The Greater China IP Updates

 By Lyndon 

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CNIPA issues the Measures for Administrative Adjudication of Major Patent Infringement Disputes

The China National Intellectual Property Administration issued the Measures for Administrative Adjudication of Major Patent Infringement Disputes on May 28^th, 2021.  One of the measures concerns the content of the major patent infringement disputes and the conditions for asking for administrative adjudication.  The circumstances given include those relating to major public interest, those that seriously affect the development of the industry, a major case that involves cross-provincial administrative areas, and other patent infringement disputes that may cause major impacts.  Administrative adjudication will be granted under the following conditions: the person filing must be the patentee or interested party, there must be clarity concerning the persons involved and the facts and reasons, and the Peopleˇ¦s Court has not put the subject patent infringement on their trial docket.

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Interpretation of the Supreme Peopleˇ¦s Court of China on the Application of Punitive Damages in Civil Cases Deriving from Intellectual Property Rights Infringements

Both the Copyright Law and the Trademark Law of the Peopleˇ¦s Republic of China have articles concerning compensation for intentional and malicious infringement of anotherˇ¦s intellectual property.  The interpretation also has provisions determining such aspects as the intentional, the seriousness of the circumstances and the calculated basis and multiples of punitive damages.  For the intentional aspect, the court looks at the object types of the infringed rights, the current status of the rights, the popularity of the relevant products, and the relationship between the defendant and the plaintiff or interested party.  When determining the seriousness of the circumstances for infringement, the court will consider the means and rate of infringement, the duration, territory, scale and results of the infringing acts, and the actions of the infringer in the proceedings.  Finally, the determination of a calculated basis and multiples will take into account the amount of actual losses of the plaintiff together with the amount of illegal earnings of the defendant.  If the above-mentioned amount is difficult to calculate, the court shall determine the amount by reference to the multiples of the amount of the exploitation fee of the rights under a contractual license, and use that as the calculated basis of the amount of punitive damages.

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The Utility Model System in China

According to the CNIPA, there were 2.27 million utility model applications filed in 2019, compared to 1.40 million invention patents.  Other countries have a much lower ratio, so why is it so much more popular in China?  Utility model applications donˇ¦t undergo a substantive examination, so the chance of an application being granted is high at 75%.  Because of the less stringent examination, the process of a utility model application is also granted at an average of 7 months compared to 3 years for an invention patent application.  Also, a utility model receives about the same level of protection as an invention patent in terms of infringement damage cases.  In China, compared to other major economies, there arenˇ¦t many limitations on the enforcement of utility model patents.  One thing to note is that utility model patents only protect inventions related to the shape or structure of a product, but not methods or processes.  Another attractive feature in China is the dual application aspect.  One can file an invention patent application and a utility model application at the same time for the same invention.  The applicant can benefit from the swift processing of the utility model to obtain protection, and then later when the patent application is granted, a longer lasting protection will ensue.  However, by international standards, some of the utility model patents are somewhat low standard.  To overcome the drawbacks, CNIPA has established a process of checking utility model applications for novelty by using AI programs to sift through prior art data which has proven helpful to examiners.  Also, for dual applications, the timing of the examination of the invention patent will be postponed which has forced inventors to reconsider the wisdom of using the dual application method.  Nonetheless a utility model patent has its advantages, and foreign applicants who prefer a faster grant albeit with a shorter protection period (10 years as opposed to 20 years for invention patents) might choose to consider it.

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Chinaˇ¦s IP Statistics for 1^st six months of 2021

In the first half of the year, 339,000 invention patents, 1,327,000 utility model patents and 393,000 industrial design patents were granted in China.  Also, 28,400 patent reexamination cases and 4,300 invalidation cases were concluded.  Currently, there are a total of 3,324,000 million valid invention patents in China, of which 2,454,000 are from domestic applicants.  33,300 PCT international patent applications have been accepted in total. 

Regarding trademarks, 3,724,000 trademarks were registered in the first half of the year, and there were 82,000 trademark opposition cases and 188,000 trademark review cases in the same time period.  There are a total of 33,548,000 valid registered trademarks currently with 2,954 applications for the Madrid International Trademark Registration.

In the Geographical Indications category, a total of 2,478 GI protection products have been identified, 6339 GIs have been approved as collective trademarks and certification trademarks and 12,789 market entities have been certified to use GIs.

In the first half of the year, the national patent and trademark pledge financing amounted to 107.4 billion yuan, up 25.9%.  The number of pledge projects was 6,195, up 32.4%.

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