Patents

Basic Information  |  Enforcement  |  Documents Needed to File Patent Application

ENFORCEMENT

What Constitutes Patent Infringement
According to the Chinese Patent Law, an undertaking or individual is liable for patent infringement (patent for invention or utility model) if he commits, without authorization of the patentee and for business purpose, any of the following acts:

• making, using, offering to sell, selling or importing the patented product
• using the patented process
• using, offering to sell, selling or importing the product directly obtained by the patented process

An undertaking or individual is liable for design patent infringement if he commits, without authorization of the patentee and for business purpose, any of the following acts:

• making, selling or importing the product incorporating the patented design.

Civil Remedies for Patent Infringement
The statutory civil remedies for patent infringement include:

• cessation of infringement (permanent injunction)
• compensation for damages
• elimination of ill effects
• court costs.

The amount of compensation for damages caused by the infringement of the patent right shall be assessed on the basis of the losses suffered by the patentee or the profits earned by the infringer. If it is difficult to determine the losses that the patentee has suffered or the profits that the infringer has earned, the amount may be assessed by reference to the appropriate multiples of the amount of the exploitation fee of that patent under contractual license.

Criminal Liability
Counterfeiting or passing off the patent of another is, if the circumstances are serious, a criminal offense. The offender shall be subject to a maximum of three year's imprisonment or criminal detention and shall also, or shall only be fined.

Available Enforcement Procedures

Administrative Action
The Administrative Authority for Patent Affairs (AAPA)

The Administrative Authority for Patent Affairs (AAPA), as a matter of fact, are the departments established pursuant to the Patent Law under the local governments in all provinces, autonomous regions, municipalities and certain big cities. AAPA is empowered to administer patent affairs and handle patent disputes in the area of their jurisdiction. AAPA are not branches of the Patent Office and do not accept patent applications. It has the power to order the infringer to stop the infringing act if it considers that infringement is established. If the infringer or infringed is not satisfied with the order, he/it may, within 15 days from the date of receipt of the notification of the order, institutes legal proceedings in court. It is important that if the infringed wants damages, he/it must institute legal proceedings in a court having jurisdiction.

Court Action
Court System: China's judicial system is composed of courts at four levels, i.e. the basic court at county level, the intermediate court at city and prefecture level, the higher court at provincial level and the Supreme Court - the highest court of the country. Patent infringement case is dealt with at the level of Intermediate court.
The judgment or decision of the court of first instance (intermediate court) can only be appealed once to the court at one level higher.

Jurisdictions and Choice of Venue: According to the Judicial Interpretation of the Supreme Court, only those intermediate courts designated by the Supreme Court ( 47 out of more than 400, all over the country) have jurisdiction over patent infringement litigation. A patentee or an exclusive licensee may have a limited choice among those designated intermediate courts,, between the court at the place of the infringer's domicile or the court at the place where the infringement took place.

Statutory Limitation: The statutory limitation for instituting legal proceedings concerning the infringement of patent right is two years counted from the date on which the patentee or any interested party obtains or should have obtained knowledge of the infringing act.

For successive infringing act, however, the patentee may still be allowed to bring a lawsuit to courts after the two years time limit expires and ask the infringer to stop infringing acts and compensate for the damages according to the judicial interpretation of the Supreme Court. In such a case, the damages may not include that suffered by the infringed more than two years prior to the date of suit.

Preliminary Injunction: Where any patentee or interested party has evidence to prove that someone is infringing or will soon infringe its or his patent right and that if such infringing act is not checked or prevented from occurring in time, it is likely to cause irreparable harm to it or him, it or he may, before any legal proceedings are instituted, request the Court to order the alleged infringer to suspend relevant (infringing) acts and to adopt measures for the preservation of property.

Burden of Proof: The party who makes the claim bears the burden of proof. Generally, the plaintiff should bear the burden of proof in patent infringement case.
However, the burden of proof will be reversed if the litigation concerns a process patent for the manufacturing of a new product filed after January 1, 1993. In such a case, the burden of proof will be born by the defendant who should present evidence proving that his or its product is different from the patented process if the defendant denies the accusation.

If the litigation concerns a process patent filed before January 1 1993, the burden of proof will be born by the defendant who should present evidence proving what process he or it used for manufacturing the accused product.

If the infringement relates to a patent for utility model, the court or AAPA may ask the patentee to furnish a search report made by the Chinese Patent Office.

Appeal: In China, the court of the second instance is the final instance. Therefore, the judgment or decision of the court of first instance can be appealed to the court at one lever higher. The statutory time limit for an appeal is 30 days from the date on which the written judgment or decision is served if both or one party is foreign-related.