In the landscape of intellectual property law, China has taken a significant stride towards refining its patent legislation to curb the misuse of patent rights, ensuring a fair competitive environment. The recent amendment to Article 20 of the Patent Law embodies this endeavor, explicitly stipulating that patent applications and the exercise of patent rights must adhere to the principle of honesty and integrity. This change underscores a commitment to preventing patent abuses that could harm public interests or the lawful rights of others. Furthermore, if such abuses contribute to monopolistic behaviors, they will be addressed under the Anti-Monopoly Law of the People’s Republic of China.
The Regulation against Patent Abuse
The call from industry insiders for legislation specifically targeting the abuse of patent rights has been longstanding. Finally, this call has been answered through the formal incorporation of such measures in the patent law. The principle of honesty and integrity, a fundamental rule in civil activities outlined in Article 7 of the Civil Code effective from January 1, 2021, serves as the basis for judging patent abuses. Historically, such abuses have primarily manifested through malicious litigation, including:
- Patentees maliciously filing for patents on obviously unqualified technical solutions by exploiting the examination system of utility models and designs, which does not require substantial examination, and subsequently suing related entities post-grant.
- Plaintiffs asserting claims based on the original scope of a patent despite its modification during invalidation proceedings.
- Plaintiffs initiating lawsuits despite knowing that similar products to their design patents were publicly sold before the application date.
Exceeding legitimate bounds in enforcing rights, intending to overwhelm competitors with a barrage of disputes, also constitutes patent abuse. For instance, in one case, a defendant filed over 30 civil lawsuits and more than 20 administrative requests for patent infringement based on six patents against the same manufacturer and various users, a clear overreach violating the principle of honesty and integrity.
Antitrust Remedies for Patent Abuse Leading to Competition Restriction
The interface between technology and antitrust laws traces back to the Contract Law and further detailed in the Supreme People’s Court’s interpretation on handling technological contract disputes. At the patent level, monopolistic agreements related to patents and the abuse of market dominance using patents have been elaborated in the Anti-Monopoly Guidelines for the Intellectual Property Field issued by the State Council’s Anti-Monopoly Commission. Such monopolistic behaviors include but are not limited to excessively high pricing, bundling, refusal to license, demanding exclusive or restrictive back-licensing, prohibiting challenges to patent validity, and discriminatory practices. Litigations leveraging standard-essential patents to force standard implementers into accepting unreasonable licensing terms have been identified as monopoly practices in precedents.
The amendment to Article 20, while not introducing substantially new content into the existing legal framework, marks a clear directive for future court proceedings to directly apply this provision. This alignment between the patent law and judicial practice serves as a testament to China’s dedication to fostering an innovative ecosystem where intellectual property rights are protected and exercised responsibly, without encroaching on fair competition or the public good.
The Balance of Interests
A core principle of the patent law amendment is the balance between protecting the legitimate interests of patent rights holders and preventing patent rights abuse. This balance is crucial as it ensures that the patent system encourages innovation without causing adverse societal impacts.
Future Perspectives
With the implementation of the patent law amendment, several significant impacts on China’s patent ecosystem are anticipated. These include an improvement in patent quality, a deterrent against entities potentially abusing the patent system for unfair competition, and a clarification on the definition and handling of patent abuse actions, contributing to reduced disputes and improved judicial efficiency.
Conclusion
The amendment to Article 20 of China’s Patent Law is a crucial step towards curbing patent abuse and its implications on anti-competitive practices. By reinforcing the principle of honesty and integrity and aligning with anti-monopoly laws, this legislative update reflects a comprehensive approach to protecting innovation while ensuring market fairness. As China continues to evolve its intellectual property framework, these measures play a pivotal role in creating a balanced and just patent ecosystem, encouraging healthy competition and promoting technological advancement.
绿洲慧写 | AI 辅助专利撰写专家 