USCBC Comments on the Patent Law Amendment (Second Review Draft)

On behalf of the more than 220 members of the US-China Business Council (USCBC), we appreciate the opportunity to submit comments on the second draft amendment of the Patent Law  of the People’s Republic of China (hereby referred to as “the Draft”) to the National People’s Congress (NPC). We appreciate NPC’s continuous efforts in optimizing the legal protection of patent rights and the interests of patent owners. USCBC member companies include leading companies in a variety of fields such as manufacturing, pharmaceuticals, information technology, and services, all of which support China’s commitment to enhancing intellectual property (IP) protection, fostering a fair and transparent market environment, promoting innovation and competition, and allocating resources efficiently. They are key stakeholders in China’s innovation ecosystem in their roles as inventors, consumers, and investors in research and development (R&D).

USCBC notes that the Draft contains some robust, positive steps to reflect long-lasting concerns raised by our members. We appreciate NPC’s revisions on extending patent terms, increasing the maximum cap for willful patent infringement punishment to RMB 5,000,000, and shifting the burden of proof to the infringing party in litigation proceedings. These revisions not only address some of the common obstacles that individual inventors or entities may encounter in practice, but also reflect China’s implementation of the commitments put forward in the IP Chapter of the Phase One trade agreement with the United States.

In addition to the positive changes mentioned above, we are pleased to see that Article 75 lays out a prototype for a patent linkage system for pharmaceutical IP in China. The adoption of patent linkage would enable China to simultaneously protect the interests of innovators, safeguard public health, and provide Chinese patients with the access to the most advanced pharmaceutical products in the world. Therefore, we believe that the patent linkage system should not be limited to chemical drugs, but rather should include biologics as well. With regards to the process for generic drug producers applying for marketing approval, the current time frame appears to be unreasonably tight for both patentees and the responsible government bodies. Under the current framework, it would be challenging for patentees to be informed about such applications and respond within 30 days. It would also be challenging for the court or the IP-specialized agency under the State Council to examine and decide validity within 9 months. Additionally, it is unclear how the People’s Courts and the State Council will split the responsibilities and executive authorities.

We appreciate this opportunity to express our suggestions and have provided article-specific recommendations in detail below. Companies also expressed concerns about some unrevised articles in the Draft and we have included these comments in an appendix.