China started to build a patent system as late as mid 80's and already now it is fighting to become the number one venue for IP holders to protect their rights. The 4th Amendment of the Chinese patent law may be implemented in 2019 bringing bigger fines for patent violators, solving difficulties in collecting evidence in litigations and clarifying online IP infringements.
First version of the Chinese patent law was introduced on 1984 and the development has been strong since. The last amendment was conducted in 2008.
On December 2018 the draft of the 4th Amendent was approved and submitted to National People's Congress for review. Draft Amendment was published on January 4th, 2019.
One of the most discussed challenges in IP litigations in China has been the low fines for violators in the past. In the 4th Amendment the matter is tackled, at least to the right direction. In wilful infringement of patent the damages may be determined to be up to five times the the calculated loss suffered by the patent holder.
In a situation where the damages to the patent holder cannot be determined, the fine range will be from 100 000 Yuan (14 000€) to 5 000 000 Yuan (650 000€). Currently the fine rate is from 10 000 Yuan (1300€) to 1 000 000 Yuan (130 000€). NOTE: in addition to the fine ranges above, the damages awarded by Chinese courts have increased in the last few years exceeding 80 000 000 Yuan (10 000 000€) in a case between Huawei and Samsung.
Other reported amendments include infringers obligation to provide evidence materials and books ordered by the courts for determing the amount of damages, and online IP infringement, where an internet service provider may be held jointly liable for infringement.
The 4th Amendment is expected to be passed or even implemented during 2019. The amendment continues China's quest to make IP stronger in China with efforts to protect patent owners better.
Tuomas Matila is a patent attorney working in Berggren Brokerage helping patent holders to find buyers for patents. During the past years he has seen a significant growth in demand for Chinese patents by Chinese and foreign companies operating in China, but also for European and US patents by Chinese companies expanding to new territories. Tuomas has special interest in exploiting the opportunities in China and has direct contacts to many large companies there.