Changing the law in any country is rarely a speedy process and China is no exception. After significant debate and multiple drafts circulated over a three-year period, the legislative body of China recently adopted an amendment to the Patent Law.
First enacted in 1984, the Patent Law was previously amended in 1992 and 2001. This "Third Amendment" will become effective on October 1, 2009.
It is another step taken by the PRC to further harmonize its patent laws with the rest of the world. Foreign companies doing business in the PRC should be aware of the various changes brought into effect by the Third Amendment, including a change to the novelty standard, restrictions on inventions based on genetic resources, and a streamlining of enforcement.
The Third Amendment has a new "novelty standard". That is the invention must be different from so-called "existing technology" anywhere in the world.
Another major change introduced by the Third Amendment relates to inventions involving genetic resources. The Third Amendment explicitly prohibits the granting of a patent for any invention relying on unlawful use or acquisition of genetic resources.
Any foreign parties carrying on research and development in the PRC should be aware of a new clearance requirement for patent applications in the Third Amendment. The current Patent Law requires that patent applications for inventions developed in the PRC first be filed in the PRC. The Third Amendment replaces this first-filing requirement with a new clearance procedure. The clearance process requires any entity or individual interested in filing a foreign patent application for inventions "completed" in the PRC to apply to SIPO for clearance on a confidential basis prior to any foreign filing. Failure to comply with this new clearance requirement will cause the loss of patent rights for the invention in the PRC. This is very important and needs to be clearly understood. If it invented in China it has to be registered there first.
The Third Amendment also attempts to strengthen patent enforcement in the PRC. Unlike Canada, the PRC has a dual-track system for litigating patent infringement; one is administrative, the other judicial. The Third Amendment prescribes new limits on statutory damages for patent infringement in both administrative and judicial proceedings.
Where the infringer did not profit from the infringement, the maximum fine has increased from RMB50,000 to RMB200,000. The maximum statutory damages that may be granted by a court is RMB1,000,000.
There is much more and Mondaq has a very complete article on this important subject.