China's Patent Legislation Through the Years

In 1992, the Patent Law was amended for the first time making medicine, food and chemical products patent eligible, extending the duration of patents, and making importing patented products an infringing act.

Among the more notable amendments was the year 2000 amendment which brought substantive changes to the Chinese Patent Law to include China's commitments to the World Trade Organization agreement. With this amendment, offering to sell patented products was newly added as an infringing act, the way of calculating compensation of damages for patent infringement was clarified, the preliminary injunction system was provided, and restrictions for issuance of compulsory license were strengthened.

The latest and third amendment to the Patent Law was in 2008 which newly introduced the change of prior arts to include public use worldwide, prior art defense, statutory damages for patent infringement, and the evidence preservation system.

All three amendments showed China's progress through the years, and have collectively improved the completeness and effectiveness of China's patent system, aligning it with standard international practice.

The fourth amendment to the Chinese Patent Law is currently open for public comments, and the draft amendment is expected to be finalized within 2019.

How is the patent legislation in China different from other countries?

Compared with other major economies in the world, China has witnessed much more changes to its patent legislation in the past few decades. Just like the country itself, China's patent system has evolved in an unprecedented pace since its establishment in 1984, and it will most likely continue to evolve in the foreseeable future.

The last three amendments had introduced major changes especially in patentable subject matters, definition of infringing acts, duration for patent rights, calculation of damages, among others. Anyone doing business in China should always keep a close eye on the country's fast evolving patent legislation in order to get the best protection for their patent rights in China.

How has the patent system changed to reflect China's open-door policy after 1978?

The current patent system of China is essentially a creation of the country's open-door policy.  Since its promulgation in 1984, the Chinese Patent Law has undergone multiple changes to keep up and be on par with the continuous progress of the open-door policy.

Looking back on the changes to the Chinese Patent Law over the past decades, we can see how China has come to adopt international standards and amend their laws as much as possible looking inward from a global perspective. Take for example, importing patented products without the permission of a patentee was added as an infringing act in the first amendment to the patent law.

There were many other added requirements and relaxed restrictions specifically catering to foreigners and foreign countries in the third amendment to the patent law, e.g. foreigners were no more required to entrust only a few specified Chinese patent agents, the procedures for transferring patents to foreigners were relaxed, an invention made in China was no longer required to be first filed in China but a foreign filing license would suffice, and prior arts for assessing novelty and inventiveness were changed to further include public use worldwide.

What is China's strategy moving forward to protect IP rights? How is it reflected in the legislation?

In line with the country's overall economic strategy for industrial upgrading, China is likely to hold on to its pro-IP-owner strategy in protecting IP rights. The new patent legislation (draft) will further strengthen statutory protection as several measures have been introduced to strengthen protection on patentees and improve enforceability of patent rights.

The Supreme People's Court (SPC) have also introduced a unified judicial practice for patent protection, with effect from January 1, 2019, where the Intellectual Property Court of the SPC can adjudicate on all second-instance patents cases and technology-related IP disputes.

The State Council published the National Patent Development Strategy (2011 – 2020) in 2010 – how is China progressing according to this plan, and what are the implementation already put in place?

Over the past eight years, China has been steadily progressing to achieve the objectives set in the National Patent Development Strategy. According to the annual report published by the National Intellectual Property Administration, China has achieved significant progress in improving patent quality, promoting the construction of IP operating systems, strengthening administrative patent enforcement and having improved public service relating to patent information.

What are some of the most significant developments of the Patent Law (Amendments)?

Some of the most significant developments would be the increase in economic cost for patent infringement, new rules to improve the enforceability of patent rights and to promote the marketization of patented technologies; and establishment of the open licensing system to enhance the process of exploitation of the patent – all in line with China's economic strategy.

The following changes have been proposed in the draft fourth amendment to the Chinese Patent Law, published on January 4, 2019:

• The amount of statutory damages for patent infringement is increased to Rmb100,000 – Rmb5,000,000;
• New punitive damages up to 5 times the normal amount is introduced for willful infringement;
• The alleged infringer has the burden to provide financial documents relevant to the infringing act;
• The internet service providers will be liable for the infringing products sold through their online platform if they fail to take reasonable measures to stop the infringing acts;
• New open licensing system is established; and
• The protection period for design patents is extended to 15 years, while extended protection period can be given to patents for innovative drugs and patentees can apply for the patent in China and abroad simultaneously.

How will the Patent Law (Amendments) affect the ongoing trade disputes between China and the United States?

There is no doubt that the aforementioned changes introduced in the draft amendments shows China's willingness to take concrete measures to strengthen its IP protection.

China is constantly being criticized by the U.S. for "insufficient IP protection" in the ongoing trade disputes, and the stronger IP protection brought by the new Patent Law is expected to alleviate the criticism from the U.S. and reduce the chances of further disputes over IP issues.

Where do you see China in terms of IP protection in the near future? And how is China getting there?

With China's current status as the "world factory" and the expectation to become the largest economy in the world – China should aim to become the world's most important jurisdiction for IP protection in the near future.

I believe China is on track to achieve this goal, especially with the changes seen in the new patent law. For as long as China keeps advancing the pro-IP-owner policy and improve the efficiency of judicial practice for IP protection, China should be able to attract more IP owners to obtain and enforce their IP rights in China.