China’s new patent law is good news for global innovators

Recent improvements in intellectual property protection make China a great place to innovate, says Adrian Tombling, Patent Attorney at Withers and Rogers LLP.

A recent change to China’s intellectual property laws is helping to position the communist nation as a great place to innovate and a safe trading ground for global innovators.

On 1 October 2009, the National People’s Congress introduced a series of amendments to its IP regime, which was first established in 1985. The changes aim to raise the standard and quality of Chinese patents and bring the law more in line with the TRIPS agreement, established by the World Trade Organisation.

These are positive changes that will make a difference to how China is viewed by innovators and brand owners around the world. In the past, China has been regarded as a high-risk country in intellectual property terms: a culture of copying, combined with ineffective laws, has made it difficult for innovators to penetrate the thriving domestic market. The changes will reposition China as a well-governed marketplace, which is open for business, where home-grown and international innovation is both respected and protected.

One of the key amendments is the introduction of a requirement to demonstrate ‘absolute novelty’ for all patents and designs registered in China. In the past, only local novelty mattered and it was possible for inventions and designs developed elsewhere in the world to be copied and protected in China by unscrupulous third parties, as long as the invention or design had not been published anywhere.

Beijing-based Stephen Yang, a Chinese patent attorney at Peksung Intellectual Property Ltd, recently visited us at Withers & Rogers to raise awareness of the importance of the changes. He said that the move puts China’s patent regime, “On a footing with others internationally,” and is good news for all innovators, including those in China, because they, “Need real patents that are credible and deliver protection comparable to that found in other parts of the world.”

Under the new law, the amount of statutory damages payable by infringers of patents, trade marks and designs has been doubled to RMB 1 million (€100,000). In addition, where it is possible to provide evidence demonstrating the actual damage caused by the infringing act, the amount of damages can be much higher. In the past year, the Chinese courts have awarded multi million dollar damages where evidence was provided demonstrating the actual damage caused.

Previously, China’s IP regime lacked teeth, and damages awarded for infringement were low. The new regime is much tougher, reflecting the importance that is now placed on protecting Chinese innovation and trading on a level playing field with the rest of the world. Patent-holders and brand owners in Europe will be reassured that bringing their products or services to market in China will in future carry fewer risks, and infringement activity can be punished.