Newly revised patent law underscores national innovation

China's top legislature has approved a new version of the Patent Law, a move in line with the national strategy of building an innovative country and determination to protect pharmaceutical innovation amid the COVID-19 pandemic.

The Standing Committee of China's National People's Congress passed the amended law on Saturday, and the law will be officially enacted on June 1 next year.

The law has stipulated a harsher punishment for violators, who can be fined from 30,000 yuan ($4,476) to 5 million yuan. And courts can ask violators to pay up to five times the losses caused, Xinhua reported.

Acting as a long-time guard against patent infringement, the amended law is in line with the national strategy to build an innovative country, said analysts. 

Shan Xiaoguang, dean of Shanghai International College of IP at Tongji University, told the Global Times on Monday that some said the amendment showcases China's response to its promise in the Phase One trade agreement between China and US, but it is more about an internal motivation.  

China promised to improve protection of intellectual property rights in the agreement with the US in 2020, but the patent law revision began in 2018.  

In recent years, China has greatly improved its innovation capacity and its amount of intellectual property. The amended law is a strong boost for enterprises and institutions, indicating that China gives equal protection to both Chinese and foreign counterparts, said Shan. 

China has been the world's leading country in terms of patents since 2011. According to data from the China National Intellectual Property Administration (CNIPA), 2.195 million patents of three types (invention patents, utility model patents and design patents) were filed in the first half of 2020.

The revised law includes more drug-related content, which is a bonus for drug companies producing anti-COVID-19 products.

The CNIPA said that the amended law also covers time compensation for patent holders.

Time compensation for a drug-related patent is a normal practice in the world as the research and development cycle is long, and investment is large, said Shan, noting that the medical field is of vital importance in the new round of scientific and technological progress.

As for products that have been used in public health emergencies, but cannot be patented due to loss of "novelty," the amended law added special clauses to eliminate such concerns.

Chinese drugs usually go through administrative approval and must be proved to be safe and effective before they are put on the market, Song Xiaoting, director of the Research Center of Medical Law and Pharmaceutical Intellectual Property of Tongji University, told the Global Times on Monday.

Song revealed that a traditional Chinese medicine called "detoxification soup," which was used at the beginning of the epidemic later encountered difficulties in obtaining a patent because of loss of novelty.

"The revised law encourages drug companies to put new products on the market earlier if needed in a public health crisis, reducing the risk of drug dispatching postponement due to patent concerns," said Song.

China has amended its patent law four times - in 1992, 2000, 2008, and 2020 - since the law was first enacted in 1985, according to the CNIPA.

Patent law is not just about protecting the interests of companies; it's also about balancing public interests with the interests of the patent holders, said Song.