How a Trademark Case Helps Illuminate China’s NEW Patent Rules

China’s reduction of the reserve requirement ratio for all banks beginning from February 5 has been warmly welcome because this measure is expected to help revive the economy by injecting more cash into the banking system. 

Another measure that is likely to help improve China’s economy but seems to have drawn little attention outside the legal community is the release of a set of revised rules to implement China’s Patent Law.  If applied effectively, these revised rules have the potential to strengthen China’s patent protection mechanism, making the country more appealing to foreign investors.   

China’s NEW Patent Rules

On December 11, 2023, the State Council issued a revised version of its Detailed Rules for the Implementation of the Patent Law of the People’s Republic of China (“Detailed Rules”), which became effective on January 20.  The revision is extensive and, as a result, the revised set of rules has 149 articles, compared with 123 articles in the old version.  

Among the new articles are nine that aim at harmonizing the Chinese patent system with the Hague Agreement Concerning the International Registration of Industrial Designs (“Hague Agreement”), to which China became a party on May 5, 2022.  As explained by the World Intellectual Property Organization (“WIPO”), a specialized agency of the United Nations that administers the Hague Agreement, the agreement “allows industrial designs [(e.g., shapes, patterns, lines, or colors of a product)] to be protected in multiple countries or regions with minimal formalities”.   

Essentially, the Hague Agreement enables an owner of an industrial design to efficiently seek protection of the design from multiple Contracting Parties to the agreement--there are nearly 80 in total--by merely filing a single application.  To this end, a natural person or legal entity having a connection (e.g., through domicile or incorporation) with a Contracting Party may apply to have an international registration of an industrial design that the person/entity owns by filing with the International Bureau of the WIPO an application in which any Contracting Party whose protection is sought is “designated”. 

Each Contracting Party designated by the applicant then examines the industrial design and may refuse protection in accordance with its own law and inform the International Bureau of the WIPO accordingly.  The refusal, however, cannot be “on the ground that requirements relating to the form or contents of the international application […] have not been satisfied under the law of the Contracting Party concerned”.  This restriction reflects the Hague Agreement’s goal to avoid refusals based on formalities only.

To harmonize with the Hague Agreement, the Detailed Rules specifies that “the State Council’s department of patent administration” shall handle international applications in which China is designated and sets forth related requirements and procedures that the department shall follow. 

The Detailed Rules appears to harmonize with the Hague Agreement quite well.  However, potential disharmony may occur.  For example, if in the course of examining an international application, the State Council’s department of patent administration cannot, due to the lack of certain crucial information, determine whether the industrial design at issue meets all the substantive requirements of Chinese law, what should the department do? 

A Landmark Ruling on Trademarks

In the face of the disharmony described above, the State Council’s department of patent administration may find Guiding Case No. 114 inspiring, even though it is not a patent case. [...]

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Important Developments

On Monday, a Hong Kong court ordered the liquidation of China Evergrande Group, as the real estate developer failed to restructure its massive debt.  Intriguingly, on the same day, arrangements allowing Hong Kong courts and their counterparts in Mainland China to mutually recognize and enforce their civil and commercial judgments became effective.  How to understand (1) these developments; and (2) their implications for your investment plans and for the relations between Hong Kong and Mainland China?  Interested in scheduling a consultation call with Dr. Mei Gechlik?  Please send an email to contact@sinotalks.com.  Her recent article titled The Future of China’s Real Estate Sector: Indications from a Series of Enforcement Cases should be noted. 

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