Administrative Enforcement Of Patents

Author: Stephen Yang, Peksung Intellectual Property, yyong@peksung.com

“Specifically, the draft says that in a cross-province/cross-city patent infringement case or patent passing -off case, SIPO has the power to organise the relevant administrative bodies to work together.”

Administrative enforcement of IP rights has long been a characteristic of the Chinese IP enforcement system.

Following the amendment to the Chinese Patent Law and its implementing regulations, the State Intellectual Property Office (SIPO) published Amendments to the Rules on Administrative Enforcement of Patent Rights (Draft for Comments) on September 1, 2010. The public consultation period closed on September 30, 2010.

The rules elaborate the role and power of administrative bodies to govern enforcement of patent rights, including handling patent infringements, mediation of disputes over patent rights and handling patent passing-off cases. In the draft amendment, the current rules (dating from 2001) were amended to be consistent with the new law and regulations.

The administrative bodies responsible for patent enforcement are local intellectual property offices, which are quasi-independent of SIPO and can be found all over China. In terms of administrative enforcement of patent rights, SIPO is supposed to give support and guidance to the local IP offices. In the draft rules, SIPO’s power over the local offices is strengthened. Specifically, the draft says that in a cross-province/cross-city patent infringement case or patent passing-off case, SIPO has the power to organise the relevant administrative bodies to work together.

Based on experience in many local IP offices, city or provincial-level offices are relatively weak on local enforcement due to limitations such as manpower. The draft rules include a new provision allowing city or provisional IP offices to delegate cases to competent IP offices at district or county level (one level below city). The provision further says that the city or provisional IP offices should supervise the district or county IP offices and should be held liable for their activities.

One important change to administrative bodies’ power provided in the new patent law concerns patent passing-off cases such as falsely marking pending applications as granted, continuing to mark patent numbers after patent expiry and forging patent certificates. The administrative bodies were given the power to inspect, seize and detain such products. Accordingly, provisions that prescribe the working procedure in handling such cases were added to the draft rules. Furthermore, the rules also specify three possible outcomes of patent passing-off cases: passing-off is found and administrative punishment is issued; passing-off is not found and the case is dismissed; and criminal activity is suspected and the case is transferred to the police. It is to be noted that administrative bodies are not given the power to inspect, seize and detain products during infringement cases.

The draft rules further include a new provision meaning that before administrative punishment is issued with a fine, the relevant parties have the right to request a hearing in front of a third party, where the administrative body and the relevant parties can debate the case.

In addition, the draft rules prescribe a three-month period from instigation for administrative bodies to finalise patent infringement cases or patent passing-off cases.

Interestingly, the draft rules include a revision providing that the administrative bodies cannot administer a more severe punishment simply because the relevant parties have filed complaints against the administrative bodies. Apparently, this is to avoid subjective rulings and abuses of power, which seems to work well with the provision allowing district or countylevel IP offices to handle patent disputes.

The draft rules also include a new provision affirming the power of administrative bodies to mediate between parties in a patent infringement dispute. However, administrative bodies still do not have the power to award damages, though they do have the power to impose fines, payable to the government.

In addition, a provision directed to collaboration between customs and the local IP offices has been added to the draft rules.

There is no doubt that administrative enforcement of patent rights will continue to be part of the Chinese IP enforcement system and that continued improvement needs to be made.

Stephen Yang is a partner at Peksung Intellectual Property Ltd. He can be contacted at: yyong@peksung.com