1. Current: Article 5
No patent right shall be granted for any invention-creation that is contrary to the laws of the State or social morality or that is detrimental to public interest.

New: Article 5
No patent right shall be granted for any invention-creation that is contrary to the laws of the State or social morality or that is detrimental to public order.

For an invention-creation, the completion of which depends on genetic resources whose acquisition and exploitation are against relevant laws and regulations of the State, no patent right shall be granted.

Comments: Many biological inventions depend on genetic resources during their developments. Yet frequently cases have arisen where the acquisition and exploitation of the genetic resources are against relevant laws and regulations of the State. As no effective measures are provided in the relevant laws and regulations to prohibit such illegal acquisition and exploitation of genetic resources, especially by foreign individuals and/or entities, and also the Convention on Biological Diversifications (the “CBD”) is ineffective to settle these issues due to the obstruction of developed countries, this Bill proposes to prohibit the illegal use of genetic resources through the patent system.

2. Current: Article 11
After the grant of the patent right for an invention or utility model, except where otherwise provided for in this Law, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, and use, offer to sell, sell or import the product directly obtained by the patented process, for production or business purposes.

After the grant of the patent right for a design, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, sell or import the product incorporating its or his patented design, for production or business purposes.

New: Article 11
After the grant of the patent right for an invention or utility model, except where otherwise provided for in this Law, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, use, offer to sell, sell or import the patented product, or use the patented process, and use, offer to sell, sell or import the product directly obtained by the patented process, for production or business purposes.

After the grant of the patent right for a design, no entity or individual may, without the authorization of the patentee, exploit the patent, that is, make, offer to sell, sell or import the product incorporating its or his patented design, for production or business purposes.

Comments: In practice, upon acquisition of the infringing product manufactured without the license of the design patentee, some entities or individuals conduct sales promotion through advertising on various mass media or exhibition on expositions or exhibition fairs. Under the current Patent Law, however, the design patentee has no right to request the court or the patent administrative department to stop these activities. To safeguard the patentee’s legitimate rights and interests, this Bill proposes to provide that no entity or individual may, without the authorization of the patentee, offer to sell the product incorporating its or his patented design.

3. New: Article 15 （Added）
Where the right to apply for a patent or the patent right is shared by more than two entities or individuals, the co-owners’ agreement about the exercise of the rights shall prevail. Where no agreement exists, any co-owner may exploit the patent alone or permit others to exploit the patent through simple license and the fees thus collected shall be shared by all of the co-owners.

Except for the circumstances as provided for in the preceding paragraph, the exercise of the jointly owned right to apply for a patent or the patent right shall be agreed upon by all of the co-owners.

Comments: Although the General Principles of Civil Law of China provides the general rules that should be observed in the exercise of joint rights, the patent right, being an intangible property right, is of different characteristics from those of general tangible properties, and therefore the exercise of the joint rights of patent needs certain special rules. However, the current Patent Law is silent on this issue, which, in practice, causes many disputes. To solve this problem, the Bill proposes to add this article on the exercise of joint rights to the Patent Law.

4. Current: Article 19
Where any foreigner, foreign enterprise or other foreign organization having no habitual residence or business office in China applies for a patent, or has other patent matters to attend to, in China, it or he shall appoint a patent agency designated by the patent administration department under the State Council to act as his or its agent.

Where any Chinese entity or individual applies for a patent or has other patent matters to attend to in the country, it or he may appoint a patent agency to act as its or his agent.

The patent agencies should abide by the laws and administrative regulations and should deal with patent applications and other patent matters according to the commissions of the clients. Except for those applications that have been published or announced, the agencies should bear the responsibility for keeping confidential the content of its clients’ inventions-creations. The administrative regulations for administering the patent agencies shall be formulated by the State Council.

New: Article 20
Where any foreigner, foreign enterprise or other foreign organization having no habitual residence or business office in China applies for a patent, or has other patent matters to attend to, in China, it or he shall appoint a patent agency established in accordance with law to act as its or his agent.

Where any Chinese entity or individual applies for a patent or has other patent matters to attend to in the country, it or he may appoint a patent agency established in accordance with law to act as its or his agent.

The patent agencies should abide by the laws and administrative regulations and should deal with patent applications and other patent matters according to the commissions of the clients. Except for those applications that have been published or announced, the agencies should bear the responsibility for keeping confidential the content of its clients’ inventions-creations. The administrative regulations for administering the patent agencies shall be formulated by the State Council.

Comments: According to current Article 19, all foreign applicants that apply for patent in China shall entrust patent agencies that are designated by the State Council (namely the “foreign-related patent agencies”) , which might be necessary when the patent agency industry was of premature phase and lack of practical experience. However, with the development of China’s patent system in 20 years, China’s patent agency industry is gradually matured. In order to promote the development of the patent agency industry, establish a more fair competition environment and give foreign applicants more choices, it is proposed in this Bill to abolish the designation of foreign-related patent agencies and to allow all the patent agencies to undertake the relevant business of application for patent in China entrusted by a foreign entity or individual.

5. Current: Article 20
Where any Chinese entity or individual intends to file an application in a foreign country for a patent for its or his domestic invention-creation, it or he shall file first an application for patent with the patent administration department under the State Council and, shall appoint a patent agency designated by the said organ to act as its or his agent, and shall abide by the prescriptions of Article 4 in this law.

Any Chinese entity of individual may, according to the international treaties concerned to which China is a party, file an international application for patent for its or his invention-creation. The applicant for the international application should abide by the provisions of the preceding paragraph.

The patent administration department under the State Council shall handle the international application for patent in line with the international treaty to which China is a party, this law and the administrative regulations concerned made by the State Council.

New: Article 21
Any entity or individual may file an application in a foreign country for a patent for its or his domestic invention-creation, subject to the secrecy examination by the patent administration department under the State Council.

Any Chinese entity of individual may, according to the international treaties concerned to which China is a party, file an international application for patent for its or his invention-creation. The applicant for the international application should abide by the provisions of the preceding paragraph.

The patent administration department under the State Council shall handle the international application for patent in line with the international treaty to which China is a party, this law and the administrative regulations concerned made by the State Council.

Comments: In accordance with current Article 20, any Chinese entity or individual which intends to file an application in a foreign country for a patent for invention-creation made in China shall file first an application for patent with the Patent Administration Department under the State Council. This is legally binding for all wholly foreign-owned companies and joint ventures set up by foreign companies in China. However, this provision is somewhat contradictory to the fact that most foreign companies tend to collectively manage their patent portfolios worldwide. To solve this problem, this Bill proposes to abolish this provision. Nevertheless, before filing an application abroad, approval by the government must be obtained.