The final versions of the updated Guidelines for Patent Examination and the Implementing Rules for the Patent Law were released by the China National Intellectual Property Administration (CNIPA) in 2023, and they went into effect on January 20, 2024. The 4th Amendment to the Patent Law, which was enacted in June 2021, brought about reforms to the Chinese patent system; these regulations finalise those efforts. We will be discussing some of the important amendments in this blog.

Patent Term Extension (PTE):

The amendment introduces patent term extensions (PTEs) for pharmaceuticals, compensating for delays in obtaining marketing approval. PTEs apply to patents disclosing novel and improved drugs, excluding intermediate patents. They must be requested within three months of China’s marketing clearance and meet specific criteria, extending the patent term by up to 5 years after regular expiration or 14 years after marketing approval.

Disputes over PTE eligibility or duration can be addressed through administrative reconsideration or judicial review. PTEs cannot be pursued for drugs approved in China before June 1, 2021.

Despite similarities to U.S. and European systems, China’s PTEs are indication-specific, benefiting pharmaceutical companies with additional protection. Off-label use challenges may arise, impacting reimbursement and requiring patent infringement lawsuits.

Innovative pharmaceutical companies should coordinate marketing, regulatory, and intellectual property efforts to maximize PTE eligibility, considering early clinical trials in China to align with the regulatory approach. Adjustments to global patent filing strategies may be necessary to optimize Chinese PTEs.

Patent Term Adjustment (PTA):

The Patent Term Adjustment (PTA) was established by the 4th Amendment to the Patent Law in order to compensate for unjustified delays in patent prosecution. The days of PTA which are defined as the number of days between the date of patent grant and the date on which the patent has been filed for more than four years and substantive examination has begun for more than three years are now further explained by the Regulations. However, this calculation takes into account the days of “reasonable delays” and “delays caused by the applicant” only. Any hold-up over who owns the patent application and any delays brought on by re-examination procedures qualify as reasonable delays.

Abolition of the 15-day rule:

The grace period of 15 days, which determines the date of receipt of any official communication from the China National Intellectual Property Administration (CNIPA) as 15 days from the date of dispatch of the communication, will be eliminated if the Chinese patent application is filed electronically, in a move that is similar to what happened to the EPO. Since the majority of Chinese patent applications are actually submitted online, the elimination of this requirement will result in a shorter response time for any office action. The new system does, however, have the benefit of harmonizing and streamlining the CNIPA deadline computation.

Addition or correction of priority claim:

The Regulations now permit the addition or correction of a priority claim following the filing of the Chinese application, in accordance with the laws governing patents in the UK, the EP, and the US. To do this, a request must be submitted within four months of the application’s filing date or sixteen months of the earlier application’s filing date, whichever comes first. Though it’s unclear exactly what this means, “the applicant has claimed priority” is another prerequisite for filing the request. Does this imply, for instance, that the applicant cannot ask to have a priority claim added if, by mistake, no priority claim is submitted at all at the time the Chinese application is filed? We anticipate that the CNIPA will offer more thorough guidelines in the future.

Rewards for inventors:

The minimum reward for an inventor under the Regulations has increased from RMB 3,000 to RMB 4,000 for invention patents, and from RMB 1,000 to RMB 1,500 for utility model or design patents, compared to earlier versions. This increase is contingent upon the employer and the inventor/designer not having previously reached an agreement regarding the reward. Additionally, the Law on Promotion of Transformation of Scientific and Technological Achievements, which establishes a far higher remuneration standard than the Regulations, will take effect if the employer has not made the payment explicit in its internal regulations or in a contract with the patent inventor/designer. Consequently, it is usually a good idea for employers to add IP payment and rewards in the employment contract.

Patent Open License System:

The protocols and specifications for open licence declaration that were previously disclosed in the CNIPA Trial Programme on Patent Open Licence are validated by the Amended Regulations. The Chinese open licence system is distinct from the UK system in that it necessitates the disclosure of fundamental licencing terms, such as the calculation of royalties.

CNIPA for patent infringement disputes:

Disputes involving patent infringement that have a large national influence may fall within the jurisdiction of the CNIPA. The CNIPA has the authority to rule on both patent validity and infringement in these situations. By handling lawsuits for patent infringement and counterclaims for patent invalidity separately by the Chinese Courts and the CNIPA, this may lessen any ambiguity and inconsistency arising from the bifurcation of traditional Chinese patent litigation.

Scope of re-examination:

The Amended Regulations stipulate that the Patent Re-examination and Invalidation Department of CNIPA may, ex officio, address “apparent” shortcomings in a patent application during re-examination proceedings, in addition to those that were first noted in the rejection decision.

The new policy is designed to lessen the burden of the applicants in the patent application process by avoiding several rounds of re-examination processes, as opposed to the previous practice of returning the application back to the examining division for further study.

In summary, the comprehensive updates to China’s patent regulations, introduced in conjunction with the 4th Amendment to the Patent Law, reflect a concerted effort to align the country’s intellectual property framework with global standards while addressing specific industry needs. Key reforms include the introduction of patent term extensions for pharmaceuticals, streamlining of administrative processes such as priority claim adjustments, and enhancements to inventor rewards. Moreover, initiatives like the Patent Open License System and the CNIPA’s expanded role in patent infringement disputes underscore China’s commitment to fostering innovation and ensuring fair and efficient resolution of intellectual property matters.