2020 was a year of change and challenge. This holds true not only for the way we live and work, but also in relation to the patent laws and practices in the People’s Republic of China (“PRC”). In the last year, a number of significant amendments affecting various aspects of patent prosecution and enforcement were made; and consequential refinements in the existing rules and regulations as well as new implementation legislations to be expected in 2021.

At the top of the list of changes is the Fourth Amendment to the PRC Patent Law passed on 17 October 2020, which included several fundamental revisions to the law. For the very first time in China, protection will be available for partial design; and an unprecedented patent linkage system will be established. Additional ground-breaking changes include patent term extension for pharmaceutical patents, an open license system, an increase in the statutory damages, introduction of punitive damages for patent infringement and modifications on the novelty grace period regime. The revised Patent Law will be effective from 1 June 2021, and accompanying changes to the Implementation Regulations of PRC Patent Law were published on 27 November 2020 for public consultation.

To prepare for the patent linkage system contemplated by the new Patent Law, the China National Intellectual Property Administration and National Medical Products Administration jointly published the Implementation Measures for the Early Resolution Mechanism for Drug Patent Disputes (Trial) (Draft for Comment) (“Draft Measures”) on 11 September 2020. The Draft Measures provide for the establishment for a scheme of registering pharmaceutical patents in China similar to the “orange book” in the US. The registration affords the patentee the right to challenge, via either judicial or administrative means, a subsequent market entry of an imitation drug. Please refer to our blog here for further details regarding the Draft Measures.

The Supreme People’s Court (“SPC”) similarly responded to the proposed patent linkage system by issuing the Provisions on Several Issues Concerning the Application of Law in the Trial of Civil Cases Involving Drug Marketing Review and Approval of Patent (Draft for Solicitation of Comments) (“Patent Linkage JI”) on 29 October 2020. The Patent Linkage JI gave the Beijing Intellectual Property Court exclusive civil jurisdiction to hear disputes arising from the patent linkage system, and court proceedings will not be stayed on the basis of the existence of a parallel administrative complaint or a pending patent invalidation. Pharmaceutical patent owners should also be pleased to know that imitation drug applicants have to include in their Defence, technical information submitted in their marketing approval application that is relevant for infringement analysis. Though the patentee is obliged to keep secret and not to use in its business any confidential information received during the course of the litigation.

The SPC have in fact taken an active role in 2020 to reform some of the rules pertaining to patents and more generally IP litigation, a target that was stated in its “Opinions on Comprehensively Strengthening Judicial Protection of Intellectual Property Rights” published in April 2020. Subsequently, the SPC issued the “Provisions on Several Issues Concerning the Application of Law in the Trial of Administrative Cases on Patent Grant and Validity (1)”, along with seven other judicial interpretations, covering various IP topics such as trade secret and copyright protection, online IP infringement and e-commerce platforms, enforcement measures to deter infringement, rules of evidence in IP cases and criminal trial of IP infringement. In addition, a total of 18 judicial interpretations were amended on 1 Jan 2021 to ensure consistency with the new PRC Civil Code which became operative on the same date.

In the past year we also saw some radical changes to the PRC Patent Examination Guidelines (“Guidelines”). On 1 February 2020 a new section on patentability of algorithmic and business method inventions was added to the Guidelines. Further modifications regarding post-filing experimental data and novelty / inventiveness of chemical and biological inventions were announced in December 2020 and have been effective since 15 January 2021. Upcoming changes to certain regulations on patentability examination, tweaks relating to computer implemented inventions, the addition of a new section on traditional Chinese medicine and revisions on various procedural rules were also proposed on 10 November 2020.

Looking ahead to 2021, the new Patent Law will be effective from June, and the finalized implementation measures and judicial interpretation for the patent linkage system may be released beforehand. Please stay tuned on this blog for more updates.