Deep & Far Newsletter 2021 ©
The Greater China IP Updates
China Patent Law 4th Amendment – Damages and Rule of Evidence
A significant increase in punitive damages for infringements has been unveiled in the latest amendment which will come into force on June 1, 2020. Infringement with malicious intention will now be punished by up to five times the financial injury. Currently, this would be potentially one of the highest available punitive multiples among major IP countries. Statutory damages have also been raised from RMB 30,000 to RMB 5,000,000 depending on factors above and beyond the standard calculation basis for damages, such as the type of patent or the extent of the infringement. Concerning the rule of evidence, to calculate damages usually means the patentee has to supply documentary materials to the court. Now, as a supplementary measure, the court may order the defendant to present information from their side such as ledgers, or other financial records so as to get a more complete picture of the infringement and damage to the patentee.Also, a lawsuit against an infringer may be filed within three years from the time when the patentee first knows about it, as opposed to two years currently. Likewise, the patentee can now claim for reasonable royalty within three years as opposed to two years previously which will help enforce the invention application’s provisional right after publication but before grant. If these measures become law, China will be a much more supportive place for IP protection in the future.
The Open Licensing System in the Fourth Amendment of China’s Patent Law
According to the provisions of Articles 50 and 51 of the Patent Law, a patentee can declare to the CNIPA that it is willing to license its patent to any entity or individual. There are regulations about the method of payment and royalty rates after which a patent exploitation license will be granted. That license will be a general license not an exclusive one. Currently, in China the rate of transformation is just 30% which is much lower than in developed countries. By establishing an open licensing system, the CNIPA aims to help businesses reduce costs, improve efficiency and clarify interactions between licensor and licensee. One beneficiary is likely to be China’s universities which have a lot of patents but lack experience in developing patents commercially. From this amendment onwards, the open platform can be used by the patentee to publish information and complicated negotiations will be streamlined. An open license statement can be withdrawn later, but it will not revoke any ongoing or effective licenses. Also, under discussion is to reduce or exempt patent annuities for patents used under the open licensing system which will save costs for the patentee. These changes will go into effect on June 1st, 2021.
Hong Kong on track to join Madrid Protocol
Hong Kong is planning to join the international trademark registration system within two years. By aligning closer to international standards, the Hong Kong IP authorities hope to incentivize economic development in the Guangdong – Hong Kong – Macao Greater Bay Area (GBA) Plan. It is expected that the GBA will become a global innovation and technology hub. The HKSAR has committed funds to two InnoHK research clusters with an emphasis on software development for the application of a new wave of green technologies. Under the leadership of Director of Intellectual Property David Wong, various strategies are being put in place such as strengthening IP protection, encouraging innovation and promoting the Hong Kong Green Label Scheme so as to make Hong Kong a leader in the development of green technology. A trademark amendment bill is on the books and that will lead the way to implementing the Madrid Protocol. At the same time, the IP Department is building a dedicated information technology system to process applications and registrations. Applicants can file applications under the Original Grant Patent System, and various training courses and workshops have been set up to help expand awareness.
IPHatch Hong Kong Competition to encourage IP Development
IPHatch Hong Kong is an open innovation competition organized by the Hong Kong Trade Development Council and the IP investment bank Piece Future. It was originally launched in 2018 as part of the Business of Intellectual Property Asia Forum and is now an annual event. The event hosts startups and entrepreneurs to bring new business concepts to fruition with an emphasis on existing IP and technology. This year portfolios from Panasonic and Nokia were opened up for potential development with startups. Last year, Mood Aware Environment, or MAE, a Hong Kong startup was among the winners for its device adapting patented tracking technology which can collect biodata to analyze emotions. MAE’s new product innovation is now under development for commercial launch in 2021. This year’s pandemic crisis has made it apparent that change and challenge can motivate new and necessary developments, and as a city of innovation, Hong Kong is well placed through such events to be a front-runner in IP development in the coming years.