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Noteworthy Points of China's New Patent Law 2021

Peter (Baoyu) ZHANG
Partner  Patent Attorney

The new Chinese patent law will come into effect on June 1, 2021. This amendment involves many aspects, such as introduction of partial design, service invention, distribution of patent monetization, abuse of patent rights, patent term extension, voluntary licensing of patent rights, administrative enforcement, increase in statutory compensation, and patent linkage system.

Among these changes, I think some are noteworthy. Let me introduce them as follows.

First, regarding the industrial design, the partial design system is introduced into the new law. When it comes into effect the next year, the applicant does not have to change the dotted lines in the priority design to solid lines when filing in China. This amendment will cause major changes in the design patents enforcement. Apart from the newly introduced partial design system, the protection period of design patent is also extended to 15 years in order to join the Hague Agreement. And the domestic priority system of design patent is added as well.

Next, regarding patent term compensation/ extension, there are two aspects that should be noted:

-a. If the patent is granted 4 years after the application date and 3 years after the request for substantive examination, and the delay is unduly caused by CNIPA, the patent protection period may be compensated as per the request of the patentee.

-b. Another aspect is about the protection term compensation for the patent of new drug approved for marketing in China. CNIPA may provide compensation for a period of time based on the request of the patentee. The compensation period shall not exceed 5 years, and the total effective patent right period of the new drug after compensation shall not exceed 14 years.

Then, regarding China's drug linkage system, this article in the new law is for the marketing of generic drugs, it says that in the process of drug marketing review and approval, if a dispute arises due to the patent rights related to the drug applied for registration, the relevant parties can sue before the court to request a judgment on whether the drug-related technical solution infringes the patent rights. The drug regulatory authority may, within a time limit, make a decision on whether to suspend the approval of the marketing of the related drugs based on the effective judgment of the court. The detailed implementation rules are being formulated and will be released soon.

Finally, regarding patent right enforcement, there are 3 noteworthy points as follows:

-a. Transfer of burden of proof: In order to determine the amount of compensation, the court may order the infringer to provide the account books and documents related to the infringement when the patentee has tried its best to provide evidence and the account books and the related information are mainly in the hands of the infringer.

If the infringer does not provide or provides false account books or information, the court may refer to the claims and evidence provided by the patentee to determine the amount of compensation.

-b. Those who counterfeit patents can be fined less than five times the illegal income; If there is no illegal income or the illegal income is less than 50,000 yuan, a fine of less than 250,000 yuan can be imposed; If a crime is constituted, criminal responsibility shall be investigated according to law.

-c. The maximum amount of statutory compensation is increased. We know that if it is difficult to determine the specific damage based on evidence, the judge can determine statutory compensation. The compensation could be more than 30,000 yuan and less than 5 million yuan.

The above are the most noteworthy points about the China’s new patent law in my opinion. Please feel free to contact me if you have any questions.

And one more thing, since the implementation rules of the new patent law and the transition method between the new and the old law has not been announced, how the old law will connect and transit to the new law is still unknown. We will pay close attention and keep you updated.

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