This is a follow up to my last blog post which you can read here. Then, I discussed the major direction of the proposed revisions to the Chinese Patent Law which include the potential for better compensation and evidence gathering for your business. I now focus on how the proposed changes to patent administrative enforcement could affect small businesses in China.
Before we begin, let’s have a brief look at the current administrative enforcement situation for patents in China. Please note that patents in China include design patents, which are equivalent to Registered Community Designs in Europe- they protect the combinations of colour, shape and/or patterns which make your design aesthetically pleasing.
Put simply, at present administrative enforcement of patents in China is weak when compared to registered trade marks.
For registered trade marks, administrative enforcement actions include confiscating goods and imposing fines once infringement is determined by the trade mark administration even if the alleged infringer disagrees. To suspend the enforcement of decisions made by the trade mark administration, the alleged infringer must file a law suit against the trade mark administration within 15 days from the date of receipt of the decision. Administrative enforcement therefore provides a quick and cheap way for you to protect your trade marked goods.
By contrast, for patents, although patent administration can still determine whether infringement has occurred, the patent administration will suspend their decisions if the alleged infringer disagrees, regardless of whatever arguments and/or evidence are presented. In such a situation the patent administration cannot confiscate goods and impose fines, but can only mediate. As most of the time the alleged infringer would disagree that infringement has occurred (either genuinely or because disagreeing will mean goods confiscation and fines will not be imposed), this makes administrative enforcements of patents in China relatively toothless at present.
The proposed revision of the Chinese Patent Law aims to strengthen administrative enforcements of patents in China to parallel those of trade marks. Specifically, the revision tries to enable the patent administration to enforce their decisions even if the alleged infringer disagrees. Unless the alleged files a law suit against the patent administration, the administration would be able to confiscate goods and impose fines.
Are these revisions good news for your business though? There are various issues to be considered:
- Would the patent administration have sufficient expertise to determine complex infringement of invention patents and utility models? My view is that this is very unlikely; these are generally more complicated than trade mark infringements. This may however work for design patents, in which direct visual comparison is involved to determine infringement.
- Would such pro-patentee measures encourage patent trolls (‘businesses’ who patent technologies and then aggressively accuse others of infringing that patent to make profits from the lawsuit) to be more active in China? It is very likely as administration enforcement is a cheap and fast means of enforcing one’s IP rights, and the results and evidence collected could be used in subsequent civil actions. Unless substantial major mistakes were found to have been made during the decision making process, the legitimacy of such results usually are not (sometimes even could not) be challenged at the People’s Courts level. It would be entirely possible for a European or other foreign business to be put in the position where a patent troll accuses them of infringement and they have only 15 days to file against the patent administration. Typically, by the time a foreign business is notified of the infringement decision, the 15 days have already passed, leaving them with no way to counter the administrative enforcement. This revision could therefore become a major plus for patent trolls to enforce their patent rights against various companies in China.
Considering these factors, I am of the view that in future revisions, strengthening of patent administration enforcement may focus on design patents only. This would provide a quicker and cheaper way for design businesses in particular to enforce their rights in China and a tactic well worth incorporating into their IP strategy.
What do you think?