By Kevin E. Noonan --
The recent changes in Chinese patent law have not received universal approval from a number of Western groups. Two of these, the Intellectual Property Owners Association (IPO) and the Biotechnology Industry Organization, have taken different tacks to the same end: disapproval of changes seen as harming their members' interests.
Last October, the IPO sent a letter from President Steven W. Miller to the Legal Working Committee of the National People's Congress outlining the group's concerns. The tone is a positive one, beginning with an affirmation of IPO's interests in intellectual property and its protection, including member filings in China. It also mentions the group's commitment to patent harmonization, and that its comments on the proposed changes to Chinese patent law are made in that spirit of international cooperation.
That said, the IPO's letter points out features of the proposed changes that the group believes are inconsistent with these principles. Specifically, IPO's letter counsels that compulsory licensing should be avoided, or at most, to limit those situations under which compulsory licenses are granted. Acceptable conditions for granting compulsory licenses would include patents in violation of the Chinese Anti-Monopoly law (but only after a such a violation was established by an administrative or judicial process), or in a national emergency rising to the level of "an extraordinary state of affairs resulting in extreme urgency." Under these circumstances, "public non-commercial use" should be either by or for the government.
The IPO also believes that the provisions on genetic resources are premature in view of a lack of international consensus on the issue. The proposed new law also contains "undefined terms" and broad language "inconsistent with similar . . . provisions adopted by other countries or international treaties." The IPO voiced its opposition to requirements for "special disclosure requirements" and suggests contractual alternatives. The letter further recommends implementation of provisions of the U.N. Convention on Biological Diversity including databases to "ensure availability of information about prior art."
Finally, the IPO recommends clarifying the time limits under which security/secrecy examination must be completed to permit an applicant from filing an application abroad for an invention "completed in China." The IPO's letter also recommends that the law be changed to provide a "clear definition of when an invention . . . is . . . completed in China."
In an Addendum, the IPO also recommended that China adopt provisions relating to "indirect infringement," provisions for exploitation fees for patents involved in standards, limiting statutory damages to state-owned entities (and leaving the amount of damages from infringement between private parties to be determined between the parties), and provisions such as those in Japan and elsewhere that permit an invention to be considered novel if an application is filed within 6 months after disclosure at an international exhibition, and academic or technological conference or disclosed without the inventor or assignee's consent. The IPO also suggests that China adopt a form of the Doctrine of Equivalents, and that invalidity determinations be confined to the Re-examination Board of SIPO instead of the courts.
BIO sent its letter to Jennifer Choe Groves, Director for Intellectual Property and Innovation and Chair, Special Section 301 Committee of the Office of the U.S. Trade Representative. In its letter, BIO recommends that the USTR maintain China on its Priority Watch List. The bases include increased trafficking in counterfeit pharmaceuticals and deficiencies in judicial mechanisms for enforcing intellectual property protection in China. Included in these reasons, BIO cites provisions of the proposed changed Chinese patent law including restrictions on exploitation of genetic resources and provisions for compulsory licensing. Finally, BIO objects to the provisions of the law analogous to the Bolar amendment that excludes from infringement liability activities related to obtaining regulatory approval for pharmaceutical products without concomitant provisions for extending patent term to compensate for regulatory approval delay. A similar letter was sent to Kimberly Halamar of the U.S. Counsel for International Business.
Despite these sentiments, China's National People's Congress enacted the proposed changes to Chinese patent law on December 29, 2008 (see "Changes in Chinese Patent Law Adopted").
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