Highlights of the Fourth Amendment to China’s Patent Law (Effective as of 2021.6)

Partial Design Patentable & Design Protection Term Extended

Design patent witnesses two crucial revisions in the newly amended China Patent Law, which will significantly impact on the design patent prosecution and protection as of 1 June 2021, the effective date of the new rules. Please be advised of the following changes:

Partial design patentable

Partial design is allowable now pursuant to the new rules. As of 1 June 2021, IP owners can file design patent applications for protecting their partial designs. This is a great development of Chinese IP system. We look forward to a new protection environment of design patents.

Design patent term extended to 15 years

For design patents filed on or after 1 June 2021, the patent term will be extended from 10 years to 15 years from the filing date. This is a signal that China is under the preparation for joining the Hague Agreement, an international treaty that streamlines global design patent applications but requires a 15-year patent term.
 

Intensified Compensation for Infringement
Compensations for infringement have seen major changes in four aspects: calculation of the compensation, punitive compensation, statutory compensation and burden of proof.

Calculation
Calculation based on the actual loss of the patentee caused by the infringement and that based on the profits the infringer has earned because of the infringement are now equally preferred for compensation quantification. Where these two ways of calculation are difficult to apply, the compensation shall be reasonably determined with reference to the multiple of the exploitation fee of that patent under a license.

Punitive Compensation
For serious intentional infringement, punitive compensation is introduced: the amount of compensation ranges from one to five times the amount of losses suffered by patent holders, profits earned by infringers or the multiple of the exploitation fee. The introduction of punitive compensation means serious intentional infringement will be imposed a tougher penalty.

Statutory compensation
Statutory compensation will still be issued as compensation where preferred calculations are not viable for lack of evidence. The minimum limit of statuary compensation increases from RMB 10,000 to RMB 30,000 (approx. USD 4,500) and the maximum limit from RMB 1 million to RMB 5 million (approx. USD 760,000).

Burden of proof
Another modification is spoliation of evidence on the infringer’s side being taken into consideration. In patent infringement, generally the right holder shall bear the burden of proof and shall endeavor to present evidence. On such a basis, the revised Law provides that where accounts and materials in relation to the infringing act are mainly in control of the infringer, the court may order the infringer to provide the accounts and materials; where the infringer does not provide the evidence or provide false accounts and materials, the court may quantify the compensation amount considering the right holder’s claim and evidence provided. Therefore, the burden of proof on the plaintiff is to some extent alleviated.
 
Patent Term Compensation System
The newly revised Patent Law launches protection term compensation system for invention patent which stipulates protection term adjustment for loss of term caused by patent examination and drug patent term extension for delays caused by regulatory review and approval.

Patent term adjustment
Patent term will be adjusted to compensate for the unreasonable delays because of patent examination conducted by the patent administration department where the invention patent is granted later than four years after filing and three years after the date of request for substantive examination. Term loss caused by delays on the side of the applicant will not be compensated. This amendment requires a higher efficiency in patent examination, which may benefit inventions with a short product life cycle.

Drug patent term extension
The patent relating to a new drug approved for marketing in China may be granted a maximum five-year patent term extension by the patent administration department as a compensation for the time taken by regulatory review and approval; and the total effective patent term after the drug is approved for market launch shall not exceed 14 years. While their scope, in particular the definition of “new drugs” remains to be clarified, these provisions embody enhanced protection for original drugs, whose regulatory review and approval can take far longer time than generic drugs.

Applicability
It should be noted that both the adjustment and supplement are granted only in the request of the patentee. Meanwhile, for drug patent, the adjustment and the supplement should be simultaneously applicable for they are directed to different procedural delays but it remains to be specified by further regulations and interpretations.
 
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Who are we                              
AFD China Intellectual Property Law Office offers one-stop intellectual property and legal services of efficiency and quality. Our practices cover patents, trademarks, copyrights, domain names, new plant varieties, technical secrets and other IP-related matters. We have established mature IP management and monitoring systems and have assisted a wide range of clients in fulfilling IP fling, prosecution, protection and IP rights enforcement. Our strategic planning and search capacities including early warning analysis, validity analysis, and infringement risk analysis receive recognition from our clients. We also provide dispute resolution solutions, contract drafting and negotiations services and act in administrative actions and litigation proceedings related to intellectual property.

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