Xintian, Yin

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XINTIANFINAL2.DOC 04/02/99 2:47 PM253A BRIEF INTRODUCTION TO THE PATENTPRACTICE IN CHINAYIN XINTIAN*The Patent Law of the People’s Republic of China was adoptedin 1984 and entered into force on April 1, 1985.  It was revised in1992, and the revised law entered into force on January 1, 1993.Through this revision, the patent system in China has been improvedand protection for patent rights has been strengthened in the follow-ing ways:(1) The technological fields of patent protection have beenbroadened to cover pharmaceutical products, food, beverages, fla-vorings, and substances obtained by means of chemical processes.(2) The duration of a patent right has been extended.  The dura-tion of patent rights for inventions has been extended from fifteenyears to twenty years, and the duration of patent rights for utilitymodels and design has been extended from five years to ten years.(3) The exclusive right has been enhanced.  The patent protec-tion for a manufacturing process has been extended to the productdirectly obtained by the patented process and a patentee has the rightto prevent any other person from importing, without his authoriza-tion, the patented product or products obtained directly by his pat-ented process.(4) The grounds for granting a compulsory license have been re-stricted.  The situations in which a compulsory license may begranted only include those where (a) an entity qualified to utilize theinvention or utility model made a request for authorization from thepatentee to utilize the patent on reasonable terms and such effortshave not been successful within a reasonable period of time, and (b) anational emergency, an extraordinary state of affairs, or the publicinterest requires it.1* Deputy Principle Director, Administrative Department for Patent Examination, Chi-nese Patent Office.1. Article 51 of the old Patent Law stipulated that a patentee has the obligation to utilizeor otherwise to authorize other persons to employ the patented invention or utility model inChina, and Article 52 of the old Patent Law stipulated that the Patent Office may grant a com-pulsory license where the patentee fails, without a justified reason, to fulfill the obligation setXINTIANFINAL2.DOC 04/02/99  2:47 PM254 DUKE JOURNAL OF COMPARATIVE & INTERNATIONAL LAW [Vol 9:253(5) The original pre-granting opposition procedure has been re-placed by the post-granting revocation procedure.  As a result, theentire approval procedure of a patent right has been shortened by anaverage time period of three to four months.  The retroactive effectof a declaration of invalidation has been restricted.(6) According to the former Patent Law, any patent right de-clared invalid was deemed to be non-existent from the beginning.The revised Chinese Patent Law keeps this provision, but at the sametime stipulates the following:The decision of invalidation shall have no retroactive effect onany judgment or order on patent infringement that has been pro-nounced and enforced by the People’s Court, on any decision con-cerning the handling of patent infringement that has been made andenforced by the administrative authority for patent affairs, and onany contract of a patent license and of an assignment of a patent rightwhich has been performed, prior to the decision of invalidation.However, the damage caused by other persons in bad faith on thepart of the patentee shall be compensated.  This new provision ishelpful for maintaining a stable economic order.The revised Chinese Patent Law is fully in line with the require-ments of the Agreement on Trade-Related Aspects of IntellectualProperty Rights (TRIPS Agreement).  Moreover, in light of experi-ences since the enforcement of the revised Chinese Patent Law, thepreparation work for the second revision of the Chinese Patent Lawis in progress.  In addition, the drafting and approval of the Regula-tions on Protection of Plant Varieties and the Regulations on Protec-tion of Layout Design of Integrated Circuits have been completed.These two regulations are independent legislation, as allowed by theTRIPS Agreement, and patent applications in these fields will behandled by governmental authorities separate from the Chinese Pat-ent Office.PATENT APPLICATION AND EXAMINATIONDuring the last ten years, the patent work in China has achievedremarkable progress.  The most direct evidence of the progress is therapid increase of patent applications received by the Chinese PatentOffice.  The total number of applications for the three kinds of pat-forth in Article 51 within three years from the date of the grant of the patent right.  Clearly, agrant of a compulsory license at present is limited.  In fact, the Chinese Patent Office has nevergranted a compulsory license since its establishment.XINTIANFINAL2.DOC 04/02/99  2:47 PM1998] PATENT PRACTICE IN CHINA 255ents2 increased from 14,372 in 1985 to 109,750 in 1996, representingan average annual increase of eighteen percent.  Over the same timeperiod, the total number of patent applications for inventions in-creased from 8,558 to 31,061, representing an average annual increaseof twelve and a half percent.  It is worth noting that since the acces-sion of China to the Patent Cooperation Treaty (PCT) in 1993, thenumber of patent applications for inventions filed by foreign appli-cants increased sharply.  By the end of 1996, the number of patentapplications filed by foreign applicants totaled 93,791.  The ten lead-ing countries ranked according to patent applications filed with theChinese Patent Office are Japan, the United States, Germany,France, Korea, Switzerland, Britain, the Netherlands, Italy, and Swe-den.Since January 1, 1994, the Chinese Patent Office has served asthe PCT international search authority and international preliminaryexamination authority.  At present, the Chinese Patent Office hasabout 450 examiners, among them 240 substantive examiners.3  In1996, 43,780 patent rights were granted, including 2,976 patents forinventions, 27,171 patents for utility models, and 13,633 patents fordesigns.Along with the increase of patent applications, there is already aconsiderable backlog in the examination work of the Chinese PatentOffice.  In order to solve this problem, the Chinese Patent Office hasbegun to take various measures, which are concentrated in two areas.First, approximately seventy to eighty new examiners have been re-cruited annually since 1995, and the Office has a plan to double itsteam of examiners by the end of 2000.  Second, an automated systemwill be established that will include a computer search system similarto EPOQUE (a full-text retrieval database utilized by the EurpoeanPatent Office) and an automated administrative system.  It is ex-pected that the examination capability of the Chinese Patent Officewill be improved after completing the above efforts.2. The Chinese Patent Law simultaneously provides three kinds of patent rights: patentsfor inventions, patents for utility models, and patents for design.  This is one of the distinctcharacteristics of the Chinese Patent Law.3. According to a provision of Chinese Patent Law, substantive examinations should becarried out for patent applications for inventions, while patent applications for utility modelsand design only require a preliminary examination.XINTIANFINAL2.DOC 04/02/99  2:47 PM256 DUKE JOURNAL OF COMPARATIVE & INTERNATIONAL LAW [Vol 9:253PATENT PROTECTIONWhenever a patent right is infringed in China, the patentee mayeither request the administrative authority for patent affairs to han-dle the matter or directly institute legal proceedings in court.According to the Chinese Patent Law, an administrative author-ity for patent affairs is established in every province, autonomous re-gion, and municipality.  The authorities have the power to order aninfringer to stop the infringement and to compensate the patentowner for the damage.  Any party who is dissatisfied with the deci-sion of the authority may institute legal proceedings in court.  If suchproceedings are not instituted within the time limit and if the order isnot complied with, the authority may approach the court for compul-sory execution.  In addition to patent infringement cases, the authori-ties also take the responsibility of handling the “passing off” patentcases.4  According to statistical data, the administrative authority forpatent affairs throughout China received a total of 546 cases in 1996,396 of which were completed.The Chinese Patent Law provides that any entity or individualmay, after the expiration of six months from the date of the an-nouncement of the grant of a patent right, request that the patentright be declared invalid.  In many cases, an accused infringer will ini-tiate an invalidation procedure as a counter action.  Similar to theprocedure in Germany, the infringement cases and invalidation casesare handled in different ways.  The invalidation request is filed withthe Re-examination Board of the Chinese Patent Office.  TheBoard’s decision with respect to a patent right for utility models anddesign is the final decision, while either party who is not satisfied withthe decision of the Board concerning a patent right for invention mayinstitute legal proceedings in the Intermediate Court and appeal tothe High Court of Beijing.In practice, the administrative authority for patent affairs or thecourts may interrupt the infringment cases if the accused infringerinitiates the invalidation action within the specified time limit, andthen restore the proceedings if the patent right is maintained.  It isproblematic that it takes a considerably long period of time for a pat-entee to go through all of the established procedures.  Since the pat-4. Article 63, second paragraph, provides that “where any person passes any non-patented product off as a patented product or passes any non-patented process off as a pat-ented process, such person shall be ordered by the administrative authority for patent affairs tostop the passing off, correct it publicly, and pay a fine.”XINTIANFINAL2.DOC 04/02/99  2:47 PM1998] PATENT PRACTICE IN CHINA 257ent right for inventions is granted after a substantive examination,such interruptions are relatively rarer in the case of inventions thanin the case of utility models and design.

A Brief Introduction to the Patent Practice in China

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A Brief Introduction to the Patent Practice in China

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