Per news reports from China’s Legal Daily and Xinhua, the 22nd meeting of the Standing Committee of the 13th National People’s Congress completed the revision of the Patent Law on October 17, 2020. The newly amended patent law will come into effect on June 1, 2021. As of writing, the text of the amended patent law has not been released so it is unknown exactly what changes have been made from the most recent draft for comments. However, the reports emphasized increasing damages for infringement, a new patent open license system, and patent term extensions to compensate for time spent awaiting regulatory approval for pharmaceutical products.
The amended patent law includes provisions for punitive damages for intentional infringement allowing for up to 5 times the calculated loss. The loss can be calculated based on the loss suffered by the right holder, the benefit obtained by the infringer, or a multiple of a patent license fee. Further, the maximum statutory damages for when the loss cannot be calculated will be increased to 5 million RMB (~$746 thousand USD).
Patent Open License System
In order to reduce transaction costs and improve the efficiency of patent licensing, this revision of the Patent Law adds a new patent open license system, which stipulates an open license statement by the patentee and its effective procedures, the licensee’s procedures and rights and obligations for obtaining an open license, and corresponding dispute resolution. Further, participating patentees will be entitled to a reduction or exemption to annuity fees to encourage participation.
Patent Term Extensions
The amended patent law adds patent term extensions to compensate for the time spend in the review and approval of new drugs for marketing. Extensions are not automatic but must be requested by the patentee. The maximum extension is 5 years with total effective patent term not exceed 14 years after approval. The reports did not mention patent term extensions being available for medical devices undergoing regulatory approval.
We will report further upon the release of the text of the amended patent law.