1 Part II Major Changes in the Third Revision of the Chinese Patent Law

2 1. Clarify the ownership of patent rights - exploitation of the co-owner’s right ( Article 15 )

3 Exploitation of co-owned rights: When there is agreement: follow the agreement When there is no agreement: Acts may be done by each co-owner: independently exploit the patent grant non-exclusive license shall distribute licensing royalty among others Acts needs consensus by all co-owners: any other exploitation such as to assign or withdraw or abandon the patent application or patent right

4 2. Enhance the quality and stability of patent right Absolute novelty (Article 22) Protecting genetic resources and indicating the source of GR (Article 5,26) Confidentiality examination for filling patent abroad (Article 20)

5 Article 22 and 23 expands the scope of prior art by abolishing the territorial restrictions. The prior art means any technology or design known to the public by any means in this country or abroad before the date of filing.

6 Article 22 and 23 expand the scope of “conflict application” to a previous patent application of identical invention or utility model filed by any person instead of by others.

7 The amended Article 5 paragraph 2 provides: No patent right shall be granted for an invention-creation of which the acquisition or exploitation of genetic resources violates the relevant laws and administrative regulations of the State and the completion of the invention-creation depends on the said genetic resources.

8 The amended Article 26 paragraph 5 provides: For an invention-creation, the completion of which depends on genetic resources, the applicant shall indicate the direct source and original source of said genetic resources in the application documents; The applicant shall state reasons if the original source of said genetic resources can not be indicated.

9 Article 20 : Delete the requirement that any Chinese entity or individual who intends to file a foreign patent application must file an application in China Replace it with a mandatory advance confidentiality examination by SIPO before an patent application filing abroad for an invention/utility model completed in China. Failure to comply with this requirement will result in the non-patentability of the respective invention in China.

10 3. Improve the design patent system Requirement of “Brief description " and adjustment on the protection scope of the patent right for design (Article 27,59) Exclusion of the plane presswork of logo design (Article 25) Increase criteria for granting design patent (Article 23) Allow filing a single application for similar designs (Article 31)

11 Article 59 and 27: The protection scope for design patent is determined by drawings or photographs with the interpretation of brief description. A brief description of the design shall be submitted with the application.

12 According to Article 25 paragraph 1, no patent right shall be granted to two- dimensional designs made of patterns, colors or their combination, mainly for the purpose of indication.

13 Article 23: The criteria for granting design patent has been raised by: adopting “absolute novelty” standard adding “conflict application” provision adding requirement similar to “inventive step” for invention patent

14 Article 31: An application for a design patent shall be limited to one design. Following can be filed in one application: two or more similar designs for the same product two or more designs which are incorporated in products belonging to the same class and are sold or used in sets

15 4. strengthen the protection of patent right The calculation method for the amount of infringement compensations ( Article 65 ) Preservation of evidence before litigation ( Article 67 ) Enhance administrative enforcement against patent passing off ( Article 63,64 ) Prohibit offering for sale of patented designs ( Article 11 )

16 Article 65: The amount of compensation for the damage caused by patent infringement is determined based on: the losses suffered by the patentee the profits which the infringer has earned the appropriate multiple of the royalty fee the reasonable expense to stop the infringing act

Statutory damage compensation: In case of difficulties to determine damages through above, the courts can impose statutory damages from RMB 10,000 yuan to RMB 1,000,000 yuan.

18 Article 67: Pre-litigation evidence preservation: when evidences might become extinct or hard to obtain hereafter providing guarantee is required the decision shall be made within 48 hours and be enforced immediately the preservation measures will be removed if no lawsuit is initiated within 15 days

19 Article 64: Additional functions and authorities have been conferred to the administrative bodies to investigate passing off cases. inquire the parties involved investigate the facts carry out an on-the-spot inspection inspect and duplicate the contracts, invoices, account books and other relevant materials examine the products related to the illegal act seal up or seize the products that pass off a patent

Article 63: The penalty for patent passing off has been increased: illegal earnings will be confiscated a penalty of 4 times of illegal income when no illegal income, a fine of up to 200,000 yuan

21 The Article 11 paragraph 2 provides: After the grant of the patent right for a design, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, offer to sell, sell or import the product incorporating its or his patented design, for production or business purposes.

22 5. Safeguard the legitimate rights and interests of the public Provisions on compulsory license (Article 48,50,52-54,57) Allow “Parallel import” (Article 69) Add “Bolar exception” (Article 69) Add “Defense of prior art” (Article 62)

23 Article 48-51: Grounds for granting compulsory license no/insufficient exploitation to eliminate or reduce the negative influence of an anti-monopoly conduct to competition when a national emergency or an extraordinary state of affairs occurs, or the public interest so requires for the purpose of public health to manufacture and export a medication dependent patents

24 The Article 50 provides: For the purpose of public health, the Patent Administration Department Under the State Council may grant a compulsory license to manufacture and export a medication which has been granted patent rights to countries or regions that satisfy the provisions of relevant international treaties entered into by the People’s Republic of China.

25 According to Article 52, for invention- creations relating to semi-conductor technology, compulsory license can only be granted for the purpose of public interest or to eliminate or reduce the negative influence of an anti-monopoly conduct to competition.

26 Article 53: T he exploitation of a compulsory license shall be for the supply of the domestic market With exception for the compulsory licenses granted to eliminate or reduce the negative influence of an anti-monopoly conduct to competition to manufacture and export a medication for the public health purpose

27 According to Article 54 The entity or individual requesting a compulsory license for exploitation on the ground of no/insufficient exploitation or dependent patents, shall furnish proof that it or he has made requests for a license from a patentee to exploit its or his patent on reasonable terms and such license has not been obtained within a reasonable period of time.

28 The amendment of Article 57 exempts the importer from the obligation to pay the exploitation fee when a compulsory license is granted for manufacturing and exporting medication for the public health purpose so that the provision as a whole complies with the Protocol to Amend the TRIPs Agreement.

29 Article 69 item 1: Allow “parallel import” condition: relative goods were sold by the patentee or any entity or individual with the authorization of the patentee relative goods: a patented product or a product that was directly obtained by using a patented process actions not deemed as infringement: uses, offers to sell, sells or imports

30 Article 69 item 5 Bolar exception Condition: for the purposes of providing the information needed for the administrative approval Actions not be deemed as infringement: manufactures, uses or imports a patented medication or a patented medical apparatus manufactures, imports or sells a patented drug or a patented medical apparatus solely to the person conducts actions above

31 The Article 62 provides: In a patent infringement dispute, where the accused infringer has evidences demonstrating that the technology or design exploited by it or him belongs to prior art or prior design, the said exploiting act shall not be constituting an infringing act.

32 6.Build up a service orientated government Cancel the designation of foreign-related patent agencies (Article 19) Add distributing patent information as a responsibility of the patent authority under the State Council (Article 21)

33 The Article 19 paragraph 1 provides: Where any foreigner, foreign enterprise or other foreign organization having no habitual residence or business office in China applies for a patent, or has other patent matters to attend to, in China, it or he shall appoint a patent agency legally instituted to act as his or its agent.

The Article 21 provides: The Patent Administrative Department Under the State Council shall release the patent related information completely, accurately, and timely, and publish Patent Gazette periodically.

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