Upping the Ante: New Chinese Law Aims to Encourage Creativity and Innovation

15 September 2009 Publication

Article

By Patricia Wu, Max Lin, and Yan Zhao, Foley & Lardner LLP

This article is part of our September 2009 Special Issue of Legal News: China Quarterly Newsletter, Eye on China.

As China gradually ascends to one of the world’s leaders in economic growth and development, its IP protection regime and policy also have undergone phases of development to adapt to the challenges and demands of an economic environment of increasing globalization. Since the early 1980s, China has made great efforts to establish and reform its IP laws. The most recent revision is the Third Amendment to the Chinese Patent Law. After three draft amendments, the Standing Committee of the 11th National People’s Congress adopted the final version of the Third Amendment to the Chinese Patent Law on December 27, 2008. The new Patent Law, which will go into effect on October 1, 2009, reflects another significant change in China’s IP policy to improve the protection of national as well as international interests for the promotion of innovation and economic development.

The Third Amendment to Chinese Patent Law introduces changes in a number of areas, including the increased standard on patentability, improved IP enforcement protection, the abandonment of the so-called first filing requirement, broadened protection for design patents, and enhanced protection for genetic resources. Read more about these changes in our February 26, 2009 Legal News Alert: http://www.foley.com/publications/pub_detail.aspx?pubid=5766.

This article focuses on the two changes directed toward improving the quality of Chinese patents: absolute novelty standards and conflicting patent applications.

Absolute Novelty Standards
The new Chinese Patent Law adopts the absolute novelty standard to better conform to international patent standards. According to the current Chinese Patent Law standard, other than worldwide publication, only public use or disclosure by other means inside China is novelty destroying. Under the new law, in addition to worldwide publication, public use or disclosure by other means outside China can form a prior art that also destroys novelty. Thus, the new Patent Law has raised the patentability standard to be more compatible with patent laws worldwide.

Conflicting Patent Applications
The definition of “conflicting patent applications” for the purpose of assessing novelty also has been modified in the new Patent Law. Under the current law, a conflicting patent application refers to any patent application filed at the PRC State Intellectual Property Office (SIPO) by any other person (excluding the applicant herself) before, but published after, the filing date of the patent application under examination. Such conflicting application can be cited for novelty rejections but not for obviousness rejections. In the new Patent Law, an application filed at SIPO by anyone (including the applicant herself) before the filing date and published after the filing date can be used as a conflicting application against novelty. In other words, when there are “conflicting patent applications” filed on different dates, the one with the earliest filing date will destroy the novelty of the later one. This revised definition also applies to design applications. However, there is one exception for design patent conflicting applications under the new law. For more information about this exception, view “Quality Control: Design Patent System Reform Under New Chinese Patent Law” in this newsletter: http://www.foley.com/publications/pub_detail.aspx?pubid=6417.

In summary, both of these changes to the new Patent Law amend the “modified” novelty standard under the current law to “absolute” novelty and raise the bar of granting patents. As these new laws are implemented, China’s IP legal system is expected to offer better IP protection and promote innovation to stay competitive globally.

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