China on the way to a high-technology country: The legal policy perspective Stefan Luginbuehl Lawyer, International Legal Affairs

Background of the revision of the patent law National IP Strategy initiated in 2005 "China will become a country with a comparatively high level in terms of creation, utilisation, protection and administration of IPRs by 2020" –National patent development strategy of November 2010 A group of core patents for newly and emerging industries and key technology should be in the hands of China within the next 10 years

Evolution of patent applications filed with SIPO

Evolution of patents granted by SIPO

Filing strategy of Chinese companies with the EPO "Euro-direct" "Euro-PCT" Total * 1854 January to November

Objectives of third revision of the Chinese Patent Law Improved patent quality Protection of national defence interests and other state interests Improved enforcement of patent rights Better balance between patent protection and public interests

Amendments in order to improve patent quality Introduction of absolute novelty standard Scope of "conflicting applications" expanded Simultaneous application for utility model and patent with obligation to declare to abandon utility model right before patent is granted

Absolute novelty standard Art. 22(5) Chinese Patent Law... (5) The "prior art" referred to in this law refers to any technology known to the public before the filing date of the patent application in China or abroad.

"Conflicting applications" Art. 22(2) Chinese Patent Law... (2) "Novelty" means that the invention or utility model shall neither belong to the prior art, nor has any entity or individual previously filed before the date of filing with the patent administrative department under the State Council an application on an identical invention or utility model which was recorded in patent application documents or other gazetted patent documents published after the said date of filing.

Simultaneous application for a utility model and a patent Art. 9(1) Chinese Patent Law (1) For any identical invention-creation, only one patent right shall be granted. However, with respect to the application of a utility model and a patent for the identical invention-creation filed by the same applicant on the same day, the invention patent may be granted if this utility model obtained first is still in force, and the applicant declares to abandon the utility model that has been granted.

Simultaneous application for utility model and patent Rule 41 Implementing Regulations to the Chinese Patent Law (ImplReg)... (2) Where an applicant files an application for a utility model and a patent for the same invention-creation on the same (the filing date), the applicant shall make a declaration each time that he or it has applied for the other patent for the same invention creation (5) The utility model is abandoned upon the date of announcing the grant of the patent.

Amendments in order to protect national defence interests and other interests of the state Art. 20 Chinese Patent Law (1) Any entity or individual intending to file a patent application in a foreign country for an invention-creation made in China, shall apply in advance for a confidentiality examination conducted by the patent administrative department under the State Council (5) Any foreign patent application that violates the provision of the first paragraph of this Article will not be granted a patent right if the patent is applied for in China.

Amendments in order to protect national defence interests and other interests of the state Rule 8 ImplReg (1) Invention or utility model made in China as stipulated in Article 20 of the Patent Law refers to those invention-creations or utility models, for which the substantial content of the technical solution is completed within the territory of China.

Amendments in order to protect national defence interests and other interests of the state Request for confidentiality examination has to be filed prior to the filing of an application abroad, regardless of whether an application is also filed with the Chinese State Intellectual Property Office (SIPO) The request must include a detailed description of the technical solution if an entity or individual intends to file abroad No separate request for confidentiality examination isnecessary if an applicant files an international application with SIPO

Amendments in order to protect national defence interests and other interests of the state Procedure (Rule 9 ImplReg) SIPO examines whether the invention/utility model is likely to involve interests related to national security or other substantial interests requiring confidentiality If the applicant does not receive a notification from SIPO within 4 months from the date of submitting the request that such interests are likely to be involved, he can apply for a patent abroad

Amendments in order to protect national defence interests and other interests of the state Procedure (Rule 9 ImplReg) If the applicant has received a notification from SIPO that such interests are likely to be involved, SIPO has to decide on whether the confidentiality must be maintained and notifies the applicant If the applicant does not receive any decision within 6 months from the date of submitting the request on whether the confidentiality must be maintained, the applicant can apply for the patent abroad

Amendments with regard to a better enforcement of patent rights Administrative authorities –Fines 4 x the illegal earnings in case of passing-off/patent counterfeiting, or up 200‘000 RMB (≈ 22’000 €) if there were no illegal earnings (Art. 63 revised Chinese Patent Law) –More competences as regards investigation of premises (Art. 64 revised Chinese Patent Law)

Amendments with regard to a better enforcement of patent rights Civil courts -Damages to be calculated in a mandatory hierarchy of methods (Art. 65 Chinese Patent Law) 1. Actual losses 2. Profits of the infringer 3. Multiple licencing fees 4. Statutory damages no less than 10‘000 yuan (≈ 1’100 €) and no more than 1‘000‘000 yuan (≈ 110’000 €) -The amount of damages must include the reasonable costs incurred for stopping the patent infringement

Amendments with regard to an improved balance between patent protection and public interests Extended possibilities to grant compulsory licences In case the enforcement of the right is considered to be a monopolistic act (Art. 48(2) Chinese Patent Law) 2003 Doha declaration on TRIPs and public health

Amendments with regard to an improved balance between patent protection and public interests Requirement to declare the source of genetic resources in the application Art. 26 Chinese Patent Law... (5) An applicant who files a patent application for an invention-creation completed on the basis of genetic resources shall in the patent application document indicate the direct and original source of the genetic resource of the genetic resources; the applicant unable to indicate the original source of the genetic resource must provide an explanation.

Amendments with regard to an improved balance between patent protection and public interests Requirement to declare the source of genetic resources in the application Must be indicated in the application Special forms must be filed indicating the direct and original source SIPO will issue a notification to correct any defects

Amendments with regard to an improved balance between patent protection and public interests New exceptions from patent infringement "Prior art defence" (Art. 62 Chinese Patent Law) "Bolar exemption" (Art. 69(4) and (5) Chinese Patent Law) "International exhaustion" (Art. 69(1) Chinese Patent Law))

Conclusion The third revision of the Chinese patent law evidences a shift to the establishment of a domestic patent system which serves China's own economic interests China continues its path to protect its own knowledge, and using foreign knowledge to increase the competitiveness of its own companies on the domestic and world-wide markets

Thank you for your attention Stefan Luginbuehl, Ph.D. Lawyer, International Legal Affairs European Patent Office, Munich Tel: Fax: