CHINA
PATENT LAW AND REGULATIONS CONTINUE TO CHANGE
Stephen Yang Peksung Intellectual Property Ltd
T e year 2012 was one of change. T e State Intellectual Property Offi ce (SIPO) published a few new regulations related to patent marking and prioritised examination, as well as a draſt of the fourth amendment to the Chinese patent law.
Draft fourth amendment
On August 9, 2012, SIPO published a draſt amendment to the Chinese patent
law, soliciting public comments. T e draſt amendment was
not extensive and related to only seven articles, all of them directed to enforcement.
A unique aspect of the Chinese patent system has been the administrative route for enforcing patent rights. In other words, a patentee does not necessarily need to go to court to enforce its patent rights. Instead, the Chinese patent law off ers the option of going to local administrative bodies to fi le a complaint against the alleged infringers. Currently, the local administrative bodies are called local IP offi ces, spread across China in many cities. However, until now, apart from issuing an order to stop infringement and mediating possible damages among relevant parties, local IP offi ces have not been given the power to take action against infringement. T e draſt amendment aims at strengthening the power of the local IP offi ces.
First, the draſt amendment empowers local IP offi ces to award damages. Currently, if the relevant parties are not satisfi ed with mediation at the local IP offi ce in terms of damages, they have to go to court. T is amendment aims to reduce considerably the time needed to obtain damages.
T e draſt amendment also allows local IP offi ces to query the parties concerned, investigate the relevant circumstances of the suspected infringing act, carry out an onsite inspection of
the site where the infringement takes place, review and reproduce the contracts, invoices, 50 World Intellectual Property Review e-Digest 2013
account books and other relevant materials, examine the products relevant to the infringing act and confi scate them.
Under the current Chinese patent law, local IP offi ces have this power for patent passing-off cases but not for infringement cases. T is amendment draws on the relevant provisions in the Chinese trademark law which empower the local Administration for Industry and Commerce (AIC), the administrative authority for enforcing trademark rights, to take similar actions against trademark infringement.
T e draſt amendment clarifi es courts’ rights to investigate, confi scate infringing products and collect evidence such as invoices, account books and other relevant materials. In addition, the draſt amendment provides that the alleged infringer may be subject to criminal charges, if it refuses to provide the evidence requested by the court or moves, forges or destroys the evidence. T is amendment aims at coping with the diffi culty in collecting evidence, which is considered the trickiest part of infringement litigation in China.
T e draſt amendment also includes provisions related to tripling the damages for wilful infringement. T is is to create greater deterrence to potential infringers as the cost of infringement will increase, and to compensate the patentee for the time and energy spent on protecting its patent rights.
In order to curb acts of wilful infringement, repeated infringement and infringement by multiple parties, which usually require the patentee to incur huge costs in terms of time and money without the promise of meaningful compensation at the end, the draſt amendment prescribes that if an infringing act is found to be one that disrupts the market order, the local IP offi ce, or even the IP offi ce at the state level, can order the infringement to cease, confi scate the illegal earnings, and confi scate or destroy the infringing products or any equipment specially designed for conducting the infringing act. In addition to these measures, the local IP
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