New Regulation in Patent Law

China strengthens the interests and rights of patent owners, including punitive damages and provisions on abuse of patent rights. In current judicial practice, due to the non-substantive examination for utility model and design applications, malicious applicants apply for and are eventually granted patents that do not meet patent requirements. These malicious applicants then use their patent to sue the legal patent holders.

The amendments to patent law now put a stop to this practice. “The right to file a patent application and patent law cannot be abused to harm the public interest or legitimate rights and interests of others.” In addition, any abuse of patent rights to exclude or restrict competition leading to monopolies will be punished by China’s Anti-Monopoly Law.

The amount of compensation ranges from one to five times the amount of losses suffered by patent holders, profits made by infringers, or the exploitation fees of a patent under a licence. Previously, the range of compensation was between RMB 10,000 and RMB 1 million. The new amendments increase both the minimum and maximum limits of statutory compensation from RMB 30,000 to RMB 5 million. In addition, patent right holders will be exempted from the burden of proof. In addition, in certain situations, the court may order infringers to provide accounts and materials relating to the infringing activities.

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