Following our last report on changes to the Measures for Administrative Enforcement of Patent Rights (the “Measures”) which came into effect on 1 February 2011, we have started seeing the impact of the Measures on local Intellectual Property Offices (“IPOs”) and administrative enforcement proceedings in China.
The Measures expressly empower competent local IPOs at city and county levels to handle passing off of patent cases and mediation of patent infringement disputes. Since early 2011, the State Intellectual Property Office (“SIPO”) has arranged a number of training courses to help prepare the officers at the local IPOs to meet the new demands. The training generally covers knowledge essential for handling patent enforcement cases, such as the Patent Law and the Administrative Law, patent infringement analysis and determination, as well as appropriate remedies. The training also emphasises the practical aspects of enforcement and allows officers to learn from past patent enforcement actions and simulated case studies.
At the same time, local IPOs are investing the resources necessary to cope with the increasing workload of administrative enforcement of patent cases. According to a half yearly working report on patent enforcement issued by the Beijing City IPO (“the Report”), in the first half of 2011, the Beijing IPO accepted 51 patent enforcement cases. Amongst those cases, 45 cases are related to patent infringement disputes, accounting for a significant 87.5% increase in such disputes over the same period in the previous year. The data is also encouraging in that about a quarter of the infringement cases involve invention patents which are generally more difficult to deal with compared to utility models and designs. During the same period, the Beijing City IPO has completed 44 cases, among which 36 cases are related to patent infringement, accounting for a 112% increase over the same period in the previous year. Among the 36 infringement cases, correction orders were made for 13 cases, which account for more than one third of the handled cases.
Based on the statistics above, it is clear that the IPOs are handling and completing significantly more cases than before. Such a notable increase is probably the result of the increased efficiency and aggressiveness of the enforcement officers. In our experience, patent enforcement officers have not hesitated to deal with complex and difficult technology and infringement issues. At the same time, patentees are realising the benefits of administrative enforcement, such as its timeliness and relative cost efficiency, over traditional court litigation proceedings. Therefore, we are finding that more and more patentees are willing to take enforcement action via the administrative route.
The Measures set out a 4 month deadline for handling a case, the first time such a deadline has been set for patent enforcement cases. For this reason, IPOs have been extremely focused on the completion of cases. The Beijing IPO has also reported that, apart from the cases that have been stayed pending the outcome of invalidation proceedings, it has completed all patent infringement cases within the prescribed time limit. This is an astonishing result.
As China adopts a bifurcated system for patent infringement and invalidation proceedings, it is essential to form a well-coordinated patent defence strategy early on in a potential patent enforcement action. Otherwise, once the patent enforcement proceeding is well underway, it may be difficult to obtain a stay of proceedings from the IPOs by filing an application for invalidation at the Patent Re-examination Board.
Another important trend observed since the Measures came into effect is that, with the assistance of SIPO, the local IPOs have established communication channels with the Patent Re-examination Board of the SIPO. The Report mentions that the Beijing IPO exchanges information with the Patent Re-examination Board so as to allow the IPO and the Board to coordinate their efforts in relation to infringement and invalidation proceedings. There is no doubt that cooperation between the IPOs and Patent Re-examination Board will facilitate both infringement and invalidation proceedings, thereby helping to remove the inefficiencies and delays caused by having two separate proceedings.
Whilst the Measures only came into effect in February this year, it can be seen that SIPO and the IPOs are taking advantage of the changes introduced by the Measures to make administrative enforcement a quick and effective procedure for enforcing patent rights. For patentees, besides traditional court litigation, administrative enforcement is a route worth serious consideration before taking enforcement action.
On the other hand, foreign companies with weak patent portfolios in China may find themselves, increasingly, on the receiving end of administrative enforcement actions. Such companies should review their patent protection strategy to see what can be done to boost their portfolio to avoid such actions being filed against them.