Amendments to enable more protection for rights holders, tougher penalties for infringers

China's amended Patent Law, after its fourth revision, is scheduled to come into force on June 1, 2021, and will provide rights owners with stronger protection, experts said.

Partial designs have been added to the law's protection portfolio. That means improvements to part of a product, such as shoe soles, cup handles, mouse wheels and cellphone screens, will be able to be protected as industrial design patents.

The move brings the law in line with international practices, as partial designs are already under protection in the United States, Japan and the European Union.

Industrial designs, as one of three patent types in China, each have a 10-year protection term, but the period will be expanded to 15 years after the new law comes into effect.

The changes are a key approach to intellectual property protection and can better balance the interests of rights holders and those of the public, said an official with the National Intellectual Property Administration.

In the Hague Agreement Concerning the International Registration of Industrial Designs, the duration of protection is also 15 years. So the revision that agrees with the Hague agreement will prepare Chinese companies better for their overseas ventures, the official said.

China has not joined the Hague agreement yet. The consistency in the duration of protection is conducive to the country's further decision on the widely recognized international registration system for industrial designs.

The country is a member of the Madrid system for international trademark registration and the Patent Cooperation Treaty for international patent filings, both governed by the International Intellectual Property Organization.

The law has also introduced patent term extension, which is particularly significant to the pharmaceutical industry, experts said.

Generally, a patent expires after 20 years. However, for new drugs to be patented, it takes much longer time to be granted, as they involve rounds of tests and assessments.

The amendment will provide compensation to pharmaceutical patentees who face duration shrinkage even after their filings have been granted, because a patent term starts from when the application is filed.

However, the extension cannot exceed five years, and after a drug is put on the market, its patent duration cannot go further than 14 years, according to the new law.

"Drug developers invest heavily in research, so this sector needs enhanced protection," said Song Jianhua, head of the treaty and law division of NIPA. "Only if sustained innovation is guaranteed can we have a continuous supply of safe and effective medicines."

China has an accumulative inventory of more than 1.86 million invention patents. The reservoir of rich innovation resources has yet to be fully tapped, as some of them exist without being commercialized or industrialized.

To address the issue, an open licensing arrangement has been added to the revised law to encourage rights owners to open their patents to licensees and promote commercialization, Song said. 

During the open licensing period, the patentee will enjoy reductions in annual patent maintenance fees, according to the law.

The amendments to the law also include an increase in statutory damages, from 10,000 to 1 million yuan ($1,490 to $148,950) to 30,000 to 5 million yuan, and punitive damages for severe infringements, amounting to up to five times the infringers' benefits or patentees' losses.

"It shows China's resolution to strictly protect IP and make infringers pay a heavy price," said Wang Ruihe, an official from the National People Congress Standing Committee's Legislative Affairs Commission.

After it first took effect in 1985, the Patent Law has since been revised four times in 1992, 2000, 2008 and 2020, with the latest round starting in 2014.

(Source: China Daily)