Much anticipated intellectual property protections announced by China

Much anticipated intellectual property protections announced by China

The long wait for China to announce wide-ranging changes to its intellectual property laws is over. The Standing Committee of the People's Congress on October 17 passed a broad line-up of intellectual property improvements that will influence patent infringement enforcement and protection of pharmaceutical patent rights and industrial designs.

The October 17 changes in intellectual property law are the first since 2008 and will be effective June 1, 2021. Having already become one of the world's most important territories for intellectual property rights, these changes will make China even more appealing for patent filings.

Under the amendments, industrial designs will enjoy a 15 year term, up from the current 10 years. Not just the design of an article as a whole, but even partial designs will be protected. The changes are to standardize industrial design with the requirements of the Hague System for the International Registration of Industrial Designs which presently includes 91 other countries. If China joins the Hague System, no separate application will be required for protection in China. The move is an indicator of China's willingness to encourage international investment and give proper protection to designs. Also under the amendments, five additional years may be requested by pharmaceutical patent holders to make up for the time taken for new drug application. Following marketing of the drug, the total effective patent right period will not exceed 14 years. Under Article 76 of the amended law, a new mechanism will resolve disputes of pharmaceutical patent holders with generic manufacturers. The new patent linkage regime under the changed law may encourage pharmaceutical and biotech development in China

The amendments will bring a big change in the area of patent infringement with courts now able to impose up to five times the amount of punitive damages established at trial. There is a greater onus on the alleged infringer to turn over evidence that may throw light on the extent of infringement. Further, the maximum statutory penalties for patent infringement have risen to five million yuan ($750,000) from one million yuan (approximately $150,000).

With the changes giving more teeth to patent rights enforcement in China, patent holders who want to file an infringement claim should consider delaying doing so till June 1 so that they can benefit from the changes. With patent holders able to longer control their patent rights and getting more means to enforce these rights, these changes to Chinese patent law have been received very well from patent practitioners.