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Lehman, Lee & Xu - China Patents in the news

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In the News

Are We Expecting the 4th Amendment of the Chinese Patent Law?

The State Intellectual Property Office (SIPO) announced that the amendment of the patent law has been listed in the legislative work plan of the State Council in 2012. Reportedly, the State Intellectual Property Office (SIPO) held a high-level meeting in July 2012 to seek comments on the new amendments.  The attendees included experts and officials from the legislature – the NPC Commission of Education, Science, Culture, and Health, the NPC Standing Committee Legislative Affairs Committee, and the State Council Legislative Affairs Office – as well as local Intellectual Property offices, universities, businesses, and patent agency representatives.

China amended the patent law in 2008, the third time in its 20+ years of patent law history.  What is somewhat surprising is that the SIPO is initiating a new round of patent law amendments this year. 

The background reason for the 4th amendment seems to be largely due to a motivation to strengthen the administrative enforcement of patent infringements.  At the time of the third patent law amendment, SIPO lobbied hard for more enforcement powers.  One of the proposed measures was to empower local intellectual property offices to raid and seize infringing goods at the alleged infringers’ premises. However, the legislature declined to adopt SIPO’s requests.

Four years later, SIPO appears determined to press for administrative enforcement campaigns.  The SIPO-operated Chinese press, Intellectual Property News, cited recent survey data that stated 30% of local Chinese patent owners have run into infringement disputes, but only 10% have ever taken enforcement actions.

Local commentators noted that the high cost of enforcement, high burden of proof and low amount of compensation have been major factors in suppressing the enforcement efforts of local patent owners'.

It appears that SIPO wishes to step into the zone of enforcement and take on more responsibilities.  The current laws and regulations do not give much enforcement powers except for allowing local IP offices to hear disputes and impose injunctions and fines.  In practice, the lack of ability to seize and collect evidence as well as the lack of manpower makes it very difficult for local IP offices to carry out effective actions.

Under the usual legislative practice in China, SIPO will be expected to circulate the proposed changes to the patent law for public comments.  However, it sounds like that the key entity to be convinced is the legislature in the State Council, which had refused to grant more powers to SIPO last time.

If SIPO indeed obtains more enforcement power, it should arguably benefit international patent owners.  At the same time, the risk of more patent disputes with foreign companies will equally grow as high.

Web link: http://www.zypartners.com/zjys/blog/show_e.asp?newsid=115

Edward Lehman 雷曼法学博士
Managing Director 董事长

LEHMAN, LEE & XU China Lawyers
Co-Founder with Russell Brown LehmanBrown International Accountants

Lehman, Lee & Xu is a top-tier Chinese law firm specializing in corporate, commercial, intellectual property, and labor and employment matters. For further information on any issue discussed in this edition of China Patents In The News or for all other enquiries, please e-mail us at mail@lehmanlaw.com or visit our website at www.lehmanlaw.com and Mongolia www.lehmanlaw.mn.

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© Lehman, Lee & Xu 2012.
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