China: Patent laws and regulations 2020
On 20 June 2020, the Standing Committee of the National People’s Congress (NPC) published its 2020 version of draft amendments to the Patent Law (2020 version) for comment. Millions of opinions were collected in the 15 months since last year’s (2019) version of draft amendments. So, what are the main changes in this draft, and what are the reasons behind these changes?
(1) Compensation for the protection period of patent right. The 2020 version proposes compensation for the protection period of patent right. Its article 42 includes two aspects – compensation for unreasonable delay of prosecution progress, and compensation for the administrative examination for a new drug.
The former aspect is new. According to this article, applicants have the right to request an extended protection period for their patent when the patent takes them four years after the application date, or three years after the date of substantive examination request, unless the delay is caused by the applicants themselves. This provision offers compensation for unduly long prosecution.
Nowadays, a patentee may receive an invention patent only about 22 months on average after filing the application, thanks to the long-term effort of the China National Intellectual Property Administration (CNIPA). That’s also a reason why the legislature proposes a compensation in the draft – if it takes 48 months to grant an invention patent in the context of the average 22-month prosecution cycle, it might be wrong.
This change may also spur the CNIPA to keep the prosecution cycle constantly shorter than four years, because the CNIPA would not want to receive millions of compensation requests for unreasonable prosecution time.
The latter aspect was introduced in the 2019 version, but several changes have been included this time. It is well understood that a new drug would take a long time to be approved for marketing. However, generic drug companies may use quality and efficacy-related data of the original drug through the consistency evaluation system to greatly save the review and marketing time for their generic products. This is unfair to pharmaceutical companies that made the original drug, and that do the innovative research.
In the 2019 version, the compensation was only allowed to those drug patents that requested both domestic and foreign marketing, which means that compensation was not available if the new drug was only for the Chinese market. The 2020 version removes this restriction, which means a foreign marketing request is not necessary.
Second, the term has been changed from “innovative drug” to “new drug”. The literal meaning implies the compensation may be awarded to not only innovative drugs, but also those new drugs that are improved based on some original drugs. Finally, the extended protection period shall not exceed five years, and the total protection period shall not exceed 14 years from approval for marketing.
(2) Early-stage dispute resolution mechanism for drug patents. In the past, the patent owner of a drug had less to do, even if they had found that a generic drug was applying for marketing. The patentee had to wait until the generic drug was commercially available to take action.
Now, the 2020 version provides an early-stage dispute resolution mechanism. First, the patentee must register its patent(s) in the Chinese Marketed Drug Patent Information Registration Platform, which will be set up according to the draft. Then, the patentee may initiate a lawsuit if it thinks a new drug falls within the protection scope of this registered patent, even if the new drug is requesting the approval of the China Food and Drug Administration (CFDA).
On the other hand, the owner of the new drug may also launch a lawsuit to confirm that its product is not infringing the patent, if the patentee does not sue. The court or the CNIPA must make a decision within nine months. Each party may appeal if they are not satisfied with the decision. Of course, the result of the CFDA review will be heavily dependent on the outcome of the lawsuit.
This change provides an early-stage dispute resolution mechanism that intends to reduce potential patent disputes during the administrative approval of generic drugs. First, the patentee has the duty to announce its patents around its products, so that the patents can be well noted in advance, and the generic companies may take action correspondingly (design around, invalidity challenge, or licensing).
Then, the patentee has the right to sue, even if the generic drug has not been approved by the CFDA, so that the patentee may enforce its patent and is able to stop the marketing of the generic drug much earlier than before. On the other hand, generic drug companies are also able to file a non-infringing lawsuit to reduce the risk of patent disputes during the marketing request.
(3) Local design patent. The current draft offers that the applicant may file a design patent for a local part of its product, for example, the brake of a bicycle, or a car door handle. The local design patent was once proposed in 2015, but was removed from the draft in 2019. Now the local design patent has appeared once again for public comment.
One reason for this change is believed to be that China is trying to offer various IP rights in order to serve the increasing needs of the IP assets owner. Subsequent to the graphical user interface, local designs appear to be the next option, so that not only can the appearance of the whole car be a design patent, but its door handle can be a separate design patent.
The author believes that reason for this amendment is that local designs are patentable in many other countries. After evaluating other running-design patent systems, China believes it is a good time to add local design patent into the IP assets so that IP owners may have more options to protect their IP.
(4) Infringement damages. (4.1) Calculation of damages. Nowadays, the damages caused by infringement are determined with priority. Damages are determined firstly based on the actual losses caused by the infringement. The patentee can turn to the benefits acquired by the infringer through the infringement only when the actual losses are difficult to be proved. That is, the calculation based on the actual losses has higher priority than the infringing benefits. Now this statutory order is removed, and the patentee may claim the damages based on actual losses or the infringing benefits.
The author believes this is a clear sign that China intends to strengthen its IP protection. The patentee may choose the best way to calculate its damages in order to receive monetary compensation as much as possible. This change also reduces the burden of proof for the patentee, since the patentee bears no burden to prove the difficulty to determine the actual losses if it wants to determine its damages based on the benefits caused by the infringement.
(4.2) Removal of lower limit of statutory damages. Statutory damages step in if the patentee fails to prove the actual losses or the benefits caused by the infringement, and there is no licensing fee for the court’s reference. In the 2019 version of the draft amendment, the statutory damages were lifted to RMB100,0000 (US$14,500) to RMB5 million (the current standard is from RMB10,000 to RMB1 million). In the 2020 version, the lower limit of RMB100,000 was removed. That is, the statutory damage will be up to the court, with an upper limit of RMB5 million, but with no lower limit.
Considering an average GDP of RMB79,000 per person in 2019, some argue that the lower limit of RMB100,000 was a bit aggressive, because a substantial portion of infringement cases are only related to design or utility model patents, and the accused products are simple ones like children’s toys.
The lower limit of RMB100,000 is too high for those simple cases. The removal of the lower limit leaves the judge more space to determine the damages at a reasonable level. On the other hand, the upper limit is still maintained at RMB5 million to match the economic development in recent decades.
From these changes, we may sense from various aspects the public’s interest and concerns about ongoing amendments to the Patent Law. The opinions of the public will be continually absorbed and reflected in each version of the draft by the legislature. The draft is now open for public comment, and still far from enactment. We still have time to see if there are any more revisions or additions.
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India: Patent laws and regulations 2020
As was expected, riding on the developments of preceding years, the last year has proven to be quite exciting from the perspective of intellectual property protection and enforcement in India. Significant developments have been witnessed from all quarters, further streamlining the nation’s overall IP ecosystem. In the past few months, the effects of the covid-19 pandemic have started showing up in the field of IP, yet there have still been so many noteworthy IP-related developments.
One of the foremost developments of the year was the landmark judgment in Bayer Corporation v Union of India, where the division bench of Delhi High Court held that the export of a patented invention for experimental purposes was also covered under section 107A of the Patents Act (India’s Bolar exception) and, therefore, did not amount to patent infringement. The division bench held that the sale, use and construction of patented products in terms of section 107A of the act, for purposes both within the country and abroad, was authorized and legal. The decision affirmed that the end use and the purpose of the export form the basis of determining whether it falls within the purview of section 107A.
Further, the non-functioning of the Intellectual Property Appellate Board (IPAB) has been a major concern in the past few years, mainly due to the vacant positions of technical members, the presence of whom is mandatory for the adjudication of IP cases. In July 2019, in response to a writ petition filed in Mylan Laboratories v Union of India & Ors before Delhi High Court, the court opined that the “doctrine of necessity” had to be invoked in the case.
If the post of a technical member is lying vacant, the IPAB can proceed to hear urgent matters and the orders passed will not suffer invalidity on the ground of lack of a quorum. Further, the court directed the IPAB chairman, who was likely to resign from office in September 2019, to continue to hold office until the appointment of a new chairman.
Later, through an order dated 21 July 2020, the government announced the appointment of technical members for patents, trademarks and copyrights. While the IPAB had already started clearing the backlog of cases, considering that the IPAB is now fully functional, we can expect the disposals to be even quicker, providing requisite relief to the stakeholders.
In August 2019, Delhi High Court passed another landmark judgment in Shogun Organics Ltd v Gaur Hari Guchhait, where it was held that prior disclosure of the invention during preparatory steps taken for launching a product, such as disclosure to the government, cannot be held to constitute disclosure for the purpose of anticipation unless and until there is clear public disclosure of the same.
The high court also held that the disclosure to a government department or any other authority, not just of the patentee, but by any other person, would not constitute prior publication. This judgment encouraged the applicants, for example, in the field of pharmaceuticals, to follow the due government regulations, without the fear of undue disclosure of their inventions.
In September 2019, the Cell for IPR Promotion and Management (CIPAM) released model guidelines on the implementation of IPR policy for academic institutions. These guidelines apply to all IP created at the academic institution from the date of implementation of these guidelines. The guidelines throw light on the ownership of IP, and the commercialization and benefit sharing of IP generated.
The guidelines have also proposed a utilization model for the IP-generated revenues of an academic institution. The guidelines have proposed a fast-tracked solution in case of any dispute arising between two parties, by proposing the appointment of a committee of experts to address the concerns of the aggrieved person(s). These guidelines have been drafted to empower all the stakeholders of the researcher/academic institution/external partner ecosystem, while ensuring the promotion of innovation and smooth operations.
Another significant development was the amendments made to the Patent Rules. To start with, the requirement of submission of original documents after the submission of electronic copies was eliminated. Now, the original document is required to be submitted only when requested by the Indian Patent Office (IPO), failing which such documents shall be deemed not to have been filed.
New categories of applicants were also introduced for availing the benefits of expedited examination. The updated list of categories includes: (1) applications where India is selected as the ISA (international searching authority) or IPEA (international preliminary examining authority) in the corresponding PCT (patent co-operation treaty) application; (2) a government-recognized start-up; (3) a small entity; (4) a woman applicant; (5) a government department; (6) an institution established by a central, provincial or state act, which is owned or controlled by the government; (7) a government company; (8) an institution wholly or substantially financed by the government; (9) for an application pertaining to a sector that has been notified by the central government on the basis of a request from the head of a department of the central government; and (10) a patent prosecution highway (PPH). Further, under the new rules, a PCT applicant will no longer have to pay a transmittal fee to the IPO when filing PCT applications through the e-PCT filing module.
In November 2019, the IPO commenced a bilateral PPH programme between India and Japan. This was the first PPH programme adapted by the IPO, and that, too, on a trial basis. On 29 November 2019, the IPO and the Japan Patent Office (JPO) released the procedure guidelines for the PPH, which clearly outlined the details for implementing the PPH programme.
The details included conditions of implementation, criteria for eligibility of applications to avail the facility, supporting documents to be submitted along with the request of expedited examination through the PPH, and procedures for handling of such requests by both offices. Considering the success of the pilot PPH programme, it would not be unreasonable to expect that the IPO may consider establishing a PPH programme with other jurisdictions as well in times to come.
Another development in November 2019 was the release of a new Manual of Patent Office Practice and Procedure (MPPP), which replaced the earlier manual of 2011. The manual accommodated multiple amendments that have been made to the Patents Rules 2003 over the years, and the substantial digitization of the processes at the IPO.
For example, the manual provides insight into electronic and physical submission of the documents, and certain procedures relating to the IPO’s adoption of the World Intellectual Property Organization’s Digital Access Service (WIPO-DAS). While the MPPP does not have any binding force as such, it still acts as a guideline for the Controllers at the IPO, as well as patent agents.
In December 2019, Delhi High Court passed another landmark judgment, in Ferid Allani v Union of India & Ors, referring the patent application back to the IPO with guiding directions that computer-related inventions demonstrating “technical effect” or “technical contribution” are patentable, even though it may be based on a computer program.
Interestingly, the IPO again refused the application on the grounds that the invention lacked novelty, after which the aggrieved applicant filed an appeal before the IPAB. The IPAB finally granted the patent and held that only relevant prior art can be cited for objecting novelty and the inventive step of an alleged invention.
The IPAB also held that it is must appreciate the technical effect produced by the present invention while examining the patentability of subject matter. The mere fact that a computer program is used for effectuating a part of the present invention does not provide a bar to patentability.
Considering the covid-19 pandemic across the globe, and the situation in India, in March 2020 the Supreme Court of India issued an order providing for the extension of timelines falling after 15 March 2020, and until the subsequent date is announced by the Supreme Court. As the covid-19 pandemic has not yet subsided in India, and no last date for availing the relief of extension of timelines has yet been announced by the Supreme Court, all the deadlines at the IPO remain suspended for now. An applicant can therefore file a request to postpone the deadline without incurring any official fee.
While the impact caused by covid-19 is still around, things are slowly getting back to normal, for example, the IPO, IPAB, and courts in India are remotely working. The biggest challenge for the IP ecosystem in India will be to overcome the damage caused by the pandemic and continue with steady growth and improvement.
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The Philippines :Patent laws and regulations 2020
The covid-19 pandemic has dramatically transformed the way that we live, and continues to challenge our ability to adapt to change. There is no going back to how things were and we need to shift to sustainable alternative norms in the conduct of our daily lives. IP rights protection is not exempt from such a need to transform.
Shift to online environment
Even before the pandemic, Filipinos were heavy users of internet-based platforms such as social media and online shopping websites.
But as e-commerce becomes more pervasive, there is greater inducement for copycats to ride on the goodwill of established online platforms, products and brands.
In this regard, the Internet Transactions Bill, which is pending before the Philippine Senate, aims to make transactions safer, easier and convenient for sellers and consumers. Under the bill, the Director General of the Philippine Intellectual Property Office (IPOPHL) is given the power to issue orders directing the take-down of a website, app, social media account or other similar platforms if they are found to be in violation of the Philippine Intellectual Property Code.
Although often overlooked, at the core of e-commerce businesses are intangible assets such as brand equity, goodwill, and software or computer-implemented systems. Thus, even while the bill is pending, the IP code already provides technology and product owners the legal basis to prevent the unauthorized use of their intangible assets, as long as they are covered by various IP rights, including patents.
With the fast rate of obsolescence of online technologies, owners may be more inclined to focus on brand protection instead of patent protection. Nevertheless, for technologies that have wide-ranging applications, or those that are indispensable even with respect to updated versions, patent protection remains an effective strategy to prevent infringement.
Patent protection across fields
Aside from e-commerce, patent protection is equally important in other fields, particularly in the field of medicine or pharmaceuticals. As the race for finding a vaccine or cure for covid-19 intensifies, patent filings will increase from scientists and researchers. There is also an expected increase in patent filings in the fields of medical equipment and devices, as innovation is likewise critical in the areas of diagnostics, sanitation, protective equipment, and other medical devices.
In the context of the pandemic it must be noted that, under the IP code, public interest, in particular national security, nutrition, health or the development of other sectors is sufficient ground to grant a compulsory licence. Thus, the state will have an interest in ensuring that patent rights will not prevent access to vaccines and life-saving medicines.
As travel is restricted and social distancing has replaced in-person interactions, there will be a demand for more efficient online connectivity. Thus, there will be more innovations in the fields of communication technology such as telecommunications, video-conferencing and other wireless technologies. This may lead to more licensing opportunities with respect to standard essential patents (SEPs) relating to wireless technologies such as 5G.
The current situation has opened the gateway to more inventions relating to transportation. For example, there are increasing technologies designed to give consumers real-time updates on travel disruptions.
The Department of Science and Technology – Philippine Council for Industry, Energy and Emerging Technology Research and Development (DOST-PCIEERD) recently launched technologies developed by Filipino researchers to help manage the effects of the covid-19 pandemic, namely, a disinfection chamber, a tracking system for allocation of medical supplies, a remote-controlled robot that allows virtual communication between medical personnel and patients, and a system for tracking relief assistance to communities.
Innovations are not limited to those involving advanced technology. The DOST continues to support “grassroots technologies” or cost-effective technical solutions to local problems such as generating high-yield crops, prolonging the shelf life of certain food products, and producing various waste management products.
The shift to the new normal has also expedited the evolution of technology. With this, patent protection will become a very important tool to maintain control of how innovations are scaled up to reach a global market. While the market is increasingly borderless, patent protection is still territorial in nature. Thus, patent owners now have to be more mindful of the jurisdictions where they wish to secure patent rights.
The Association of Southeast Asian Nations (ASEAN) must speed up harmonization efforts to facilitate patent protection in the region. In this way, business owners will have more incentive to set up shop in the region. For its part, the IPOPHL acknowledges the risks brought about by the pandemic, and recognizes that the current situation has made it difficult to file new patent applications or comply with maintenance requirements in the usual way. The IPOPHL thus fast-tracked the adoption of online processes in almost all of its services.
IPOPHL online filing
While the IPOPHL had launched its online filing system even before the pandemic, it only recently transitioned to the exclusive use of electronic filing and payment procedures. New applications for patents, utility models and industrial designs to be filed from within Metro Manila shall be filed online through the IPOPHL filing system, the eDocfile for Patents, except those applications that exceed 250 pages. Other requests and submissions may likewise be filed online, such as annuity payments, appeals, requests for extension, recordals, responses, revivals, and submission of documents such as powers of attorney, amendments and other late-filed documents.
All pleadings and filings relating to: inter partes proceedings, which include petitions to cancel patents, utility models, or industrial designs, and petitions for compulsory licensing; and cases on IP rights violations, which include patent infringement suits, shall likewise be filed electronically via email.
20-22 July 2020
19 August 2020
23-26 July 2020
20 August 2020
27-29 July 2020
24 August 2020
30 July-2 August 2020
25 August 2020
3-5 August 2020
26 August 2020
6-9 August 2020
27 August 2020
10-12 August 2020
31 August 2020
13-15 August 2020
1 September 2020
16-18 August 2020
2 September 2020
Extension of deadlines
To accommodate patent applicants and registrants and allow them to comply with maintenance requirements despite, the IPOPHL has extended a series of deadlines. Recently, the IPOPHL has suspended receiving and cashiering services from 20 July 2020 to 18 August 2020, and deadlines falling between the dates have been extended (see table above).
The IPOPHL is closed on Fridays for disinfection, and deadlines falling on Fridays may be filed the next business day.
Scanned copies of documents
The IPOPHL now accepts scanned copies of required original documents, such as powers of attorney and certified true copies of priority documents. The originals, however, may still be required if questions arise as to their authenticity or due execution. Otherwise, scanned copies shall suffice, and there is no need to submit original documents. These scanned copies may likewise be submitted to the IPOPHL via the eDocfile for Patents.
Conduct of online hearings
The IPOPHL has also taken advantage of available digital communication media such as online video-conference platforms to conduct hearings, pre-trials, and trials for inter partes proceedings and cases on IP rights violations. The parties simply have to file a request with the IPOPHL via email for the conduct of the hearing via online video-conference. The parties may also present their witnesses during the online video-conference proceedings, and the hearing officer may promulgate decisions or orders through the same platform.
The IPOPHL has shown its adaptability in view of safety requirements. It has consistently taken advantage of available technologies to make transactions with the public easier and more efficient. Particularly the eDocfile has been very effective and convenient to users of the online system. In fact, the local IP community welcomes the adoption of the online filing system as the norm for IP rights protection, even after the pandemic ends.
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