Draft changes to the Patent Law under public consultation

The Patent Law is undergoing its third revision to date. On August 29 2008 the Standing Committee of the People’s Congress published the draft Patent Law Amendments for public consultation. The draft makes significant changes to the current Patent Law – this article looks at some of the key proposals.

Absolute novelty standard
An invention or utility model lacks novelty if it has been disclosed either: 

• anywhere in the world through publication; or 
• in China through public use or other means.

To bring China into line with patent practice worldwide, the draft adopts the absolute novelty standard such that novelty is lost if the invention or utility model forms part of the prior art, which should be interpreted to include matters previously used outside China.

Higher patentability threshold for design patents
Although the number of design patent applications is huge, a high percentage of these have a low standard of novelty. To improve the situation, the draft requires features of a design patent to be significantly different from those of prior designs, and not simply “not identical or similar” as is currently the case. Furthermore, no patent shall be granted for two-dimensional printed matter designs made up of patterns or colours, or a combination of these, if they are primarily for identification purposes.

Foreign applications
For inventions accomplished in China it will no longer be mandatory for Chinese applicants to file applications in China first. However, a prior security examination conducted by the Chinese Patent Office is required.

Disclosure of genetic resources
To protect the rich biological and genetic resources of China, and in accordance with the relevant provisions of the Convention on Biological Diversity, the draft requires the origin of a genetic resource to be disclosed in the specification if the invention was created by relying on that genetic resource.

Compulsory licences
The draft provides three new circumstances in which a compulsory licence may be granted: 

• where the exploitation of patents is seen to be an act restraining competition; 
• for pharmaceutical patents for export to countries in need; and 
• under certain conditions, for semi-conductor-related patents.

Prior art defence
The draft explicitly allows for the prior art defence in court, although certain local courts have already adopted this practice. In those courts which have not yet adopted the practice, a defendant must first invalidate the patent at the Patent Re-examination Bureau and then submit this decision to the court as a defence. However, there is no guarantee that the court will stay the proceedings.

Heavier penalties for patent infringement
The draft increases the penalties for the act of forging a patent or counterfeiting a patented product. Furthermore, it increases the statutory damages for patent infringement from a maximum of Rmb500,000 (according to the Supreme Court’s judicial interpretation) to Rmb1 million.

Exemption from patent infringement
The draft provides that it is not an infringement to make, use or import a patented pharmaceutical or medical device solely for acquiring information necessary for regulatory approval.

New design provisions
The draft also provides as follows in regard to designs: 

• A brief description of the design features is now compulsory rather than optional; 
• One design application may now be made for multiple similar designs for the same product; 
• An offer for sale is now also deemed to be an act of infringement; and 
• A search report must now be provided in order to enforce a design patent.

Implementation
The new Patent Law is due to be passed in early 2009.