The State Intellectual Property Office has proposed to modify the China Patent Law and issued a draft soliciting public comment on April 1, 2015. The deadline for submitting comments is April 30, 2015 and by that time, the SIPO will submit the draft to the National Congress Standing Committee to consider.
Now let’s look at the major changes to the Patent Law from the perspective of the SIPO.
New Service Invention Definition and Regulation
The proposed draft seems to tip the balance towards the inventor. In the current Patent Law, the technology, invented by an inventor employee who majorly harnesses his employer’s resources, belongs to the employer. In the proposed draft, the inventor employee can negotiate with the employer and the technology resulted from harnessing majorly employer’s resources belongs to the employee in default.
Also, in the draft, if the service invention has been applied for patent, the employer should compensate the employee. The SIPO generally codified the provisions of the current Implementing Regulation of China Patent Law.
Patent Owner Cannot Commit Monopoly Unreasonably
In light of the Qualcomm case, the new proposed draft commands that the patent must conduct its business in bone fide fashion and cannot use its patent to monopolize the market unreasonably. It is highly likely in the near future the government will enforce compulsory license for public interest and social benefit.
The Patent Reexamination Board Can Review Patent on Other Grounds not Asserted by Invalidation Petitioner
The Patent Reexamination Board (PRB), when reviewing the invalidation request, if necessary, can voluntarily review the patent in question for other reasons not asserted by the invalidation petitioner and check whether the patent complies with other rules under the China Patent Law. This might give much power to the PRB, and is very unlikely to pass in the official draft.
Defendant Should Voluntarily Submit Accounting Book in Litigation
The proposed draft requests the defendant in infringement litigation to submit accounting books relating to the infringing goods if the plaintiff cannot produce evidence of damages and the accounting books are in the defendant’s hands. This will shake some burden of the plaintiff to prove damages.
Administrative Measures are More Tougher
Not only the cap of administrative penalties is lifted from RMB 200,000 to 250,000, but the Administrative Organs, meaning the provincial or prefecture offices of SIPO can order to destroy the molds and machines, and confiscate infringing goods. This proposed change will greatly enhance the efficiency of administrative enforcement.
Statutory Damages can be Multiplied
Currently the statutory damages are capped at RMB 1,000,000. The proposed draft allows the judges to multiply the statutory amount up to three times considering the extent of infringing activities, which means the statutory damages can be as high as RMB 3,000,000.
New Rules on Internet Secondary Infringer
Under the proposed draft, if an internet service provider, such as e-commerce platform, knows or should have known the existence of patent infringement and does not take any remedial actions such as removing infringing content in time, such internet service provider will be jointly liable for patent infringement.
If the internet service provider does not know the infringement but does not take action in time after being notified, such internet service provider will be liable for any increased loss suffered by the patent holder.
New License Program administered by SIPO
If a patent holder wishes to license the patent to the public and specifies the license fee, the patent holder may send a notice of the announcement to the SIPO. Any individual or company who wants to practice the patent may need to serve a notice to the SIPO and pay the license fee according to the announcement.
Conclusion
The proposed draft introduces many new features, but other contents have not been modified dramatically. We will need to wait for the final draft and see if any major changes will take place later.
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