TITLE: Amended China Patent Law AUTHOR: Government of the People's Republic of China PUBLICATION: draft only DATE: August 2008 URL: http://www.grain.org/brl/?docid=833&lawid=3068 (unofficial translation) COMMENT FROM GRAIN: The government of China has just made public the draft text of its proposed new patent law amendment. This is the third time that China is changing the law since it came into force in 1984. The amendments are meant to bring the country further into compliance with the World Trade Organisation's agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The drafting of the third amendment was initiated by the Chinese State Intellectual Property Office (SIPO) in 2005. SIPO submitted a text to the State Council in December 2006. Since then, several versions of the draft leading up to the present August 2008 version have been under discussion. This process is part of an aggressive plan of the Chinese government to implement its National Intellectual Property Rights Strategy, announced in June 2008, to support the government's scientific and technology development goals. A critical aspect of the amendment relates to genetic resources and traditional knowledge. Article 5 of the draft states that "No patent right shall be granted for an invention-creation of which the completion depends on genetic resources if the acquisition or exploitation of said genetic resources violates the relevant laws and administrative regulations of the State." This needs to be read in conjunction with Article 27 which says that a patent applicant must indicate the direct and original source of such genetic resources in the patent application itself. The intent is to be able to keep track of the country's genetic resources and to enforce disclosure of the country of origin, so that benefit sharing as prescribed under the Convention on Biological Diversity can be effected. Some Chinese researchers welcome this "disclosure" mechanism, anticipating that the benefits would accrue to the Chinese people. The other "relevant laws" mentioned in Article 27, however, are not all in place. The Chinese government is still working on its domestic biodiversity legislation to deal with access to biological resources and related traditional knowledge. The present version of the draft amendment is silent on traditional knowledge, which is both good and problematic. It's good because a lot of groups, especially indigenous peoples, don't want to see patent law extended to traditional knowledge. And as soon as these laws start talking about traditional knowledge, for example based on trade agreements, it can mean the government is starting to treat traditional knowledge as intellectual property. But the reality is that the Chinese government is keen to convert the nation's wealth of traditional medicinal knowledge into tangible "benefits". Therefore, the absence of a provision on traditional knowledge can be understood as a message that the government does not want to "over regulate" in this area and scare away investors by prohibiting patents on inventions based on traditional knowledge. As it stands, the draft provides no safeguards, no restrictions, against outright "biopiracy" in terms of traditional knowledge. Several foreign business associations, especially from Europe and the US, have been closely monitoring the drafting process and actively lobbying for specific changes. They have been objecting to any requirement to "disclose" the source of genetic resources as part of the patent application process and discouraging any substantive requirements not found in TRIPS from being added to China's law. They also argue that TRIPS requires patents in all fields of technology, so no restrictions regarding genetic resources should appear. In the proposed amendment there are other visible changes particularly on enforcement, the flavour of the day among those pushing for ever stronger patent systems. As a deterrent to patent infringement, the penalty is proposed to be raised from 300 percent to 400 percent of illicit profits and the damage payment from 50,000 yuan to 200,000 yuan even if there is no profit from infringement. This is obviously with the objective to change China's image as lax on intellectual property violations and to send a signal that the State is going to crack down harder. The proposed amendment also changes the standard by which an invention will be considered novel and thus patentable. It expands the meaning of "prior art" to include things that are known to the public not only inside but outside China. The text is now with the Standing Committee of the legislative body, the National People's Congress. After three readings, the draft will be adopted. The legislative procedure is expected to be done by 2009. excerpts only Amended China Patent Law August 2008 General Provisions Article 5. No patent right shall be granted for an invention-creation of which the completion depends on genetic resources, if the acquisition or exploitation of said genetic resources violates the relevant laws and administrative regulations of the State. Application for Patent Article 27. For an invention-creation, the completion of which depends on genetic resources, the applicant shall indicate the direct source and original source of said genetic resources in the application documents; The applicant shall state reasons if the original source of said genetic resources can not be indicated. Full text available at http://www.grain.org/brl/?docid=833&lawid=3068 GOING FURTHER (compiled by GRAIN) Text of the proposed amendment in Mandarin http://www.npc.gov.cn/npc/xinwen/lfgz/2008-08/29/content_14 47388.htm Patent law of the People's Republic of China as it stands today http://www.npc.gov.cn/englishnpc/Law/2007-12/13/content_138 3992.htm China's National IPR Strategy http://english.ipr.gov.cn/en/iprspecials/IPRStrategy/index. htm China's State Intellectual Property Office (SIPO) http://www.sipo.gov.cn/sipo_English/ National working group for intellectual property rights protection, "Patent Law amendment submitted to NPC Standing Committee for first reading", Beijing, 9 September 2008. http://english.ipr.gov.cn/ipr/en/info/Article.jsp?a_no=2370 58&col_no=925&dir=200809 Tony Chen and Ann W Chen, "What does the third amendment to China's patent law mean to pharmaceutical companies?", Mondaq, London, 27 August 2008. http://www.mondaq.com/article.asp?articleid=65218 Tuo Yannan, "Amendment of patent law quickened", China Daily, Beijing, 9 August 2008. http://www.chinadaily.com.cn/bizchina/2008-09/08/content_70 08088.htm Thomas T Moga, "Changing China's patent regime", China Alliance, Washington DC, no date. http://www.china-alliance.com/News/CBR%20-%20Moga%20Patent% 20Law.php Biotechnology Industry Organisation, "Patent law of the People's Republic of China", letter from BIO to the State Intellectual Property Office of the People's Republic of China, Washington DC, 28 August 2006. http://bio.org/foodag/action/20060828.pdf Esta pagina disponible en Español: http://www.grain.org/bio-ipr/?id=556