constituted, criminal liability shall be pursued in accordance with the law.

Article 72: If an inventor or designer is deprived of his/her right to an application for a patent for a non-service invention or creation or other rights or interests specified herein, administrative penalties shall be imposed by the work unit with which the perpetrator is serving or by the competent authority at the next higher level.

Article 73: A department in charge of the administration of patent work may not involve itself in business activities such as recommending a patented product to the public.

If a department in charge of the administration of patent work violates the preceding paragraph, the authority at the next higher level or the supervision authority shall order it to rectify the matter, eliminate the effect thereof and, if there was illegal income, confiscate such income. If the circumstances are serious, administrative penalties shall be imposed on the supervisor directly in charge and other directly responsible persons.

Article 74: If a member of the working personnel of the state authority that is engaged in patent administration work or a member of the working personnel of another relevant state authority is derelict in his/her duties, abuses his/her authority, practises favouritism by committing fraud and the same constitutes a criminal offence, criminal liability shall be pursued in accordance with the law. If a criminal offence is not constituted, administrative penalties shall be imposed in accordance with the law.

PART EIGHT: SUPPLEMENTARY PROVISIONS

Article 75: When applying to the State Council's patent administrative department for a patent or carrying out other procedures, fees shall be paid in accordance with provisions.

Article 76: This Law shall be effective as of April 1 1985.