Amended China Patent Law

China (2008, draft)

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August 2008

Amended China Patent Law

(AMENDMENTS IN BOLD TEXT)

Chapter I

General Provisions

Article 1.

This Law is enacted to protect patent rights, to encourage inventions-creations, to foster the management and application of inventions-creations, to enhance the capability of independent innovation, to promote the advancement of science & technology, and the development of economy & society, and to construct an innovation-oriented country.

Article 2.

In this Law, “inventions-creations" mean inventions, utility models and designs.

Article 3.

The Patent Administrative Department Under the State Council is responsible for the patent work throughout the country. It receives and examines patent applications and grants patent rights for inventions-creations in accordance with law.

The administrative authority for patent affairs under the people's governments of provinces, autonomous regions and municipalities directly under the Central Government are responsible for the administrative work concerning patents in their respective administrative areas.

Article 4.

Where an invention-creation for which a patent is applied for relates to the security or other vital interests of the State and is required to be kept secret, the application shall be treated in accordance with the relevant prescriptions of the State.

Article 5.

No patent right shall be granted for any invention-creation that is contrary to social morality or that is detrimental to public order.

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.

Article 6.

An invention-creation, made by a person in execution of the tasks of the entity to which he belongs, or made by him mainly by using the material and technical means of the entity is a service invention-creation. For a service intention-creation, the right to apply for a patent belongs to the entity. After the application is approved, the entity shall be the patentee.

For a non-service invention-creation, the right to apply for a patent belongs to the inventor or creator. After the application is approved, the inventor or creator shall be the patentee.

In respect of an invention-creation made by a person using the material and technical means of an entity to which he belongs, where the entity and the inventor or creator have entered into a contract in which the right to apply for and own a patent is provided for, such a provision shall apply.

Article 7.

No entity or individual shall prevent the inventor or creator from filing an application for a patent for a non-service invention-creation.

Article 8.

For an invention-creation jointly made by two or more entities or individuals, or made by an entity or individual in execution of a commission given to it or him by another entity or individual, the right to apply for a patent belongs, unless otherwise agreed upon, to the entity or individual that made, or to the entities or individuals that jointly made, the invention-creation. After the application is approved, the entity or individual that applied for it shall be the patentee.

Article 9.

For any identical invention-creation, only one patent right shall be granted. However, where the same applicant(s) had applied for both patent for utility model and patent for invention for the identical invention-creation on the same day, and the previously granted patent for utility model has not been expired, and the applicant(s) declares to abandon the patent for utility model, then the patent for invention may be granted.

Where two or more applicants file applications for patent for the identical invention-creation, the patent right shall be granted to the applicant whose application was filed first.

Article 10.

The patent application right and the patent right may be assigned.

Any assignment of the patent application right or the patent right by a Chinese entity or individual to a foreigner shall follow the procedure in accordance with provisions of the relevant laws and administrative regulations.

Where the patent application right or the patent right is assigned, the parties shall conclude a written contract and register it with the Patent Administration Department Under the State Council. The Patent Administration Department Under the State Council shall announce the registration. The assignment shall take effect as of the date of registration.

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.

Article 12.

Any entity or individual exploiting the patent of another shall conclude with the patentee a written license contract for exploitation and pay the patentee a fee for the exploitation of the patent. The licensee has no right to authorize any entity or individual, other than that referred to in the contract for exploitation, to exploit the patent.

Article 13.

After the publication of the application for a patent for invention, the applicant may require the entity or individual exploiting the invention to pay an appropriate fee.

Article 14.

Where any patent for invention, belonging to any state-owned enterprise or institution, is considered as of great significance to the interest of the State or to the public interest by the competent departments concerned under the State Council or the people's governments of provinces, autonomous regions or municipalities directly under the Central Government, after approval by the State Council, the patented invention may be promoted for application within the reasonable scope. The exploiting entity shall pay exploitation fee to the patentee, and the amount of the exploitation fee shall be determined through consultation by the two parties.

Article 15.

Where the patent application right or patent right is co-owned by two or more entities or individuals, if the co-owners have agreed upon how to exploit the patent, such agreement shall be followed; otherwise, any co-owner may exploit the patent alone or grant others an non-exclusive license to exploit the patent and the exploitation fee received shall be allocated among all co-owners.

Except as provided above in the preceding paragraph, exploitation of any co-owned patent application right or patent right shall obtain all co-owners’ consent.

Article 16.

The patentee has the right to affix a patent marking and to indicate the number of the patent on the patented product or on the packing of that product.

Article 17.

The entity that is granted a patent right shall award to the inventor or creator of a service invention-creation a reward and, upon exploitation of the patented invention-creation, shall pay the inventor or creator a reasonable remuneration based on the extent of spreading and application and the economic benefits yielded.

Article 18.

The inventor or creator has the right to be named as such in the patent document.

Article 19.

Where any foreigner, foreign enterprise or other foreign organization having no habitual residence or business office in China files an application for a patent in China, the application shall be treated under this Law in accordance with any agreement concluded between the country to which the applicant belongs and China, or in accordance with any international treaty to which both countries are party, or on the basis of the principle of reciprocity.

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 the law 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 established in accordance with the law to act as its or his agent.

The patent agency shall comply with the provisions of laws and administrative regulations, and handle patent applications and other patent matters according to the instructions of its clients. In respect of the contents of its clients' inventions-creations, except for those that have been published or announced, the agency shall bear the obligation of keeping them confidential. The administrative regulations governing the patent agency shall be formulated by the State Council.

Article 21.

Any entity or individual may file an application in a foreign country for an invention-creation completed in China, subject to a prior security examination by the Patent Administration Department Under the State Council.

Any Chinese entity or individual may file an international application for patent in accordance with any international treaty concerned to which China is party. The applicant filing an international application for patent shall comply with the provisions of the preceding paragraph.

The Patent Administration Department Under the State Council shall handle any international application for patent in accordance with the international treaty concerned to which China is party, this Law and the relevant regulations of the State Council.

Article 22.

The Patent Administrative Department Under the State Council and its Patent Reexamination Board shall handle any patent application and patent-related request according to law and in conformity with the requirements for being objective, fair, correct and timely. The Patent Administrative Department Under the State Council shall disseminate the patent related information completely, accurately, and timely, and publish Patent Gazette periodically.

Until the publication or announcement of the application for a patent, staff members of the Patent Administrative Department Under the State Council and other persons involved have the duty to keep its contents secret.

Chapter II

Requirements for Grant of Patent Right

Article 23.

Any invention or utility model for which patent right may be granted must possess novelty, inventiveness and practical applicability.

Novelty means that, the invention or utility model shall neither belong to the prior art, nor has any other person filed before the date of filing with the Patent Administrative Department Under the State Council an application which described the identical invention or utility model and was published in patent application documents or announced in patent documents after the said date of filing.

Inventiveness means that, as compared with the prior art, the invention has prominent substantive features and represents a notable progress and that the utility model has substantive features and represents progress.

Practical applicability means that the invention or utility model can be made or used and can produce effective results.

The prior art referred to in this Law means any technology known to the public in this country or abroad before the date of filing.

Article 24.

Any design for which patent right may be granted shall neither belong to the prior design, nor has any other person filed before the date of filing with the Patent Administrative Department Under the State Council an application which described the identical design and was announced in patent documents after the said date of filing.

Any design for which patent right may be granted shall be obviously differentiable from the prior design or a combination of features of the prior design.

Any design for which patent right may be granted must not be in conflict with any prior right of any other person.

The prior design referred to in this Law means any design known to the public in this country or abroad before the date of filing.

Article 25.

An invention-creation for which a patent is applied for does not lose its novelty where, within six months before the date of filing, one of the following events occurred:

(1) where it was first exhibited at an international exhibition sponsored or recognized by the Chinese Government;

(2) where it was first made public at a prescribed academic or technological meeting;

(3) where it was disclosed by any person without the consent of the applicant.

Article 26.

For any of the following, no patent right shall be granted:

(1) scientific discoveries;

(2) rules and methods for mental activities;

(3) methods for the diagnosis or for the treatment of diseases;

(4) animal and plant varieties;

(5) Substances obtained by means of nuclear transformation.

(6) Two-dimensional designs made of patterns, colors or their combination, mainly for the purpose of indication.

For processes used in producing products referred to in items (4) of the preceding paragraph, patent right may be granted in accordance with the provisions of this Law.

Chapter III

Application for Patent

Article 27.

Where an application for a patent for invention or utility model is filed, a request, a description and its abstract, claims, etc. shall be submitted.

The request shall state the title of the invention or utility model, the name of the inventor or creator, the name and the address of the applicant and other related matters.

The description shall set forth the invention or utility model in a manner sufficiently clear and complete so as to enable a person skilled in the relevant filed of technology to carry it out; where necessary, drawings are required.

The abstract of the description shall state briefly the main technical points of the invention or utility model.

The claims shall be supported by the description and shall define the extent of the patent protection asked for in a clear and concise manner.

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.

Article 28.

Where an application for a patent for design is filed, documents such as a request, drawings or photographs of the design as well as a brief explanation of the design, etc. shall be submitted.

Article 29.

The date on which the Patent Administrative Department Under the State Council receives the application documents shall be the date of filing. If the application documents are sent by mail, the date of mailing indicated by the postmark shall be the date of filing.

Article 30.

Where, within twelve months from the date on which any applicant first filed in a foreign country an application for a Patent for invention or utility model, or within six months from the date on which any applicant first filed in a foreign country an application for a patent for design, he or it files in China an application for a patent for the same subject matter, he or it may, in accordance with any agreement concluded between the said foreign country and China, or in accordance with any international treaty to which both countries are party, or on the basis of the principle of mutual recognition of the right of priority, enjoy a right of priority.

Where, within twelve months from the date on which any applicant first filed in China an application for a patent for invention or utility model, he or it files with the Patent Administrative Department Under the State Council an application for a patent for the same subject matter, he or it may enjoy a right of priority.

Article 31.

Any applicant who claims the right of priority shall make a written declaration when the application is filed, and submit, within three months, a copy of the patent application document which was first filed; if the applicant fails to make the written declaration or to meet the time limit for submitting the patent application document, the claim to the right of priority shall be deemed not to have been made.

Article 32.

An application for a patent for invention or utility model shall be limited to one invention or utility model. Two or more inventions or utility models belonging to a single general inventive concept may be filed as one application.

An application for a patent for design shall be limited to one design. Two or more similar designs for the same product or two or more designs which are incorporated in products belonging to the same class and are sold or used in sets may be filed as one application.

Article 33.

An applicant may withdraw his or its application for a patent at any time before the patent right is granted.

Article 34.

An applicant may amend his or its application for a patent, but the amendment to the application for a patent for invention or utility model may not go beyond the scope of the disclosure contained in the initial description and claims, and the amendment to the application for a patent for design may not go beyond the scope of the disclosure as shown in the initial drawings or photographs.

Chapter IV

Examination and Approval of Application for Patent

Article 35.

Where, after receiving an application for a patent for invention, the Patent Administrative Department Under the State Council, upon preliminary examination, finds the application to be in conformity with the requirements of this Law, it shall publish the application promptly after the expiration of eighteen months from the date of filing. Upon the request of the applicant, the Patent Administrative Department Under the State Council publishes the application earlier.

Article 36.

Upon the request of the applicant for a patent for invention, made at any time within three years from the date of filing, the Patent Administrative Department Under the State Council will proceed to examine the application as to its substance. If, without any justified reason, the applicant fails to meet the time limit for requesting examination as to substance, the application shall be deemed to have been withdrawn.

The Patent Administrative Department Under the State Council may, on its own initiative, proceed to examine any application for a patent for invention as to its substance when it deems it necessary.

Article 37.

When the applicant for a patent for invention requests examination as to substance, he or it shall furnish pre-filing date reference materials concerning the invention.

For an application for a patent for invention that has been already filed in a foreign country, the Patent Administrative Department Under the State Council may ask the applicant to furnish within a specified time limit documents concerning any search made for the purpose of examining that application, or concerning the results of any examination made, in that country. If, at the expiration of the specified time limit, without any justified reason, the said documents are not furnished, the application shall be deemed to have been withdrawn.

Article 38.

Where the Patent Administrative Department Under the State Council, after it has made the examination as to substance of the application for a patent for invention, finds that the application is not in conformity with the provisions of this Law, it shall notify the applicant and request him or it to submit, within a specified time limit, his or its observations or to amend the application. If, without any justified reason, the time limit for making response is not met, the application shall be deemed to have been withdrawn.

Article 39.

Where, after the applicant has made the observations or Amendment, the Patent Administrative Department Under the State Council finds that the application for a patent for invention is still not in conformity with the provisions of this Law, the application shall be rejected.

Article 40.

Where it is found after examination as to substance that there is no cause for rejection of the application for a patent for invention, the Patent Administrative Department Under the State Council shall make a decision to grant the patent right for invention, issue the certificate of patent for invention, and register and announce it. The patent right for invention shall take effect as of the date of the announcement.

Article 41.

Where it is found after preliminary examination that there is no cause for rejection of the application for a patent for utility model or design, the Patent Administrative Department Under the State Council shall make a decision to grant the patent right for utility model or the patent right for design, issue the relevant patent certificate, and register and announce it. The patent right for utility model or design shall take effect as of the date of the announcement.

Article 42.

The Patent Administration Department Under the State Council shall set up a Patent Reexamination Board. Where an applicant for patent is not satisfied with the decision of the said department rejecting the application, the applicant may, within three months from the date of receipt of the notification, request the Patent Reexamination Board to make a reexamination. The Patent Reexamination Board shall, after reexamination, make a decision and notify the applicant for patent.

Where the applicant for patent is not satisfied with the decision of the Patent Reexamination Board, it or he may, within three months from the date of receipt of the notification, institute legal proceedings in the people's court.

Chapter V

Duration, Cessation and Invalidation of Patent Right

Article 43.

The duration of patent right for inventions shall be twenty years, the duration of patent right for utility models and patent right for designs shall be ten years, counted from the date of filing.

Article 44.

The patentee shall pay an annual fee beginning with the year in which the patent right was granted.

Article 45.

In any of the following cases, the patent right shall cease before the expiration of its duration:

(1) where an annual fee is not paid as prescribed;

(2) where the patentee abandons his or its patent right by a written declaration. Any cessation of the patent right shall be registered and announced by the Patent Administrative Department Under the State Council.

Article 46.

Where, starting from the date of the announcement of the grant of the patent right by the Patent Administrative Department Under the State Council, any entity or individual considers that the grant of the said patent right is not in conformity with the relevant provisions of this Law, it or he may request the Patent Reexamination Board to declare the patent right invalid.

Article 47.

The Patent Reexamination Board shall examine the request for invalidation of the patent right promptly, make a decision on it and notify the person who made the request and the patentee. The decision declaring the patent right invalid shall be registered and announced by the Patent Administration Department Under the State Council.

Where the patentee or the person who made the request for invalidation is not satisfied with the decision of the Patent Reexamination Board declaring the patent right invalid or upholding the patent right, such party may, within three months from receipt of the notification of the decision, institute legal proceedings in the people's court. The people's court shall notify the person that is the opponent party of that party in the invalidation procedure to appear as a third party in the legal proceedings.

Article 48.

Any patent right which has been declared invalid shall be deemed to be non-existent from the beginning.

The decision declaring the patent right invalid shall have no retroactive effect on any judgment or ruling of patent infringement which has been pronounced and enforced by the people's court, on any decision concerning the handling of a dispute over patent infringement which has been complied with or compulsorily executed, or on any contract of patent license or of assignment of patent right which has been performed prior to the declaration of the patent right invalid; however, the damage caused to other persons in bad faith on the part of the patentee shall be compensated.

If, pursuant to the provisions of the preceding paragraph, the patentee or the assignor of the patent right makes no repayment to the licensee or the assignee of the patent right of patent infringement compensation, the exploitation fee of the patent or of the price for the assignment of the patent right, which is obviously contrary to the principle of fairness, the patentee or the assignor of the patent right shall repay the whole or part of the fee for the exploitation of the patent or of the price for the assignment of the patent right to the licensee or the assignee of the patent right.

Chapter VI

Compulsory License for Exploitation of Patent

Article 49.

In any of the following cases, the Patent Administrative Department Under the State Council may, upon the request of the entity or individual which is capable to exploit, grant a compulsory license to exploit the patent for invention or utility model:

(1) where the patentee, after the third anniversary of the grant of the patent right and fourth anniversary of the filing date of patent application, has not exploited the patent or has not sufficiently exploited the patent without any justified reason;

(2) Where it is determined through the judicial or administrative procedure that the patentee’s exercise of the patent right thereof is an act of eliminating or restricting competition, thus there’s a necessity to grant a compulsory license to the applicant.

Article 50.

Where a national emergency or any extraordinary state of affairs occurs, or where the public non-commercial use so requires, the Patent Administration Department Under the State Council may, as suggested by a competent department under the State Council, grant the entity or individual capable for exploitation, designated by the department, a compulsory license to exploit the patent for invention or utility model.

Article 51.

For the purpose of public health, the Patent Administration Department Under the State Council may grant a compulsory license to manufacture and export a medication which has been granted patent rights in China to following countries or regions:

1. the least developing country;

2. a WTO member that has completed relevant procedure required by relevant treaties of which China is a member, and who has no or insufficient capability to manufacture the said medication.

Article 52.

Where the invention or utility model for which the patent right has been granted involves important technical advance of considerable economic significance in relation to another invention or utility model for which a patent right has been granted earlier and the exploitation of the later invention or utility model depends on the exploitation of the earlier invention or utility model, the Patent Administrative Department Under the State Council may, upon the request of the later patentee, grant a compulsory license to exploit the earlier invention or utility model.

Where, according to the preceding paragraph, a compulsory license is granted, the Patent Administrative Department Under the State Council may, upon the request of the earlier patentee, also grant a compulsory license to exploit the later invention or utility model.

Article 53.

Where the invention-creation covered by the compulsory license relates to a semi-conductor technology, its exploitation is limited to following conditions:

1. public non-commercial use;

2. enforcement of a patent right by a patentee is determined as an act of eliminating and restricting competition by the judicial or administrative procedure.

Article 54.

The exploitation of a compulsory license shall be for the supply of the domestic market, except as otherwise provided for in Article 49, item 2 and Article 51 of this Law.

Article 55.

The entity or individual requesting, in accordance with the provisions of Article 49, item 1 or Article 52 of this Law, a compulsory license for exploitation shall furnish proof that it or he has made requests for a license from the patentee of an invention or utility model to exploit its or his patent on reasonable terms and such efforts have not been successful within a reasonable period of time.

Article 56.

The decision made by the Patent Administrative Department Under the State Council granting a compulsory license for exploitation shall be notified promptly to the patentee concerned, and shall be registered and announced.

In the decision granting the compulsory license for exploitation, the scope and duration of the exploitation shall be specified on the basis of the reasons justifying the grant. If and when the circumstances which led to such compulsory license cease to exist and are unlikely to recur, the Patent Administrative Department Under the State Council may, after review upon the request of the patentee, terminate the compulsory license.

Article 57.

Any entity or individual that is granted a compulsory license for exploitation shall not have an exclusive right to exploit and shall not have the right to authorize exploitation by any others.

Article 58.

The entity or individual that is granted a compulsory license for exploitation shall pay to the patentee a reasonable exploitation fee, or pay the exploitation fee according to provisions of international treaties of which China is a member. If exploitation fee required, the amount shall be fixed by both parties in consultations. Where the parties fail to reach an agreement, the Patent Administration Department Under the State Council shall adjudicate.

Article 59.

Where the patentee is not satisfied with the decision of the Patent Administration Department Under the State Council granting a compulsory license for exploitation, or where the patentee or the entity or individual that is granted the compulsory license for exploitation is not satisfied with the ruling made by the Patent Administration Department Under the State Council regarding the fee payable for exploitation, it or he may, within three months from the receipt of the date of notification, institute legal proceedings in the people's court.

Chapter VII

Protection of Patent Right

Article 60.

The extent of protection of the patent right for invention or utility model shall be determined by the terms of the claims. The description and the appended drawings may be used to interpret the content of the claims.

The extent of protection of the patent right for design shall be determined by the product incorporating the patented design as shown in the drawings or photographs. The brief explanation may be used to interpret the product protected by design patent which is described by drawings or photographs.

Article 61.

Where a dispute arises as a result of the exploitation of a patent without the authorization of the patentee, that is, the infringement of the patent right of the patentee, it shall be settled through consultation by the parties. Where the parties are not willing to consult with each other or where the consultation fails, the patentee or any interested party may institute legal proceedings in the people's court, or request the administrative authority for patent affairs to handle the matter. When the administrative authority for patent affairs handling the matter considers that the infringement is established, it may order the infringer to stop the infringing act immediately. If the infringer is not satisfied with the order, he may, within 15 days from the date of receipt of the notification of the order, institutes legal proceedings in the people's court in accordance with the Administrative Procedure Law of the People's Republic of China. If, within the said time limit, such proceedings are not instituted and the order is not complied with, the administrative authority for patent affairs may approach the people's court for compulsory execution. The said authority handling the matter may, upon the request of the parties, mediate in the amount of compensation for the damage caused by the infringement of the patent right. If the mediation fails, the parties may institute legal proceedings in the people's court in accordance with the Civil Procedure Law of the People's Republic of China.

Where any infringement dispute relates to a patent for invention for a process for the manufacture of a new product, any entity or individual manufacturing the identical product shall furnish proof to show that the process used in the manufacture of its or his product is different from the patented process.

Article 62.

Where the patent infringement relates to a patent for utility model or design, the people's court or the administrative authority for patent affairs may ask the patentee or an interested party to furnish an evaluation report of patent right made by the Patent Administration Department Under the State Council.

The Patent Administrative Department Under the State Council shall upon the request from patentee or interested party, conduct a search, analysis and evaluation for the related patent for utility model or patent for design to make an evaluation report of paten right. The evaluation report of paten right is a preliminary evidence for people’s court or administrative authority for patent affairs to judge the validity of the patent right.

Article 63.

In a patent infringement dispute, where the accused infringer has evidences demonstrating that the technology or design exploited by it or him belongs to prior art or prior design, the said exploiting act shall not be considered as constituting an infringing act.

Article 64.

Where any person passes off the patent of another person as his own, he shall, in addition to bearing his civil liability according to law, be ordered by the administrative authority for patent affairs to amend his act, and the order shall be announced. His illegal earnings shall be confiscated and, in addition, he may be imposed a fine of not more than four times his illegal earnings and, if there is no illegal earnings, a fine of not more than RMB 200,000 yuan. Where the infringement constitutes a crime, he shall be prosecuted for his criminal liability.

Article 65.

Where any person passes any non-patented product off as patented product or passes any non-patented process off as patented process, he shall be ordered by the administrative authority for patent affairs to amend his act, and the order shall be announced, his illegal earnings shall be confiscated, and he may be imposed a fine of not no more than RMB 200,000 yuan.

Article 66.

The amount of compensation for the damage caused by the infringement of the patent right shall be fixed by both parties in consultations. Where the parties fail to reach an agreement, the compensation shall be assessed on the basis of the losses suffered by the patentee or the profits which the infringer has earned through the infringement. If it is difficult to determine both the losses which the patentee has suffered and the profits which the infringer has earned, the amount may be assessed by reference to the appropriate multiple of the amount of the exploitation fee of that patent. If it is difficult to determine the losses which the patentee has suffered, the profits which the infringer has earned and the exploitation fee of that patent, people’s court shall decide a compensation as the range from RMB 10,000 to 1,000,000 yuan based on type of patent, and nature & circumstances of the infringement.

The amount of compensation caused by the infringement of the patent right shall further include reasonable expenses the patentee has incurred in order to stop the infringing act.

Article 67.

Where any patentee or interested party has evidence to prove that another person is infringing or will soon infringe its or his patent right and that if such infringing act is not checked or prevented from occurring in time, it is likely to cause irreparable harm to it or him, it or he may, before or during any legal proceedings are instituted, request the people's court to adopt measures for ordering the suspension of relevant acts and the preservation of property.

The people's court, when dealing with the request mentioned in the preceding paragraph, shall apply the provisions about the preservation of property in the Civil Procedure Law of the People's Republic of China.

Article 68.

A patentee or an interested party may, with the object of halting infringing conduct, apply to a people's court for the preservation of evidence prior to institution of the legal proceedings, if such evidence might be destroyed, lost or difficult to obtain later.

The people's court must render a ruling within 48 hours of receipt of the application. The implementation of a ruling to adopt preservation measures shall commence immediately after it is rendered.

The people's court may order the applicant to provide a security. If the applicant fails to provide a security, his application shall be rejected.

If the applicant fails to institute proceedings within 15 days after the people's court takes preservation measures, the people's court shall terminate such preservation measures.

Article 69.

Prescription for instituting legal proceedings concerning the infringement of patent right is two years counted from the date on which the patentee or any interested party obtains or should have obtained knowledge of the infringing act.

Where no appropriate fee for exploitation of the invention, subject of an application for patent for invention, is paid during the period from the publication of the application to the grant of patent right, prescription for instituting legal proceedings by the patentee to demand the said fee is two years counted from the date on which the patentee obtains or should have obtained knowledge of the exploitation of his invention by another person. However, where the patentee has already obtained or should have obtained knowledge before the date of the grant of the patent right, the prescription shall be counted from the date of the grant.

Article 70.

None of the following shall be deemed as infringement of the patent right:

(1) Where, after the sale of a patented product that was made by the patentee or the entity or individual with the authorization of the patentee, or of a product that was directly obtained by using the patented process by the patentee or the entity or individual with the authorization of the patentee, any other person uses, offers to sell or sells, imports that product;

(2) Where, before the date of filing of the application for patent, any person who has already made the identical product, used the identical process, or made necessary preparations for its making or using, continues to make or use it within the original scope only;

(3) Where any foreign means of transport which temporarily passes through the territory, territorial waters or territorial airspace of China uses the patent concerned, in accordance with any agreement concluded between the country to which the foreign means of transport belongs and China, or in accordance with any international treaty to which both countries are party, or on the basis of the principle of reciprocity, for its own needs, in its devices and installations;

(4) Where any person uses the patent concerned solely for the purposes of scientific research and experimentation.

(5) Where any entity or individual manufactures a patented medication or a patented medical apparatus solely for the purposes of providing the information needed for the administrative approval.

Article 71.

For any patent infringement product that is manufactured and sold without the authorization of patentee, if its user and seller purchased it for production and business purpose without knowing that it was patent infringement product, and uses, offers to sell, or sells it, the user and seller shall not be liable to compensate for the damage of the patentee if he can prove that he obtains the product from a legitimate source.

Article 72.

Where any person, in violation of the provisions of Article 21 of this Law, files in a foreign country an application for a patent that divulges an important secret of the State, he shall be subject to disciplinary sanction by the entity to which he belongs or by the competent authority concerned at the higher level. Where a crime is established, the person concerned shall be prosecuted for his criminal liability according to the law.

Article 73.

Where any person usurps the right of an inventor or creator to apply for a patent for a non-service invention-creation, or usurps any other right or interest of an inventor or creator, prescribed by this Law, he shall be subject to disciplinary sanction by the entity to which he belongs or by the competent authority at the higher level.

Article 74.

The administrative authority for patent affairs may not take part in recommending any patented product for sale to the public or any such commercial activities.

Where the administrative authority for patent affairs violates the provisions of the preceding paragraph, it shall be ordered by the authority at the next higher level or the supervisory authority to correct its mistakes and eliminate the bad effects. The illegal earnings, if any, shall be confiscated. Where the circumstances are serious, the persons who are directly in charge and the other persons who are directly responsible shall be given disciplinary sanction in accordance with law.

Article 75.

Where any State functionary working for patent administration or any other State functionary concerned neglects his duty, abuses his power, or engages in malpractice for personal gain, which constitutes a crime, shall be prosecuted for his criminal liability in accordance with law. If the case is not serious enough to constitute a crime, he shall be given disciplinary sanction in accordance with law.

Chapter VIII

Supplementary Provisions

Article 76.

Any application for a patent filed with, and any other proceedings before, the Patent Administrative Department Under the State Council shall be subject to the payment of a fee as prescribed.

Article 77.

This Law shall enter into force on ______.

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