Commerce Ministry organises seminar on intellectual property

The Ministry of Commerce and Industry organised yesterday a workshop entitled ‘Patents and Registration Procedures’ with the participation of a number of intellectual property agents and interested members of the public.

The workshop comes within the framework of the Ministry’s efforts to protect and promote intellectual property rights, and to raise awareness among intellectual property agents and the public about the importance of registering and protecting patents against infringement by registering them at the concerned department at the Ministry. The workshop also shed light on how to register a patent electronically.

The event, attended by a number of experts from the Ministry, featured several topics including a general introduction to patents, the content of the patent application, and procedures relating to the registration of a patent application through the electronic registration system. The workshop concluded with a Q&A session during which experts from the Ministry answered questions regarding patents.

Patent law developments in China

From last year, with the improvement of China’s industrial technological level, as well as tremendous changes in the international competitive environment, China’s patent protection system and patent protection practices were also changed and adapted to the same. With an imminent drug patent link system, patent application ability is being continuously improved, the patent judicial protection system is being further perfected, the amount of infringement compensation has obviously risen, and the punitive damage standard of deliberate infringement is being strongly supported.

The number of patent litigation cases has increased significantly. In 2017, Chinese courts received 213,480 first-instance intellectual property (IP) cases and closed 202,970 cases in total, a rise of 46.04% and 43.13%, respectively from 2016, in which 16,044 cases related to patent rights. In the same period, the IP courts in Beijing, Shanghai and Guangzhou accepted a total of 26,698 IP rights (IPR) cases in the first and second instances, and concluded 22,631 cases. Beijing Intellectual Property Court accepted 1,161 patent administrative litigation cases, an increase of 5.2% on the same period the previous year, and closed 753 cases, an increase of 27.2% on the previous year.

With a tremendous scale in creation and application of various types of IPR, and enhanced values of some IPR, there are IP disputes that are prone to occur frequently, while the supply side of non-litigation dispute resolution mechanisms is insufficient, so that the rigid demand for judicial protection is continuously on the rise.

The IP tribunals have been successively founded to make the patent judicial trials more specialized. After the Supreme People’s Court (SPC) summarized and promoted the practical experience of IP courts in Beijing, Shanghai and Guangzhou last year, the establishment of IP-specialized trial tribunals was approved for cross-regional jurisdiction in 11 cities including Nanjing, Suzhou, Wuhan, Chengdu, Hangzhou, Ningbo, Hefei, Fuzhou, Jinan, Qingdao and Shenzhen to enhance the unification of standards, scales and quality of verdict, and provide better verdict guidelines for the creation and application of IP.

The technical investigator system has been introduced in patent litigation to make patent infringement litigation trials more specialized. In patent case trials, the court often needs to identify a number of technical facts, and conduct in-depth research and comparison of technical solutions. Overcoming complex technical obstacles in the identification of facts is a key point that has long affected enhancement of the quality and efficiency of trials.

In response to this problem, Chinese courts explored establishing a system where technical investigators neutrally perform duties to assist in the trial, and appointed a number of technical investigators from multiple channels such as enterprises and institutions, universities, scientific research institutions, national patent agencies, and patent agent associations. Thus, the “four-in-one” mechanism was jointly participated in by professional people’s jurors, technical investigators and expert assistants, and judicial appraisal agencies for identifying technical facts were constructed to assist judges in cracking technical doubts and clearing technical obstacles to an impartial trial.

The patent link system has been established in view of the fact that patent infringement litigations taking place during the listing approvals of drugs will have certain impact on the approval of generic drugs. In view of the fact that drugs in the process of listing approval may not be examined for patent infringement, drug research enterprises have to resort to legal means to restrain infringements after the listing of drugs by a competitor. However, restricted by the drawbacks of small infringement damage amounts and difficult enforcement under the current patent system in China, such right protections are usually almost in vain.

As stipulated in the Opinions on Deepening the Reform of the Review and Approval System to Encourage the Innovation of Drugs and Medical Instruments issued by the central government, in order to protect the legitimate rights and interests of patentees, reduce the patent infringement risks of generic drugs, and encourage the development of generic drugs, the establishment of a drug review and approval, and drug patent link system, was explored. When an applicant for drug registration submits an application for registration, the applicant must state the relevant patent involved as well as its ownership status, and notify the relevant drug patentee within the specified time limit.

Where there is a dispute over the patent right, the parties concerned may file a lawsuit with the court without aborting the technical review of the drugs during the period. For drugs that have passed technical review, the Food and Drug Supervision Department should make a decision on whether to approve the listing according to the court’s effective judgment, ruling or mediation.

If the effective judgment, ruling or mediation is not obtained within a certain time limit, the Food and Drug Supervision Department may approve the listing. According to the above-mentioned provisions, after the receipt of the notification from the drug listing applicant, the relevant drug patentee who believes that its patent right has been infringed may bring a patent infringement lawsuit to the judicial authority, which to a large extent discourages the generic drug manufacturer to employ the “Bolar case exception” to apply for drug listing before the drug administration department. The establishment and improvement of the drug patent link system may also significantly reduce the time for the drug patent expiration and the drug listing in the near future.

The patent infringement compensation system has been further perfected, which greatly enhances compensation amounts. There are always problems such as difficult investigations and evidence collection, and low amounts of compensation in patent infringement. According to the current patent law, the compensation first follows the “bridge principle”, which is to bridge all the losses of the patentee, and is not punitive to the infringer.

The revised patent law is expected to stipulate that, where the patent right is intentionally infringed, the court may raise the amount of compensation to a maximum of three times, according to the circumstances, scale and damage incurred. As long as the patentee can prove that the competitor is present with intentional infringement (for example the competitor has infringed once and lost the case), a punitive damage judgment may be made against the infringer.

The people’s court may determine the amount of compensation to be more than double and less than three times, based on the above-mentioned method, according to the circumstances, scale and damages incurred from the infringement.

The amount of compensation should also include the reasonable expenses of the rights holder incurred for stopping the infringing act. The amount of compensation should also include reasonable expenses paid by the rights holder to restrain the infringement act.

The Patent Infringement Guidelines (2017), issued by Beijing Higher People’s Court, combine practical needs with the idea of punitive damages for “malicious infringement” behaviour.

The guidelines set out that, where it pertains to malicious infringement, it is possible to support the plaintiff’s appeal within the statutory compensation limit, or determine the amount of compensation at a higher level.

In the judicial practice of patent infringement litigation, compensation for damages to the patentee has increased substantially. For example, in the case of Beijing Watchdata System Company v Hengbao Co Ltd for the infringement of patent rights, Beijing Intellectual Property Court judged that the defendant be compensated for economic losses of RMB49 million (US$7.1 million) and legal fees of RMB1 million, which is the highest amount of damages ever judged since the establishment of the court, and for the first time explicitly supports the time charges of an attorney in the judgment.

Also, in the case of LG v NEC Corporation for the patent for invention titled “Spindle Motor”, Beijing Intellectual Property Court supported the right holder’s compensation request and reasonable expenditure of nearly RMB4 million. In Qingdao, CO-NELE’s case for the patent for a utility model titled “high-efficiency transmission device for planetary stirrer”, supported the rights holder’s compensation request and reasonable expenditure of RMB3.6 million.

In the application of statutory compensation cases, a discretionary compensation mechanism that conforms to the law of the market and meets the requirements for protection of patent rights has been gradually established, so that the amount of compensation for damages matches the market value of the patent right, so as to adapt to the contribution rate of the patent right to the profit of the infringement behaviour.

Exploding the myth of patent tardiness

The Indian IP system is continuously being criticised in the global media and in the IP world as being slow to grant/ register IP rights; to some extent even the local IP counsels and professionals add fuel to this In various platforms it has often been stated that the delay in the grant of patents in India is often a deal breaker for a lot of companies.

This is the image that has been created and the purpose of this article is to clear the fog and provide a clear picture. In the past few years, particularly after the digitising process, the Indian IP office is one of the more sophisticated IP offices in the world. It is among the few IP offices in the world which offers 100% digitisation of every process including video conferencing of hearings. Furthermore, one of the attributes of Indian IP offices is that the filing for registration of a trade mark, copyright, patent and design applications, can be done 24×7 on any day of the week. In order to improve efficiency there are four autonomous Patent Offices and five Trade Mark Registries in India which are exclusive in itself. The best talents are being hired by the Patent and Trade Mark offices for the examination process and I have had the unique privilege to train some of these talented individuals. There have been recent discussions regarding lackadaisical working of the Indian IP offices but I would like to throw light on the Indian IP offices expediting the internal examination process for speedy grant/registration of IP rights.

A Patent Application was filed on 15thNovember, 2016 for “A Process for Preparation of Quinophthalone” bearing application No. 201621038962. An application for expedited examination of the patent application was filed on 27th May, 2017. After the substantial examination of the application, the first examination report was issued, the response to which was filed by us promptly. The Application straight forward proceeded to grant and on 8th December i.e. the patent was granted in less than 13 months from the date of filing. This clearly debunks the myth that grant of patents in India are delayed. It is necessary to note that one of the major reasons for the patent application moving forward were the well drafted patent claims, the proper representation of invention disclosed therein and a quick and proper response to the Examination Report. Therefore, if the inventors and their consultants also ensure that their drafts unequivocally disclose the invention in the application, draft comprehensible claims, submit a proper response to the Examination Report issued by the Examiner there is a high possibility of the patent application being granted by the Controller in a year.

The Indian Patent Office, in recent times has ramped up its activities for instance; it has hired more patent examiners, is providing notifications regarding any formal defects in the application/patent compliance via e-mail to applicant of patent applications, patentees and patent agents and expediting the examination process of patent applications etc.

Furthermore, it is interesting to note that apart from the Patent Applications even Trade Mark applications have started moving forward expeditiously. For example we filed trade mark application No. 3496744 for the mark ‘Apodis’, in class 43, in March 2017 and the same was granted registration in September, 2017 i.e. within 6-7 months the trade mark was registered. This time period includes the 4 months statutory period of publication of the trade mark in the journal which allows third parties to file an opposition if the advertised trade mark is similar to their trade mark. We had taken care of all the formalities such as conducting a thorough search for the trade mark, filing the form of authorisation, submitting services specification approved by the Indian Trade Marks Office, to ensure a speedy grant of the registration.

Similarly, the Designs office has also in recent times granted Design registrations within a period of 2-3 months if the application is in order, for instance we filed Design No. 294922 for floor cloth on 21st June, 2017 and the certificate of registration for the same was issued on 25th August, 2017. Therefore, within a period of 2 months we were successful in obtaining design registration for our client.

It is fair to state that the Indian IP offices are adhering to the time lines specified in the respective statutes, which is a step in the positive direction and should encourage more Universities, individuals, Start-Ups, Corporates to file patent and trade mark applications in India. It is necessary in such times to give credit to the patent and trade mark Examiners when it’s due. This will also help in boosting the confidence of the individuals involved in the process as well and dispel the myth of tardiness that surrounds the Indian IP scene.