IP Newsletter Issue 31 (2019-01-10)
 
A State Council executive meeting approved a draft amendment to the Patent Law, further strengthening the protection of intellectual property rights (IPR)

The State Council held an executive meeting on December 5 and approved “Draft Amendment to the Patent Law of the People's Republic of China”, which further strengthens the protection of intellectual property rights (IPR) and effectively combats infringement.

According to the draft, for willful patent rights infringement, the People's Court may impose a maximum compensation of five million RMB.

The current Patent Law does not clearly specify the amount of compensation for patent rights infringement, but only points out that the amount of compensation should be determined rationally according to the actual losses that the right holder suffered as a result of the infringement, with reference to the multiple of the patent licensing fee. If it is difficult to determine the losses of the right holder or the interests gained by the infringer, the compensation should be rationally determined with reference to the multiple of the patent licensing fee. The newly revised draft stipulates that for willful patent infringement, the People's Court may, on the basis of the circumstances of the infringement, the scale of the infringement, the consequences of the damage and other factors, impose a compensation with the amount between one and three times of a fixed amount.

If it is difficult to determine the losses of the right holder, the interests gained by the infringer and the patent licensing fee, the People's Court may impose a compensation of more than one hundred thousand RMB but less than five million RMB, while under the current law, the compensation for such circumstance only above ten thousand RMB and below one million RMB.

In recent years, e-commerce has become an infringement "disaster area". In particular, the draft stipulates that Internet service providers who are aware or should be aware that the network users use the Internet services provided by them to infringe patent rights or counterfeit patents failing to promptly take necessary measures (such as deleting, blocking or disconnecting the links of infringing products, and so on) to stop such infringements shall bear joint liabilities with such network users. The patent administration department shall notify the network service provider to take the necessary measures mentioned in paragraph 1 of this article to stop such infringement when it determines that a network user infringes the patent right or counterfeits a patent by using the network service, and the network service provider shall bear joint liabilities with the network user for the expanded portion of the damage if it fails to take necessary measures in time.

The draft also stipulates that the patent administration department may mediate the amount of the compensation for infringement in response to the request from the parties involved; if the mediation fails, the parties involved may institute legal proceedings to the People's Court. If one party of the mediation refuses to perform or fails to fully perform the compensation, the other party may apply for compulsory execution.