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¡ªThe Introduction to the Second Revision of the Chinese
Patent Law State Intellectual Property Office September 1 2000 |
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The Chinese
Patent Law was formally implemented on April 1, 1985.
It conforms to China¡¯s actual situation and started at a very high
point since the very beginning.
The Amendment of Chinese Patent Law, which was adopted in 1992,
expanded the technical fields protected by patent, prolonged the duration
of three kinds of patents and made our patent protection basically in
conformity with the regulations of TRIPS agreement.
In review of past work, the practice over the last decade since
the implementation of Chinese Patent Law proves that patent legislation
has played a great role in safeguarding and promoting the development
of China¡¯s intellectual property course. Facing the 21st
century with knowledge-based economy as its core, the development of science
and technology and economy in China is on a turning point. The adjustment and optimization of the
structure of production has become the subject of economy development. China¡¯s accession to WTO is impending
which will put in more intensive competition. The 17th Session of the Standing Committee of the
Ninth National People¡¯s Congress adopted the second revision of the Chinese
Patent Law on August, 25 2000, for the purpose of giving full play to
the important role of patent and intellectual property system in technology
innovation and science and technology improvement, and of implementing
¡°Decision on Strengthening Technology Innovation, Developing High Technology
and Realizing Industrialization¡± issued by the Central Committee of the
Communist Party of China and State Council. With this revision, practical experiences and achievement of
legislation are absorbed, resulted in the deepening reform of economy
mechanism. Patent protection
is strengthened, the procedure for patent examination and granting is
simplified and the related provisions of the Chinese Patent Law are further
adjusted and improved according to TRIPS.
The revised patent law will enter into force on July 1, 2001. The revision gives full expression
to the purpose of the legislation ¡°On the basis of practical situation,
ruling the rights and obligations of citizens, legal persons and other
organizations, ruling the rights and responsibilities of governmental
entities scientifically and rationally¡±.
On the basis of meetings and letters soliciting opinions and to
the spirit of rule by law, ideas from various departments under the State
Council, the People¡¯s Courts, local governments, local patent authorities,
patent agencies, experts and scholars are also collected. During the revision, Education, Science, Culture and Health
Committee of National People¡¯s Congress, Legal Affairs Office of the State
Council and the State Intellectual Property Office have co-organized 5
investigation groups and visited the grass-roots units to investigate
the status of patent protection and the main issues in the administrative
enforcement, laying the a foundation for the amendment of the Law. About 35 articles were revised, mainly
including: 1.
Make clear that the patent legislation aims at promoting the development
and innovation of science and technology and creating better conditions
for deepening reform 2.
Strengthen patent protection and improve judicial and administrative enforcement 3.
Simplify and improve procedures of patent examination and grant and right
maintaining the legal interests of the interested parties 4.
Opening up, embracing accession to WTO, and accord with TRIPS 5.
Building a diligent, impartial, practical and efficient patent examination
and administration workforce In order to implement ¡°Decision
on Strengthening Technology Innovation, Developing High Technology and
Realizing Industrialization¡± issued by the Central Committee of the Communist
Party and State Council and to embody the patent work into technology
innovation mechanism, the revised law changed Article 1, the purpose of
the law, from ¡°promote the development of science and technology¡± into
¡°promote the development of science and technology and innovation.¡± This requires us better handling the relations
between patent and technology innovation, establishing and strengthening
the main status of enterprise in technology innovation, and helping them,
by obtaining patents, to become those with their own intellectual property
rights and strong competitive high and new technology. We should also provide guidance to and
help enterprises to establish and improve their patent administration
and patent protection system, and solve the basic problems like poor ability
of enterprises in technology innovation.
In accordance with this, the Patent Law is also revised as follows:
1.
Delete regulations
on ¡°holding¡± the patent right by an entity under ownership by the whole
people. Absorbing the achievements
in respect of promoting the reform of state-owned enterprises and establishing
modern enterprise mechanism in recent years and assuring the main status
of public-owned economy and the common development of non public-owned
economy, the revision deletes those restrictive provisions that the patent
rights be classified as holding and owning according to the nature of
the entities, that state-owned entities who hold the patent right do not
have the complete handling right to the patented invention, and that any
assignment by such entities, of the right to apply for a patent or of
the patent right, they must be approved by the competent authority at
the higher level. According to the new Patent Law, the state-owned
entities, which as the main body of market economy competition, enjoy
the same treatment as non state-owned entities as far as the rights and
obligations relating to filing and obtaining patent. In the eve of China¡¯s accession to WTO, such revision has a
special important meaning to the Chinese state-owned enterprises and entities
ready to participate in the international competition. In conformity with the spirit
of this revision, Articles relating to inventions made cooperatively (Article
8), assignment of right to apply for a patent or patent right (Article
10), license of plan (Article 14) were also amended accordingly. 2.
The definition of
service invention is more rational and this is in advantage of further
encouraging scientists and technicians in technology innovation. The patent law grants patent
as a reward to the entities and individuals that created inventions and
thus encourage the inventions-creations.
The Chinese Patent Law of 1984 prescribed two conditions for the
definition of service invention: one is the invention-creation made by
a person in execution of the tasks of the entity to which he belongs,
the second is made by him mainly by using the material means of the entity. The material means of the entity he belongs
to refers to the funds, facilities, spare parts, raw materials or other
non-public technology documents.
Based on the practice of implementing the Chinese Patent Law in
the past 15 years and in adaptation to the administration mechanism reform
of science and technology planed project and especially the needs of implementation
of project mechanism, Article 6 of the revised patent law adopted contract
priority rule, allowing the employees and the entity they belong to regulate
the ownership of inventions-creations through contract. This means that according to the revised patent law, inventions-creations
made by a person mainly by using the material means of the entity would
be regarded as non-service invention, if on the condition that the inventor
returns the funds or pays fee to the entity according to the contract.
This revision is in advantage of motivating the scientists and
technicians in facing the market, self-raising funds, and establishing
the subject according to the market needs and is beneficial to the full
use of entity¡¯s free materials such as facilities. 3.
Define that the
service inventor should be remunerated and awarded Article 16 of the Chinese Patent
Law of 1984 prescribes that the entity shall award the service inventor
respectively after the granting of patent right and its exploitation. According to the revision, upon exploitation
of the patented invention-creation, the entity shall remunerate the inventor
or creator based on the extent of spreading and application and the economic
benefits yielded. The change
from the award into remuneration is not only in advantage of motivating
the technicians to create inventions-creations, but also beneficial to
the implementation of inventions-creations made by them.
This is because that their interests are connected with the implementation
of invention-creation. For
the entity, this article is more compulsory and easier to operate and
thus be more beneficial to encourage inventions-creations. II.
Strengthen patent
protection and improve judicial and administrative enforcement China has established and is
improving continuously its patent protection system in an unprecedented
speed. It has primarily reached
the level of ¡°there are laws to abide by¡± in respect of patent protection. However, in order to realize full protection
for patentees, and to ¡°ensure that the laws are strictly observed, laws
are fully enforced, violations of the law must be investigated and dealt
with¡±, the public awareness of law has to be commonly increased and the
public must be made to observe the law self-consciously. Besides, to further strengthen the jurisdiction and administrative
enforcement for dealing with patent disputes and provide more severe punishment
to patent infringement or passing off of other people¡¯s patent have become
the key issue to further develop the Chinese patent system. This revision not only strengthens the
protection and adds regulations relating to offering for sale, which is
for the purpose of being in accordance with TRIPS, but also improves the
jurisdiction and administrative enforcement in various aspects, and therefore
the protection level is enhanced.
1.
The provision regarding offering for sale is added
In line with the
TRIPS Agreement, patents are divided into two types: product and process
patents. The patentee is conferred on the exclusive right, where the subject
matter of his patent is a product, to prohibit third parties from the
acts of producing, using, offering for sale and importing his product.
Where the subject matter of a patentee's patent is a process, he is entitled
to prohibit third parties from the acts of using the process and from
the acts of producing, offering for sale, selling, using the process and
importing products obtained directly by that process. The only difference
in this regard between the Chinese patent law and the TRIPS is that no
provision regarding offering for sale is stipulated in that law. This
provision provides that the patent holder is entitled to prohibit third
parties from marketing or advertising products before sale, and thus may
dispel any infringing act at its initial stage. In order to intensify
protection and keep in further conformity with TRIPS, the law is amended
by such adding. 2.
The provision to prohibit "legitimate use"
of illegal products According to the previous Article
62 of the patent law, where third parties use or sell in goodwill products
infringing a patent, their acts are exceptions to infringement. Although
this provision is reasonable to some extent, yet infringers may take advantage
for using legitimately their illegal products. Thus it is not in line
with international practice. After revision, on one hand, the provision
provides that the acts of use by third parties in goodwill, offering for
sale and selling infringing products are all infringement, while on the
other hand, it also provides on a reasonable basis, where third parties
can prove that products are obtained from legitimate channels of distribution,
they shall not be responsible for damages. As a result, the revised Article
shall prohibit, to some extent, infringers from marketing or selling infringing
products by misusing the previous prescription, and shall prohibit anyone, who knows or should know with full reason the product
is an infringing one, from any business operations. The protection of patent is thus intensified. 3. Provisional measures before legal proceedings are adopted The Article 41 of the TRIPS Agreement provides that
enforcement procedures should be available for effective action against
any act of infringement, including expeditious remedies to prevent infringements.
The Agreement further provides that under the following circumstances,
provisional measures should be adopted: (a)
to prevent
an infringement from occurring, and to prevent the entry into the channels
of commerce in their jurisdiction of goods, including imported goods immediately
after customs clearance; (b)
to preserve
relevant evidence in regard to the alleged infringement. Actually there were such no provisional measures before instituting
legal proceedings in Chinese patent enforcement procedures. However, for effectively protecting patent right
and for keeping in line with TRIPS, the revised Article 61 provides, where
a patentee or any interested party who can provide any reasonable evidence that his right
is being infringed on that such infringement is imminent, and any delay to stop acts is likely to
cause irreparable harm to his or its legitimate rights, he or it may, before instituting legal
proceedings, request the people's court to order the suspension of related
acts and to provide property preservation. 4. A new provision on calculation of damages is added Compensation for damages in patent infringement is one of the main civil liabilities for a patent
infringer to bear. The amount of damages paid to the right holder should
be fair and adequate to compensate for the holder's actual losses caused
by infringement of his rights. Therefore,
the Article 60 in the revised law provides explicitly that the amount
of damages for infringing a patent right shall be calculated according
to the losses suffered by the patentee or the profits gained by the infringer
out of the infringement. If it is too difficult to determine the damages
based on such losses of the patentee or the profits of the infringer,
the appropriate times of the royalties for licenses for the said patent
may be applied mutatis mutandis. 5.
Clarify the function of the people¡¯s governments of provinces, autonomous
administrative regions and municipalities directly under the central government
in administrating patent work. Since the establishment of
the Chinese patent system, China has attached great importance on the
establishment and development of local patent administrative working system,
trained a team of backbones in the field of patent administration, and
done effective work in many fields such as promoting patent enforcement
and developing patent cause. For the purpose of giving full play to the
function of the local patent administrations and strengthening the work
of patent administrative management and enforcement, Article 3 in the
revised Patent Law is added ¡°The authorities for patent work under the
people's governments of provinces, autonomous regions and municipalities
directly under the Central Government are responsible for the patent administration
work of their own administrative areas.¡± clarifying the function of the
people¡¯s governments of provinces, autonomous administrative regions and
municipalities directly under the Central Government in administrating
patent work. The local patent administrations should not let the nation
and the people down and make new achievements in establishing a patent
administrative and protection system catering for the development of Chinese
patent system. 6. Take advantage of administrative
enforcement and straighten out the relationships in handling patent infringement
disputes and administrative enforcement From 1984 when patent system was established
in China, we adopted
the mode of ¡°two channels,
work together,¡±i.e. judiciary
and administrative channels operating simultaneously, for the protection
of patent right. This method
is proved by practice not only suitable for China's national situation
and effective, but also in line with the pertaining provisions of the
World Trade Organization. This
revised law straightens out the relationship between the jurisdiction
of patent authorities over patent infringement and their functions for
maintaining fair order for competition. Firstly, the Article 57 in the revised patent law
provides explicitly that the local patent administrative authorities shall
have the right to determine whether an act is infringement or not. If
the infringement is well found, the authorities have the power to order
the infringer to stop infringement acts immediately. In case the party
concerned is not satisfied with the decision, he or it may institute legal
proceedings in the people's court, according to the Administrative Procedure
Law. If such proceedings are not instituted within the time limit and
if the order is not complied with, the authorities for patent work may
approach the people's court for compulsory execution. The administrative
enforcement channel is characterized with "Simple Procedures, Speedy
Settlement and High Efficiency" because once infringement act is
well found, the authorities can immediately order to stop that act. Thus,
this is a well-received enforcement channel that provides patentees with
most rapid and efficient protection. However, as for damages, the revised
provision concerned also provides explicitly that the authorities for
patent work will mediate, only upon the request from parties concerned,
on damages and will not make any order. If mediation does not work, parties
concerned can institute legal proceedings with the people's court according
to the Administrative Procedure Law. Secondly, in order to cope with common phenomenon
of group infringement and repeated infringement as well as the increasing
complexity of infringement and difficulty in settling infringement disputes,
it is necessary to make available administrative enforcement channel as
a supplement to judicial enforcement. Due to that need, the Article 58 and 59 in the revised law enhance the functions of patent
administrative authorities for maintaining market order. For instance,
in Article 58, it provides
that patent administrative authorities have the power to investigate and
handle acts of passing off others' patent, to order the offender to amend
his acts, to announce such orders and to confiscate illegal income and
impose a fine on the offender. According to the patent law before revised, where the acts of an offender,
who passes off others' patent, does not constitute a crime, he shall be
penalized only in line with the provision regarding penalties on patent
infringement, even though he violates the law willfully and harasses the
legal order. The Article 59 entrusts patent
authorities with the power to investigate and handle acts of passing off
patented products and process, to order amendment of errors and make it
public, and to confiscate illegal profits and impose fines on offenders. 7. Safeguard interests of the
public and prevent the abuse of patent rights by right holders Because the patent administrative
organ under the State Council grants patent right for utility model without
substantive examination, in order to safeguard the legitimate right and
interest of the public and prevent the abuse of utility model patent rights
by right holders whose conduct might hinder others¡¯ normal production
and marketing activities, Article 57 of the revised Patent Law provides
that where the infringement dispute is related to utility model, the people's
court or the administrative authority for patent affairs may request the
applicant to furnish search reports made by the patent administrative
organ under the State Council.
III
Simplify and improve procedure of patent examination and grant, and right
maintaining, safeguard the legal interests of interested parties Procedures for acquisition
and maintenance of patent right shall be fair and equitable. They shall not be unnecessarily complicated
or costly, or entail unreasonable time limits or unwarranted delays.
This is one of the general obligations in the part of enforcement
of intellectual property rights of TRIPS and also the starting mark for
our patent legislation. Based on years of our practice, in no
small part, this version of revision fixes procedures for examination
and maintenance of right to optimize procedures, preserve resources and
reduce litigations. 1.
Define legal basis
of PCT international applications The nature of the
Patent Cooperation Treaty (PCT) is to facilitate applicants to apply for
patent in multiple countries by using a universal application standard. China became bound by the Patent Cooperation
Treaty (PCT) on January 1,1994. The State Intellectual Property Office
(SIPO), as the Receiving Office of PCT, became the International Searching
Authority (ISA) and the International Preliminary Examination Authority
(IPEA) at the same time. In
order to facilitate applicants to apply for patent via the PCT route and
protect their legitimate rights and interests, and to explicitly confirm
the legal basis allowing the patent administrative organ to fulfill the
international obligations, Article 20 of the revised law makes general
provisions on this. 2. Abandon revocation procedure
and streamline the work flow When the Law was amended in
1992, the opposition procedure prior to grant was cancelled and substituted
by the revocation procedure post grant.
The latter procedure was expected to facilitate the public to disclose
apparent mistakes made by the Patent Office in grant and enable the Office
to correct them via administrative procedure in time. But the overlapping of this procedure and the invalidation
procedure causes rather long flow.
In some actual cases, the revocation procedure was abused to prevent
the right holder to use the invalidation procedure to protect his legal
right and interest. In order
to streamline the flow and reduce the unnecessary red tapes bothering
interested parties, revocation is abandoned in this amendment. 3.The final decision in
reexamination and invalidation of utility model and design is made by
the court. Article 32 of the TRIPS reads:
"An opportunity for judiciary review of any decision to revoke or
forfeit a patent shall be available." Constrained by the historical conditions, the 1984 patent law
stipulated that the decision of the Patent Reexamination Board for invalidation
of right and reexamination concerning a utility model or design is final.
In order to sufficiently protect the legal right and interest of
the interested parties and accord the Patent Law with the requirements
of the TRIPS, the amendment stipulates that the final decision of validation
of right and declaration of invalidation of any application for patent
for utility model and design shall be made by the people's court.
4. Simplify formalities
for assignment of patent right and filing patent application in foreign
countries Pursuant to the spirit of the
organizational restructuring of the State Council, an administrative organ
shall change its functions, and in principle, shall not interfere interested
parties to accomplish their civil rights.
Therefore, revisions were made. First, an assignment of the right to apply
for a patent or the patent right will come into force upon the date of
registration instead of upon the date of the announcement of the assignment.
Second, the provision in Article 20 in the active law says that
where any Chinese entity or individual intends to file an application
in a foreign country for a patent for invention-creation made in the country,
it and, with the consent of the competent department concerned of the
State Council is canceled. It is to facilitate for the Chinese applicants
to apply for patents in foreign countries and eventually effectively to
protect themselves. Certainly, where an invention-creation for which a patent is
applied relates to the security or other vital interests of the State
and is required to be kept secret, the application shall be related in
accordance with the relevant prescriptions of the State£® 5. Other amendments concerning
examination procedure In order to improve the examination
and right maintaining procedure and protect the legal right and interests
of the interested party, the provisions such as patentability of design
(Article 23), furnishing of documents concerning any search made for the
purpose of examining that application or concerning the results of any
examination made in a foreign country (Article 36), the date that patent
right comes into force (Article 39 and 40), third party's participation
in the proceedings of invalidation procedure (Article 46) and the prescription
of legal proceedings (Article 62) are also either revised or adjusted. IV. Opening up, embracing
accession to WTO, and accord with TRIPS WTO requested all the potential
signatory members to review the compatibility of their domestic laws with
its regulations. In terms
of intellectual property protection, our intellectual property laws shall
be compared with the TRIPS. Therefore,
although our patent law was revised in 1992 for the first time, resulting
in major provisions' compatibility with the TRIPS, to strengthen the awareness
of intellectual property, especially patent, and build up a healthy social
environment for the production and promotion of inventions, the amended
law is added with the following provisions based on the TRIPS requirements. 1.
Patent owners shall have the right to prevent third parties not having
the owners' consent from the act of offering for sale. 2.
The final decision of reexamination and invalidation of any application
for patent and patent right for utility model and design shall be made
by the people's court. 3.
In order to stop the acts that is likely to cause irreparable harm to
his or its legitimate rights, a patent owner may, before instituting legal
proceedings, request the people's court to order the suspension of related
acts and to provide property preservation. 4.
Conditions for compulsory license for exploitation of patent are improved In terms of compulsory license,
with the 1992 amendment, the provisions in the Law were almost in line
with the TRIPS. There are
compulsory licenses on reasonable terms, on public interest and for dependent
patent. In regard to the
conditions of compulsory license for dependent patent, our patent law
stipulates that the latter invention is technically more advanced than
the earlier one. The TRIPS
stipulates that the latter invention is of important technical advance
of considerable economic significance compared with the earlier invention. Because the latter provision is more transparent and easy to
operate, the revisions towards the TRIPS are made in the amendment. Other restrictive conditions for compulsory
license which were previously listed in the Implementing Regulations for
the Patent Law in the 1992 version, for example, the decision of the patent
administrative organ under the State Council granting a compulsory license
for exploitation shall limit the scope and duration; when the circumstances
which led to such compulsory license cease to exist and are unlikely to
recur, the patent administrative organ under the State Council may, upon
the request of the patentee, terminate the compulsory license after examination, are transplanted into the Law. V. Building a diligent,
impartial, practical and efficient patent examination and administration
workforce For the problems complained
most by the public, such as long examination period, bad attitudes of
some patent authorities or individuals, and back door deals etc, the draft
amendment tries to clear and prevent them by legislation through legally
supervising clean administration and high efficiency of the patent administrative
organ under the State Council, to ensure that all their actions are for
the public and for the public's easier use of the patent system. The details are as follows: 1.
The patent administrative
organ under the State Council shall examine and complete applications
in time Due to the rapid development
of science and technology, the number of patent applications grows significantly
and consequently, applications pile up. Therefore, the prolonging of examination duration is inevitable.
The international society is also discussing the issue from different
angles and trying to find a good way to utterly solve this problem.
The management of SIPO has been attaching great importance to the
backlog problem relating to application, reexamination and invalidation. In recent years, several measures were
taken to reduce backlog and significant results have been achieved. In order to supervise SIPO in examining
and finishing applications in time, Article 21 and Article 64 of the revised
Patent Law make relevant provisions.
As Article 21 says ¡°The patent administrative organ under the State
Council and the patent reexamination board subordinated to it shall handle
patent applications and requests concerned according to law and in the
spirit of objectiveness, justice, precision and punctuality. ¡± We understand
the weight that objectiveness, justice, precision and punctuality carry
and will do what we shall do and live up to what the people expected. 2.
The authorities for patent work should not participate in any commercial
activities as to patented products.
The discipline of the patent workforce is tightened. In order to administer the
patent work force from the basics, especially the construction of clean
administration and curb corruption with mechanism, the added Article 66
of the revised Law provides: "The authorities for patent work should
not participate in any such commercial activities as to recommend patented
products to the public. Where
any authorities for patent work violates the provisions of the preceding
paragraph, will be disciplined or punished by the laws.
The added Article 19 provides that the patent agencies should abide
by the laws and administrative regulations and the work ethic. Article 67 says that where any staff member
of the government organs for patent administration or of other related
government organs constitutes a crime by ignoring his duty, abusing his
official power, acting wrongfully out of personal considerations or committing
fraudulent acts, he shall be subject to criminal sanction. If a crime
is not constituted, he shall be subject to disciplinary sanction according
to law. All these provisions are principles that
supervise our construction of high-quality patent administrative organs
and workforce. Any person
or act violating disciplines or laws will be handled without exception
to maintain the overall cleanness of the patent workforce. |