Decision of the Standing Committee of the National People's Congress on Amending the Patent Law of the People's Republic of China (2020)

Decision of the Standing Committee of the National People's Congress on Amending the Patent Law of the People's Republic of China (Adopted at the 22th Meeting of the Standing Committee of the Thirteenth National People's Congress on October 17, 2020) At its 22th Meeting, the Standing Committee of the Thirteenth National People's Congress decides to make the following amendments to the Patent Law of the People's Republic of China:

1.The fourth paragraph of Article 2 is revised to read: " 'Design'means, with respect to an overall or partial product, any new design of the shape, the pattern, or their combination, or the combination of the colour with shape or pattern, which is rich in an aesthetic appeal and is fit for industrial application."

2. The first paragraph of Article 6 is revised to read: "An invention-creation that is accomplished in the course of performing the duties of an employee, or mainly by using the material and technical conditions of an employer, is a service invention-creation. For a service invention-creation, the right to apply for a patent belongs to the employer. After such application is approved, the employer shall be the patentee. The employer may, in accordance with the law, dispose of the right to apply for a patent for its service invention-creation and the patent right, thereby facilitating the exploitation and utilization of the relevant invention-creation."

3. Article 14 is revised to be Article 49.

4. Article 16 is revised to be Article 15, and one paragraph is added to be the second paragraph, which reads: "The State encourages the entity that is granted a patent right to implement property right incentives, by such means as offering of stocks, options, and dividends, so that the inventor or designer can reasonably share the benefits of innovation."

5. One article is added to be Article 20, which reads: "The principle of good faith shall be followed when filing a patent application and exercising patent rights. The patent rights may not be abused to harm the public interests or the lawful rights and interests of others.

"For any misuse of patent rights for eliminating or restricting competition, if it constitutes a monopolistic conduct, it shall be dealt with in accordance with the Anti-Monopoly Law of the People's Republic of China."

6. The wording "the Patent Review Board" in the first paragraph of Article 21 is deleted.

The second paragraph is revised to read: "The patent administration department under the State Council shall strengthen the construction of a public service system for patent-related information, release patent-related information in a complete, accurate, and timely manner, provide basic data of patents, and publish patent gazettes on a regular basis, in order to promote dissemination and utilization of patent information."

7. One subparagraph is added to be the Subparagraph (1) of Article 24, which reads: "(1) where it was made public for the first time for the purpose of the public interests when a state of emergency or an extraordinary situation occurred in the country."

8. Subparagraph (5) of the first paragraph of Article 25 is revised to read: "(5) nuclear transformation methods and substances obtained by means of nuclear transformation;"

9. The second paragraph of Article 29 is revised to read: "Where, within twelve months from the date on which any applicant first filed in China a patent application for an invention or utility model, or within six months from the date on which any applicant first filed in China a patent application for a design, he or it files with the patent administration department under the State Council a patent application for the same subject matter, he or it may enjoy the right of priority."

10. Article 30 is revised to read; "If any applicant claims the right of priority for an invention patent or a utility model patent, he or it shall make a written declaration when the patent application for an invention or utility model is filed, and submit, within sixteen months from the date on which the applicant first filed the application, a copy of the patent application documents which were filed for the first time.

"If any applicant claims the right of priority for a design patent, he or it shall make a written declaration when the patent application for a design is filed, and submit, within three months, a copy of the patent application documents which were filed for the first time.

"If the applicant fails to make the written declaration or to meet the time limit for submitting the copy of the patent application documents, the claim to the right of priority shall be deemed not to have been made."

11. Article 41 is revised to read: "Where a patent applicant refuses to accept the decision of the patent administration department under the State Council on rejecting the application, the applicant may, within three months from the date of receipt of the notification, request the patent administration department under the State Council to make a reexamination. The patent administration department under the State Council shall, after reexamination, make a decision and notify the patent applicant.

"Where the patent applicant refuses to accept the decision of the reexamination of the patent administration department under the State Council, it or he may, within three months from the date of receipt of the notification, file a lawsuit in the people's court."

12. Article 42 is revised to read: "The term of patent right for inventions shall be twenty years, the term of patent right for utility models shall be ten years, and the term of patent right for designs shall be fifteen years, all commencing from the filing date.

"Where a patent right for an invention is granted after the expiration of four years from the filing date and after the expiration of three years from the date of the request for substantive examination of the application, the patent administration department under the State Council shall, at the request of the patentee, extend the term of the patent to compensate for the unreasonable delay in the granting process of the invention, except for the unreasonable delay caused by the applicant.

"In order to compensate for the time taken for the review and approval process before the marketing of a new pharmaceutical product, the patent administration department under the State Council shall, at the request of the patentee, extend the term of the new pharmaceutical-related invention which has been approved for marketing in China. The compensation term may not be more than five years, and the total effective term of the patent right may not be more than fourteen years from the date of marketing approval."

13. The wording "the Patent Review Board" in Article 45 and 46 is revised as "the patent administration department under the State Council".

14. The name of Chapter VI is revised to read: "Special License for the Exploitation of a Patent".

15. One article is added to be Article 48, which reads: "The patent administration department under the State Council and the departments in charge of patent affairs of the local people's government shall, in conjunction with the relevant departments at the same level, take measures to strengthen patent public services and promote the exploitation and utilization of patents."

16. One article is added to be Article 50, which reads: "Where the patentee voluntarily declares in writing to the patent administration department under the State Council that it or he is willing to license any entity or individual to exploit its or his patent, and specifies the payment method and the standard of the royalty, the patent administration department under the State Council shall make an announcement and implement an open license. Where the patentee submits an open license statement for its or his utility model and design, it or he shall attach an evaluation report of the patent.

"Where the patentee withdraws the open license statement, the withdrawal shall be submitted in writing and be announced by the patent administration department under the State Council. If the open license statement is withdrawn by announcement, the validity of the open license granted earlier shall not be affected."

17. One article is added to be Article 51, which reads: "Where an entity or individual notifies the patentee of its or his willing to implement an open-licensed patent in writing and pays the royalty in accordance with the announced payment method and standard for the royalty, it or he obtains the patent license.

"During the implementation period of the open license, the annual fee paid by the patentee shall be reduced or exempted accordingly.

"The patentee whose patent is under an open license may grant a general license after negotiating with the licensee on the royalty, however, the patentee may not grant an exclusive or sole license for that patent."

18. One article is added to be Article 52, which reads: "Where a dispute arises over the implementation of an open license, the parties shall resolve it through consultation. Where the parties are unwilling to consult with each other or where the consultation fails, they may either request the patent administration department under the State Council to mediate the matter, or file a lawsuit in the people's court."

19. Article 61 is revised to be Article 66, and the second paragraph is revised to read: "Where a patent infringement dispute involves a patent for a utility model or a design, the people's court or the department in charge of patent-related work may ask the patentee or any interested party to furnish a patent right evaluation report made by the patent administration department under the State Council after having conducted search, analysis and evaluation of the relevant utility model or design, and use it as evidence for hearing or dealing with the patent infringement dispute; the patentee or any interested party or the alleged infringer may also voluntarily furnish the patent right evaluation report."

20. Article 63 is revised to be Article 68, which reads: "Where any person counterfeits a patent of another person, he shall, in addition to bearing his civil liabilities in accordance with law, be ordered by the department in charge of patent enforcement to make rectifications, and the department shall make the matter known to the public. His illegal earnings shall be confiscated and, in addition, he may be imposed on a fine of not more than five times his illegal earnings. If there are no illegal earnings or the illegal earnings are less than RMB 50,000 Yuan, a fine of not more than RMB 250,000 Yuan may be imposed on him. Where the infringement constitutes a crime, he shall be investigated for his criminal responsibility in accordance with law."

21. Article 64 is revised to be Article 69, which reads: "When investigating and handling the suspected act of counterfeiting a patent, the department in charge of patent enforcement shall have the right to take the following measures based on the evidence obtained:

"(1) To inquire the parties concerned, and investigate the circumstances related to the suspected illegal act;

"(2) To carry out an on-the-spot inspection of the site where the party's suspected illegal act is committed;

"(3) To consult and duplicate the contracts, invoices, account books and other relevant materials related to the suspected illegal act;

"(4) To examine the products related to the suspected illegal act;

"(5) To seal up or detain the products proved to be produced by the counterfeited patent.

"When dealing with the patent infringement disputes at the request of the patentee or the interested party, the department in charge of patent-related work may take measures listed in Subparagraph (1), (2) and (4) of the preceding paragraph.

"When the department in charge of patent enforcement or the department in charge of patent-related work exercises its functions and powers as stipulated in the preceding two paragraphs in accordance with law, the parties concerned shall provide assistance and cooperation and shall not refuse to do so or create obstacles."

22. One article is added to be Article 70, which reads: "The patent administration department under the State Council may, at the request of the patentee or any interested party, deal with patent infringement disputes that have a major impact throughout the country.

"When dealing with patent infringement disputes at the request of the patentee or any interested party, the department in charge of patent-related work of the local people's government may deal with the cases of infringement of the same patent right within its administrative area in a combined manner; for cases infringing the same patent right across administrative areas, it may request the department in charge of patent-related work of the local people's government at a higher level to deal with the matter."

23. Article 65 is revised to be Article 71, which reads: "The amount of compensation for patent right infringement shall be determined on the basis of the actual losses suffered by the right holder as a result of the infringement or the profits earned by the infringer as a result of the infringement. Where it is difficult to determine the losses suffered by the right holder or the profits earned by the infringer, the amount shall be reasonably determined by reference to the multiple of the amount of the royalties for the patent license. For intentional infringement of a patent right, if the circumstances are serious, the amount of compensation may be determined at not less than one time and not more than five times the amount determined in accordance with the above-mentioned method.

"Where it is difficult to determine the losses suffered by the right holder, the profits earned by the infringer and the royalties for the patent license, the people's court may determine the amount of compensation, which is not less than RMB 30,000 Yuan and not more than RMB 5,000,000 Yuan, in light of such factors as the type of the patent right, the nature and the circumstances of the infringing act.

"The amount of compensation shall also include the reasonable expenses of the right holder paid for putting an end to the infringement.

"In order to determine the amount of compensation, under the circumstance that the right holder has tried its or his best to provide evidence, and the account books or materials related to the patent infringement are mainly at the hands of the infringer, the people's court may order the infringer to provide such account books or materials. Where the infringer refuses to provide the account books or materials, or provides false account books or materials, the people's court may determine the amount of compensation by reference to the right holder's claims and the evidence provided."

24. Article 66 is revised to be Article 72, which reads: "Where the patentee or any interested party has evidence to prove that another person is infringing or is about to infringe its or his patent right or hinders the realization of the right, which, unless being stopped in time, may cause irreparable damage to his lawful rights and interests, it or he may, before filing a lawsuit, apply to the people's court for adopting measures for property preservation, ordering to do certain acts or to prohibit certain acts in accordance with the law."

25. Article 67 is revised to be Article 73, which reads: "In order to stop patent infringement, in cases where the evidence might be destroyed or where it would be difficult to obtain in the future, the patentee or the interested party may, before filing a lawsuit, apply to the people's court for evidence preservation in accordance with the law."

26. Article 68 is revised to be Article 74, which reads: "The period of limitation for action against the infringement of a patent right is three years, beginning from the date on which the patentee or interested party knows or should have known of the infringing act and the infringer.

"Where an appropriate royalty is not paid for exploiting an invention during the period from the publication of the application to the grant of the patent right, the limitation period for taking legal action by the patentee for requesting the payment of royalties is three years, beginning from the date on which the patentee knows or should have known of the exploitation of his or its invention by another person. However, where the patentee knows or should have known of the exploitation of the invention before the patent right is granted, the period of limitation for action shall begin from the date when the patent right is granted."

27. One article is added to be Article 76, which reads: "In the review and approval process before the marketing of a pharmaceutical product, where the applicant for marketing approval of the pharmaceutical product has any disputes over the relevant patent right associated with the pharmaceutical product applied for registration with the relevant patentee or interested party, the party concerned may file a lawsuit before the People's Court and request a judgment on whether the technical solution related to the pharmaceutical product that is applied for registration falls within the protection scope of any pharmaceutical product patent right owned by others. The medical product regulatory department under the State Council may, within a prescribed time limit, make a decision on whether to suspend the marketing approval of the pharmaceutical product according to the effective judgment or written order of the People's Court.

"The applicant for marketing approval of the pharmaceutical product, the relevant patentee or the interested party may also petition the patent administration department under the State Council for an administrative adjudication on the disputes over the patent right associated with the drug applied for registration.

"The medical products regulatory department under the State Council shall, in conjunction with the patent administration department under the State Council, formulate specific cohesive measures for patent right dispute resolutions at the stages of pharmaceutical product marketing license approval and pharmaceutical product marketing license application, which shall be implemented after the approval of the State Council."

28. Article 72 is deleted.

29. Article 73 is revised to be Article 79, Article 74 is revised to be Article 80, and the wording "administrative sanctions" thereof is revised as "sanctions".

This Decision shall go into effect as of June 1, 2021.

The Patent Law of the People's Republic of China shall be revised and the order of the articles shall be rearranged correspondingly in accordance with this Decision, and the Law shall be promulgated anew.