Deep & Far Newsletter 2021 ©
Jun (2)

The Greater China Intellectual Property Updates

 By Lyndon 


Guidelines for the Enforcement of Intellectual Property Rights Decisions in China

Details about enforcement of IPR-related civil and administrative cases have been issued in recent months by the Supreme Peopleˇ¦s Court of the PRC.  Firstly, when enforcement of a decision may be difficult, the opposing party may apply for preservation of that partyˇ¦s property or for a court order to compel that party to take any necessary action to achieve the same.  The applicant will need to provide a security to make the petition valid, and the court can also order preservation measures on its own if necessary.  If a decision by a foreign party needs recognition in China, they may petition the peopleˇ¦s court for recognition and enforcement.  If any interested party believes the enforcement is in violation of the law, they may submit a written objection which will be reviewed by the court within 15 days.  Secondly, regarding enforcement procedures for IPR administrative cases, a peopleˇ¦s court will apply the relevant civil enforcement provisions.


CNIPA Issues New Measures against Abnormal Patent Filing Behaviors

It has come to the attention of the China National Intellectual Property Administration (CNIPA) that there is still a significant number of abnormal and low standard patent filing behaviors in China.  To crack down, CNIPA released a Draft Amendment to Several Provisions Regarding the Regulation of Patent Applications in early May, 2021.  In Article 3 of the amendment, 9 types of abnormal behavior were defined as follows:

1. Where several patent applications are identical or are different combinations of the same elements.
Where the patent application contains made-up or falsified data or technical effects or is a patchwork of prior arts.
Where the contents of multiple patent applications as filed are primarily randomly generated by computer programs.
Where the content of an application is inconsistent with the idea of technical improvement.
Where the content of an application is inconsistent with the applicants actual research capabilities.
Where multiple patent applications related to one entity or individual are separately filed in a malicious manner.
Where the right to apply for a patent is transferred out or in for improper reasons.
Where the patent agency or any other institution or individuals represent, induce, abet or assist others in conducting any abnormal patent filing behaviors.
Any other abnormal patent filing behavior in violation of the principle of good faith and disturbing the normal order of patent work.

It is likely that there will be some adjustments and more precise language inserted into the final form of these provisions after public consultations.  There is also the likelihood that abusers of the abovementioned acts may face criminal liability according to the law.


Commercialization of Patents Increasing in China

In 2020 the commercialization rate of valid invention patents reached 34.7%.  Recent figures show China has sustained a rate above 30% for the past 5 years according to the 2020 China Patent Investigation Report issued by China National Intellectual Property Administration.  Three trends stood out: patent transfer and commercialization have continued to advance, increased patent protection has stimulated business activity, and patentees themselves have increased their investments in Research and Development.  The report introduced the concept of the Patent Transfer and Transformation Index (PTI).  The PTI, using 50 as a threshold, refers to a weighted sum of data such as patent industrialization rate, licensing rate, transfer rate, export amount of IP royalties and amount of financing through patent pledging.  Chinaˇ¦s PTI was 54.7 in 2020, indicating an expansion of patent transfer and transformation.  Below 50 would indicate a contraction.  When polled about expectations for future revenue derived from their patents, 49.5% of companies forecasted an increase, 45.5% expected revenue to stay flat and only 5% of companies forecasted a decline.  Part of the reason for the optimism, besides the stronger IP protection environment in recent years, is the increase in investment in R&D.  In 2020, 16.5% of valid invention patents received R&D investments of more than 1 million yuan up 4.4% year on year.


Beijing Chosen as National Base for International Intellectual Property Cooperation

Beijing has established an international cooperation base for IP cooperation.  The pilot project was inaugurated in April, 2021, in order to bring into play Beijingˇ¦s role as an international innovation center with its rich resources and numerous enterprises that are strong on IP.  At the ceremony, the Plan for Promoting Strategic Intellectual Property Cooperation (2021-2023) was signed between the Beijing IP Office and the Beijing Patent Examination Cooperation Center under CNIPA.  The intention behind the establishment of the base is to make more efficient use of local resources based on the actual demands of the country as it pertains to IP work.  In that way, the international development of major players in the market as well as IP-related international cooperation could be enhanced.