SIPO orders patent offices to get tough

China's State IP Office (SIPO) released its draft patent administrative enforcement rules for public comment on January 27. The draft places greater emphasis on the quality and professionalism of local IP officials, tackles procedural issues and provides general guidelines for online infringement. Comments are due by March 15 2015.

The IP office only has the mandate to investigate but not to award compensation, which makes it “a bit of a toothless tiger”, said Elliot Papageorgiou of Rouse.

With these rules, SIPO is asking all local branches to step up scrutiny and enforcement amid calls for the agency to be given more clout. Four provinces – Chongqing, Guangdong, Hebei and Henan – already have regulations that give the local Patent Administration Bureaus the authority to raid.

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SIPO's promises

With its focus on enforcement, the draft rules pledge to publish case decisions and details of working practices to increase transparency. “It also appears that SIPO wants to make the administrative route more attractive by shortening the time to close cases,” said He Jing of AnJie Law Firm.

The time for responding to infringement cases will be reduced to three months from four for utility models and inventions, and two months for designs. The draft also provided a timeline for responding to reports of counterfeiting.

Practitioners are concerned with the guidelines for administrative action against online business platforms. He Jing hopes that this e-commerce provision will have a real impact as design infringement is something online platforms are not always willing to deal with. “The draft is calling for the local IP offices to pay more attention to this issue,” he said, adding that “SIPO sees an opportunity to actively work with platforms like Taobao to curb sales of design-infringing products.”

Brand owners have been active in enforcing their rights through the current reporting systems. But having to file separate complaints for each and every platform for the same infringement is inefficient. “The standards and procedures for the IP complaint and dispute resolution mechanisms are not transparent enough,” Spring Chang and Martin Meng of Chang Tsi & Partners told China Law & Practice.

They called for improving conditions for accepting cases, adding that owners should also be able to seek the identity of the infringers because it is difficult and costly for them to do this on their own, based on the limited information available on the platforms.

The draft provides that authorities should order the platforms to remove or screen sites related to infringing products. “There should be a specific provision regarding investigation and evidence collection in Chapter 5 of the draft to ensure platforms cooperate with the local IP offices,” wrote Chang and Meng.

Judicial system prevails

“Although the IP authorities [in the four provinces where raids are allowed] are reasonably active and we have had several clients who were successful using this route, most still prefer civil litigation,” said Papageorgiou.

IP owners usually use the judicial system to enforce their patents because administrative action may be subject to court review anyway.

Some brand owners are also said to be wary of mistreatment in administrative enforcement, with the IP offices targeting foreign companies and being under the influence of local businesses. In court, however, both the defendant and plaintiff get a hearing and the judge's decision is publically respected and enforceable.

The parallel enforcement system of China has seemed complicated to many foreign patent owners, but “misalignment between judicial and administrative enforcement is not a major concern,” wrote Chang and Meng. They added that “the owners act ahead of local IP offices to ensure quick action is taken against the potential infringers.”

More administrative power coming soon

In any case, the authorities may soon be granted the power to administer penalties and determine damages through the fourth amendment of the PRC Patent Law.

“The new patent law, which is being drafted right now, may give the authorities the power to raid on a national level,” said Papageorgiou. “There's some panic being felt on all sides that this may give them too much power, but the draft SIPO rules may be preparing the authorities for that. This is a radical change that would make China unique.”


By Katherine Jo