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10 Things You Need to Know about Newly Amended Chinese Patent Law

1. The amended Chinese Patent Law was finally passed on October 17, 2020, and the new Chinese Patent Law will come into effect on June 1, 2021
 
2. Increased Damages

■ Punitive Damages: for intentional infringement of patent rights, if the circumstances are serious, the amount of compensation may be determined at more than one time and less than five times the amount determined according to the above method.

■ Statutory Damages: increases statutory damages from 1 million RMB to 5 million RMB (~$748 thousand USD).  Statutory damages are applied when it is difficult to determine the loss of the right holder, the benefits obtained by the infringer, and the patent license fee.

 
3. Patent Term Adjustment  

■ When four years have passed since the application date of the invention patent and the patent right for the invention has been granted for three years after the date of the request for substantive examination, the patentee may request compensation for the unreasonable delay in the granting process of the invention patent. However, the validity period of the patent shall not be extended for unreasonable delay caused by the applicant. 

■ In order to compensate for the time taken for the review and marketing approval of a drug, the patent administration department of the State Council may, at the request of the patentee, grant a period of time as compensation for new drug invention patents that have been approved for marketing in China. The compensation period shall not exceed five years, and the total effective patent right period after the new drug is marketed shall not exceed 14 years.  

■ Note that both adjustments and extensions are not automatic. The applicant must request them.

 
4. Reduced or Eliminated Annuity Fees    
■ Article 51: Any unit or individual who wishes to implement an open-licensed patent shall notify the patentee in writing and pay the license fee in accordance with the announced method and standard for the license fee in order to obtain a patent license.
■ During the implementation period of the open license, the annual patent fee paid by the patentee shall be reduced or exempted accordingly.
 
5. Design Patent
■ Increases the design patent term from 10 to 15 years
■ Allows the protection of a portion of a product design
 
6. Establishment of Patent Linkage System for Drug Patents
■ During the process of drug market review and approval, if the applicant for a drug approval has a dispute with the patentee or interested party of the patent right related to the drug, the drug-approval applicant and the patentee or an interested party of the patent right can file a complaint with the people’s court for a decision on whether the drug-related technical solutions for which the drug is to be approved falls into the scope of protection of the patent rights. Within a certain time period, the drug regulatory department under the State Council (i.e., China FDA) may, in accordance with the effective decision of the people’s court, decide on whether to suspend the approval of the relevant drug to enter into the market. 
■ Provides the option for an administrative route with the CNIPA for the drug-approval applicant and the patentee or an interested party of the patent right to resolve the drug patent dispute.
 
7. Potential Burden-of-Proof Shifting for Damages
■ To determine the amount of damages, the people’s court may order the infringer to submit the accounting books and materials that are related to the infringement if the patentee has made every effort to prove it, and the accounting books and materials are mainly in the hands of the infringer. 
 
8. Service Patents
■ The employers can handle the right to apply for patents and patent rights for their service invention-creations in accordance with the law, and promote the implementation and use of related invention-creations.
■ The state encourages employers who have been granted patent rights to implement property rights incentives, adopting methods such as stock rights, options, and dividends, so that inventors or designers can reasonably share the benefits of innovation.
 
9. More Time to Submit Patent Priority Documents 
■ When an applicant claims priority for a patent for an invention or utility model, it shall submit a written statement at the time of application, and within 16 months from the date of filing the first application for a patent for the invention or utility model, submit the first copy of the patent application documents. 
■ This applies to a patent for an invention or utility model, not a design patent.
 
10. Patent Evaluation Report 
■ If a dispute over patent infringement involves a utility model patent or a design patent, the people’s court or the administration department for patent-related work may require the patentee or the interested parties to prepare and present a patent evaluation report.
■ The patent rights holder or interested party or the accused infringer may also take the initiative to request a patent evaluation report.