AbstractThe Chinese Patent Law, now eleven years old, has seen much revision in recent years, culminating in the revised Patent Law of 1993. Changes included extension of the scope of patent protection, the length of protection, and the tightening of infringement laws. These revisions have brought Chinese Patent Law to international standards, and sharply increased the number of patent applications in China.
Since acceding to the Patent Cooperation Treaty (PCT) in 1994, there has been another increase in patent applications, and an easing of patent application for Chinese abroad. China has further automated its procedures to meet PCT standards and to provide a Chinese patent documents search database on CD–ROM, patterned after the World Patent Index (WPI).
The article also discusses legal choices dealing with infringement of patent. The expansion of China’s patent agency has resulted in a lack of qualified personnel. To deal with this, the China Intellectual property Training Center is established.
It has been eleven years since the Chinese Patent Law entered into force on 1 April 1985. The difference between China and most of the countries adopting a patent system lies in the fact that the patent system in China started at a time when China still had a planned economy. This difference demonstrates at least two points: firstly, the policy of realizing the “transformation of a planned economy into a market economy” put forward in the Ninth Five–year Plan was considered as early as 1985 among the senior Chinese leaders; secondly, the development of the Chinese patent undertaking is bound to be unique.
Through over ten years of active exploration and arduous efforts, achievements made in the development of the patent system in China — creating from nothing and growing from weak to strong — have attracted worldwide attention. Especially in the past several years, by means of revising the Patent Law, acceding to the Patent Cooperation Treaty, implementing the patent information automation plan, strengthening the enforcement of the law, and improving the Chinese patent system, the patent system in China has met the requirements for developing countries stipulated in the TRIPS Agreement, and it has done so before the deadline. China has made great progress in perfecting its patent system within a short period of time and has thus been highly evaluated by the World Intellectual Property Organization (WIPO).
Revising the Patent Law With High Standards
The world’s patent system has a history of over several hundred years. The first Patent Law in China, which was adopted in 1984 and entered into force in 1985, was “a modem patent law that is up to the international standards and tallied with China’s national conditions on the whole.” But with the deepening of reform and opening up, in order to be in line with the development of the protection of intellectual property rights all over the world, to solve the problems arising from implementing the Patent Law, and to coordinate with what is stipulated in the agreement reached in the Sino–American negotiations concerning intellectual property rights, the revised Patent Law (to which major amendments were made in 1992) came into force on 1 January 1993.
According to the revised Patent Law, the scope of patent protection has been extended to food, pharmaceuticals, and chemicals. The protection term for inventions was extended from 15 years to 20 years, and the terms for utility models and industrial designs were extended from 8 years (including 3 years renewable) to 10 years from the filing date. The other amendments in the revised Patent Law include provisions concerning the right to import, and domestic priority right; and supplementary provisions concerning punishment for passing–off patents. In addition, the prior–grant opposition procedure has been changed into a post–grant revocation procedure; the burden of proof for patented process infringement has been transferred; and the means for handling cases by the patent administrative authorities have been enhanced. The revised Patent Law has been drawn closer to the international standards, and the major requirements for developing countries stipulated in the TRIPS Agreement have been met in timely fashion. This is a great leap forward, which symbolizes the fact that it took China less than ten years to carry out a process that took many countries dozens of years (or even a hundred years), and to meet the needs of deepening the reform and opening wider to the rest of the world. The revision has created a favorable legal environment for expanding international trade, promoting technological exchange with foreign countries, and attracting foreign investment. Besides, the revision of the Law has also created favorable conditions for China to accede to the World Trade Organization. The amendment of the Patent Law is an important event in China in terms of promoting its science & technology and further improving its patent system, as well as expanding foreign trade and developing the economy.
Implementation of the revised Patent Law has brought about encouraging changes in patent applications in China. Firstly, domestic applications for invention have greatly increased, from 5,000 cases per year before revision to over 10,000 cases now; and the proportions of the applications for three types of patent have become more reasonable.
Secondly, among the domestic patent applications, there is a rapid increase in the number of patent applications from enterprises. There were 7,928 applications from enterprises in 1992, 8,236 in 1993, and 6,868 in 1994. However, in 1995, the figure went up to 11,800, an increase of 72.6% over that for 1994. From January to July this year, the number of applications reached 10,523, an increase of 92% over that for the same period of last year. The above figures show that with the gradual restructuring of the economic system, which aims at constructing a socialist market economy, enterprises — the mainstay of the market economy — have become more aware of the importance of patents.
Thirdly, foreign patent applications for inventions have increased sharply. In 1993, 9,123 such applications were filed, which means an increase of 108% over 1992. In 1994, the number was 9,928, an increase of 9% over 1993; and in 1995 the number was 14,165, an increase of 42.6% over the previous year. These figures show that the patent system in China is more attractive than before to foreign applicants. Because of the increases, favorable conditions now exist in China to utilize foreign technical resources more effectively, and to attract more foreign investment.
Fourthly, with market competition increasing day by day, there has been a continuous growth in the number of applications for design, namely, an annual increase of about 30% in the past two years. The number of applications for patents amounted to 83,000 in 1995, over four times as many as in 1985 (14,000) and in 1986 (18,000). Now that the scope of protection in the revised Patent Law extends to food, pharmaceuticals, and chemicals, there is an obvious increase in the applications in these fields. In the year when the revised law came into effect, the number of applications for patents on chemical compounds reached 1,975, an increase of 41% over 1992 (1,405). The number of applications for patents on pharmaceuticals was 2,871, an increase of 15% over 1992 (1,120). The number of applications for patents on food amounted to 1,574, an increase of 86% over 1992 (846). The following years saw a continuous increase in the number of applications in these areas. By the end of July 1996, the total number of applications reached 578,958, of which 494,463 were domestic applications, accounting for 86% of the total. Over 80 countries and regions have applied for patents in China, and the total number of foreign patents granted is 292,785. In 1995, the top ten countries and regions that applied for patents in China were Japan, the United States, Germany, the Republic of Korea, Hong Kong, France, Switzerland, Britain, the Netherlands, and Italy. Patent applications from Sweden increased from 70 in 1994 to 214 in 1995, an increase of 220%, so that Sweden ranked eleventh among the foreign countries and regions which filed patent applications in China.
Moving Closer to International Practice and Acceding to the “Patent Cooperation Treaty”
The Patent Cooperation Treaty (PCT) is the most important international treaty under the “Paris Convention for the Protection of Industrial Property,” and the international application system has been based upon it. Since the implementation of the Chinese Patent Law, the Chinese Patent Office (CPO), patent agencies, and applicants have gained experience in the procedures involved in examining and granting patents. With more than 1,000 staff members and more than 30 million patent documents in the CPO, the PCT requirements on minimum documentation can be met. The quality of examination has reached a high level, and the patent information and examination procedures have basically been automated. What is more important is the fact that the Patent Law has already been revised for the first time, and the right to patent protection has come up to the requirements of the TRIPS Agreement for developing countries. Enforcement of the Patent Law has been good. All of these factors paved the way for China to accede to the PCT, depositing the instrument of accession in September 1993, and starting to implement the Treaty on 1 January 1994. From the very beginning we resolved to accede to the PCT with high standards. After investigation, WIPO concluded that the CPO had basically met the requirements on an international searching authority and on a preliminary examination authority, and thus gave its support to China’s bid for acceding to the PCT. At the PCT conference, it was unanimously agreed that China acceded to the PCT with high standards. On 1 January 1994, China became a member of the PCT, and in the meantime the CPO became a receiving office of the PCT, as well as an international searching authority and preliminary examination authority, like the United States, Japan, Russia, Australia, Austria, and Sweden. Besides, Chinese became a working language of the PCT.
China’s accession to the PCT shows that the Chinese patent system is in line with international practice. Accession to the PCT with high standards is a symbol of recognition and high appraisal of the Chinese patent system by the international patent community, and a sign that CPO patent examination has reached an international level. Accession to the PCT helps improve China’s position in the international effort to protect intellectual property. It helps Chinese to apply for patents in foreign countries, and foreign applicants to apply for patents in China. It also facilitates investment, and the transfer of technology. In addition, accession will help China to further improve its patent administration, and will help overseas Chinese (from Hong Kong, Macao, and Taiwan) to apply for international patent protection through the PCT.
Since China became a member of the PCT, the number of foreign patent applications was reduced in the first half of 1994 and 1995 because some applications were filed through the PCT. The increase in the number of foreign patent applications was only 19.8% in the first half of 1995, compared with the same time in previous years. But, beginning in August 1995 (namely, twenty months after China’s implementation of the treaty), there was an obvious increase in the number of patent applications for inventions month by month, and the annual increase rose to 43% in 1995. China's accession to the PCT is a strong driving force increasing the number of foreign applications. In 1995, 2,766 international patent applications for inventions entered into the national phase in China, and the increase is even greater in 1996. From January to July 1996, the number was 3,425. In the past two years there were over 100 PCT patent applications filed each year through the CPO. In order to guarantee the quality of examination, we have taken advantage of EPO’s ECCA system to establish our files according to our needs, and have gained experience in this respect. There is no doubt that long–term and unremitting efforts must be made to enable the CPO to be a high level PCT international searching authority and preliminary examination authority.
Continuous Perfecting of the Chinese Patent Information System
We must be equipped with first–class working facilities in order to make the CPO a first–class office. We see from the experience of patent offices in other countries that there is no way out without automation. The only way for the CPO to come closer to the world’s advanced standards is to build up its own information system. Therefore, ever since the CPO was set up, great importance has been attached to automation, and an accordingly large amount of investment, equipment, and manpower has been put into this effort. During that period, we obtained kind support from the patent offices of friendly countries.
Through ten years of development and construction, automation has played a very important role in the daily work of the CPO and become an indispensable working tool.
1. Automation of the patent application management
The China Patent Management System (CPMS) has been developed. The major functions of this system include procedure management, file management, time–limit management, fees management, and support for publishing. The system can support the whole process, from application to the expiration of the patent.
A patent will go through many stages from application to expiration, including receiving, classification, formal examination, announcement, substantial examination, finalization, and grant. These stages succeed one another when certain conditions are met, just like the flow process in making spare parts in a factory. So the whole process is referred to as a flow process in the office. Each application will be treated appropriately at each stage and will create corresponding data. The function of the CPMS is to record and deal with the data, instead of with human beings. The CPMS can control the process, indicate the state and position of a file, supervise the payment of the fees, take out bibliographic data for publication, print letters to applicants (agents), print patent certificates, etc.
To further improve the CPMS system, we have tried to expand its functions. At the same time, we have moved from the old Siemens computers supported by BS2000 software to new client–servers supported by UNIX, and have developed the second–generation management system (CPMS–2). The new system began to be tested in October 1995, and it has already satisfied the requirements for acceptance. The CPMS–2 has many functions additional to those of the CPMS, and is a system developed for the purpose of adapting to new computers with new functions.
2. Patent information system
The World Patent Index (WPI) was made to be a reference source for examiners. This data base contains over 7 million items,covering 37 countries and two international organizations, in the form of bibliographic data and abstracts in English. It was put into use in 1991. Meanwhile, the CPO has collected search CD–ROMs from more than ten countries in Europe, and from America, Japan, WIPO, and EPO. It has also collected the English version of Japanese Patent Abstracts for examiners and public readers to refer to.
The Chinese patent documents search database has been developed. Up to now, five work stations for searching have been installed in the Examination Department, and connected to the China Documentation System through a network. Examiners can use the work stations to consult classified full–text Chinese patent documents in search rooms of their own departments, and can print the needed documents when necessary.
Meanwhile, long–distance terminal service is provided. Users can visit the CPMS from distant terminals by telephone to obtain information on the legal status of, or bibliographic data about, patent applications or granted patents. Altogether, thirty–four long–distance terminals have been linked to the computer system in the CPO. One can ask for a computer search at the CPO in person or through correspondence, and obtain relevant documents. Floppy disks or tapes can be provided when users have special requirements in a particular technical field or during a particular period.
3. CD–ROM products service
In the past two years, the CPO has developed a Chinese patent indexing system on CD–ROM disks with both Chinese and English texts. Contained in the disks are bibliographic data, abstracts, and main claims of patents for invention, as well as bibliographic data on utility models, published from 1985 to the present. It has twelve searchable fields, and the number of its users exceeds 150. CD–ROM disks containing Chinese patent documents in full text have also been developed, and now there are dozens of subscribers.
The continuous improvement in the level of automation of the patent process and search services has not only saved manpower and speeded up the process, but also upgraded and supported the management level of the CPO. The quality of examination and other services has been substantially improved. Automation has also provided the necessary conditions for spreading patent information and exchanging patent documents throughout the world. At present, the CPO is carrying out the most arduous project since the office was set up, that is, the automation of the Chinese patent information system. This project is supposed to be completed in 1998, and by that time the Chinese patent information system will come up to world standards.
Continuous Strengthening of Judicial and Administrative Enforcement, and the Building of an Effective Law Enforcement System with Special Characteristics
The protection of the legitimate rights and interests of the patentee is the core of the patent system and the major concern of the public. Over the past eleven years, a highly effective legal system protecting patent rights has taken shape. It has Chinese characteristics and is compatible with the nation’s law–enforcement system. According to Articles 11 and 60 of the Patent Law, the following are to be considered as infringing acts: manufacturing, using, and selling patented products for production and business purposes without obtaining permission from the person owning the patented right; and importing the patented products, or importing the products directly obtained by the patented process, for the above–mentioned purposes.
When infringement occurs, the owners of the patent can investigate the civil liability of the infringers according to the law. If the criminal law is offended, the infringers will be charged in a criminal court. There are four aspects of infringement: the objective existence of the infringing acts; the damaging effect caused; the cause and effect relation between the illegal acts and the damaging effects; the infringers, under some circumstances, bear some false acts. According to the Civil Procedure Law, the patentee bears the burden of proof. but when the patented process is infringed, the burden of proof shifts to the defendant, according to Article 60 of the Patent Law. This is in line with international practice. The time–limit for a lawsuit claiming infringement of a patent is two years, starting from the time when the owner of the patent (or the interested party) became aware of the infringement.
According to Article 60 of the Patent Law, when infringement occurs, the owner of the patent (or the interested party) can either ask the patent administrative authorities to deal with the case, or can directly institute legal proceedings in the people’s court. Compared with other countries in the world, the patent system in China provides an additional option not available elsewhere, namely, administrative mediation and handling. This has the advantage of economy, high efficiency, and simplicity, and is popular among the parties concerned. The system took into consideration the actual conditions of China when the Patent Law was adopted in 1984. Operating with the judicature as a backup force, the system settles patent disputes either by judicial procedures or through patent administrative authorities. Any concerned party dissatisfied with the decision made by the administrative authority may institute legal proceedings in the people’s court within the time–limit. This system preserves the simplicity and timeliness of administrative settlement but also gives the person concerned the choice of judicial adjudication. Up to now, patent administrative authorities all over the country have received over 3,500 cases of patent disputes, 90% of which have been closed. Experience over the past eleven years shows that this system is highly successful and has played an important role in protecting the legitimate rights and the interests of patentees and interested parties.
The revised Patent Law empowers the patent administrative authorities to investigate and prosecute the acts of the passing–off patent. In July 1994, the CPO issued “Provisional Regulations on Investigating and Prosecuting the Passing–off Patents by Patent Administrative Authorities.” Similar regulations were made in many places in order to stop the passing–off acts.
Over the past several years, the intermediate people’s courts in Beijing, Shanghai, Guangzhou, Zhuhai, Shantou, Fuzhou, Xiamen, Changsha, Haikou, and Dalian have set up tribunals to handle cases concerning intellectual property rights. This was done to promote efficiency and to guarantee proper handling of such cases. The higher people’s courts in Beijing, Shanghai, Tianjin, Guangdong, Fujian, Jiangsu, and Hainan have also set up intellectual property tribunals. Judicial forces dealing with patent disputes in the people’s courts have been strengthened. According to incomplete statistics, by the end of 1995, the relevant courts received nearly 4,000 patent cases, of which over 70% were closed. In 1995, 952 cases were handled as first instance cases. It should be noted that in order to preserve relevant evidence of infringement of the patent, and to prevent the irredeemable losses incurred due to delay, the interested person should appeal directly to the people’s court, requesting it to take provisional measures including injunction, perpetuation, litigation, and deposit.
On 5 July 1995, China issued a provision on the protection of intellectual property rights at the Customs, thus for the first time taking measures to protect intellectual property at the frontier. It is clearly stated in the provision that Chinese Customs can, upon request, or by exercising its powers, investigate and prosecute products with false trademarks, pirated products, pass–off patents, and counterfeited patent products. The Customs has the right to detain, confiscate these type of products, remove tort trademarks, destroy goods infringing upon the copyright, and impose a fine worth the total value of the imported and exported goods. Criminal responsibility will also be investigated and affixed according to the law, if necessary. In the past year, Chinese Customs handled 1,202 cases of infringement, 98% of which were actively disclosed by exercising its power.
Thus one can see that China has not only made laws to protect patent rights, but has also continuously improved its law–enforcement system. On the whole, law enforcement has been good, and the legal rights of the patentee can be effectively and completely protected in China. However, China is the biggest developing country in the world, with a population of 1.2 billion people. Across the nation, cultural, educational, scientific and technological, and economic development are still imbalanced from place to place. Furthermore, public awareness of IF rights is comparatively weak. Therefore, piracy, counterfeiting, and infringing acts take place from time to time. We must make persistent efforts to promote people’s awareness of the protection of the intellectual property, and to fight against infringement, so as to create a legal environment.
The Establishment and Perfecting of the Chinese Patent System
According to the systematic theory, any system is an organic whole composed of several interactive and interdependent parts with their own particular functions. The patent system is also a comprehensive system whose successful operation relies on the regular and coordinated operation of all of its parts. With this in mind, we attached great importance to the establishment of a complete systematic patent framework at the very beginning. Through more than ten years of effort, we have set up 94 administrative authorities and 532 patent agencies, and have trained over 5,000 patent agents. Organizations dealing with patent examination, law enforcement, propaganda, research and teaching, information dissemination, intermediary transfer, and development have also been set up and have started to operate efficiently. All components in the patent system are interrelated and interactive. Experience has proved that this is a successful approach. The remarkable achievements in patent management in China over the past ten years are the result of the efficient operation of the patent system. Undoubtedly, the CPO itself could not have done this without the systematic framework.
China has a vast territory. There is an imbalance in economic development and in the spread of information from region to region. Therefore, the dissemination of the Patent Law has always been an important part of the patent undertaking. However, since the law has been implemented for eleven years, dissemination is no longer restricted to organizing training courses and giving lectures. Additional methods are adopted when they are required by different conditions. We need further study of this question: among which groups of people should knowledge of the law be disseminated? The Chinese patent system emerged from the planned economy and developed at the time of transformation from the old system to the new one. Therefore, the patent system was restricted by the old concepts and the old system. Every step forward calls for arduous effort, and no country in the world can provide a ready example for us to refer to. Under such circumstances, we did not passively wait for the maturity of the market economy. Instead, we made efforts to pave the way for the integration of China’s intermediate economy into the world’s economy. It is important to summarize the results of experience and to use them as guidance for the future. To guarantee the normal operation of the systematic patent framework, each component in the framework is of great importance and is indispensable. However, in the process of building up the patent system, the training of qualified personnel is always a central task. We must also publicize our reform and open policy and IP protection system, and extend the influence of our IP system in international IP circles. In the future we will, with support from the State Education Commission, cooperate with the universities and colleges in training in–service master’s (dual–degree graduates) and doctoral candidates.
To sum up, with the further globalization and liberalization of trade, the role of tariff protection will be further weakened until it is finally reduced to zero. On the contrary, IP protection will become one of the major issues in the development of international economy, trade, science, and technology in the twenty-first century, and will be of concern to all countries. The Chinese government has always attached great importance to the protection of IP. Since China began reforming and opening up, especially in recent years, forceful measures have been taken to continuously improve the legal system for patent protection and the law enforcement framework. As a result, the quality of patent work keeps improving and our patent system follows more closely the trend of international IP development. It is no exaggeration to say that the patent undertaking in China has on the whole come up to the standard of the TRIPS Agreement set for developing countries, and has done so ahead of time. Looking forward to the next century, with deepening of the reform, further opening to the outside world, and establishing of a socialist market economy, the patent undertaking in China will surely develop more quickly, and the Chinese patent system will certainly be further improved.
This speech was delivered at the International Intellectual Property Protection Conference in October 1996 in Hangzhou, People's Republic of China.
Gao Lulin is Commissioner, the Patent Office, People’s Republic of China.
© 1996 Gao Lulin.