In order to ensure the effective implementation of the newly revised Patent Law, further improve China's patent protection system, and align with relevant international rules, the State Council issued the "Decision on Amending the Implementing Regulations of the Patent Law of the People's Republic of China" on December 11, 2023. The revised "Implementing Regulations" has come into effect as from January 20, 2024. This revision involves significant changes and adjustments to the system, overall representing an important response to the needs of innovation entities and an optimization of the patent legal system.
The "Implementing Regulations of the Patent Law of the People's Republic of China" was promulgated by Decree No. 306 of the State Council of the People's Republic of China on June 15, 2001. It underwent its first revision based on the Decision of the State Council on Amending the Implementing Regulations of the Patent Law of the People's Republic of China issued on December 28, 2002, and its second revision based on the Decision of the State Council on Amending the Implementing Regulations of the Patent Law of the People's Republic of China issued on January 9, 2010. The current third revision is in accordance with the Decision of the State Council on Amending the Implementing Regulations of the Patent Law of the People's Republic of China issued on December 11, 2023.
To assist you in better understanding the significant changes in the revised "Implementing Regulations of the Patent Law" and to better serve your needs regarding patent prosecution and protection, we have summarized and explained the relevant contents and procedures. We hereby introduce the new regulations concerning open patent licensing, in conjunction with the related content from the newly revised "Guidelines for Patent Examination."
1. Submission of the Open License Declaration:
① Who can submit the Declaration: patentee, all co-owners of the patent; or the parties as specified in the agreements among all co-owners of the patent with respect to matters related to open license;
② When to submit the Declaration: after the announcement of the grant of patent;
③ Who should sign/seal the Declaration: patentee, representative(s) of co-owners (with a written declaration of consent from all co-owners); in the case where a patent agency is appointed, the Open License Declaration shall be sealed by the patent agency and accompanied by a written declaration signed or sealed by all co-owners;
④How to submit the Declaration: in principle, the Open License Declaration are submitted electronically; where electronic submission is not feasible, the relevant documents may be submitted in person or by mail to the designated location specified by the China National Intellectual Property Administration (CNIPA);
⑤ What can be open-licensed: granted patents including invention patents, utility model patents, and design patents;
⑥ Cases where open licensing shall not be implemented:
the patent is within the validity period of exclusive or sole license;
the ownership of the patent is in dispute or the People's Court has issued a preservation measure on the patent, and relevant procedures have been suspended;
the annuity has not been paid as required;
the patent is pledged, and the consent of the pledgee is not obtained;
the patent has already been terminated;
the patent has been declared invalid in its entirety;
the patentee of a utility model or design patent has not submitted a patent evaluation report;
the conclusion of the patent evaluation report states that the utility model or design patent does not meet the requirements for patent grant; and
other circumstances that hinder the effective enforcement of the patent.
○7 Matters to be stated in the Declaration:
patent number;
name of the patentee(s);
payment method and criteria for patent licensing fees;
duration of the patent license;
contact information of the patentee(s);
commitment from the patentee(s) regarding the eligibility for Open License;
brief explanation of the basis and method for calculating the licensing fees (generally within 2000 words; where payment is made at a fixed rate, it generally does not exceed CNY 20 million, and for amounts exceeding CNY 20 million, the patentee may use other methods of licensing; where payment is made in the form of a commission fee, the commission is generally no more than 20% of net sales or no more than 40% of profits);
other specific matters that need to be clarified.
The content of the Open License Declaration should be accurate and clear, without any commercial promotional language.
* If the patentee pledges the patent subject to open licensing, when registering the pledge, they should provide the pledgee’s written declaration on consenting to continue the implementation of open licensing.
2. Announcement and Effectiveness of Open License Declaration:
The Declaration shall be announced if it complies with the provisions; otherwise it shall not be announced. If the patentee makes an Open License Declaration by means of providing false materials or concealing facts, etc., the Declaration should be revoked once the fraudulent actions are discovered.
The relevant matters of the Open License Declaration shall be registered in the patent register and announced in the patent gazette. The published information includes: main classification code, patent number, Open License Declaration number, patentee, invention title, filing date, date of the grant announcement, payment method and criteria for patent licensing fees, duration of the patent license, contact information of the patentee, and the effective date of the Open License Declaration.
The Open License Declaration shall take effect from the date of announcement.
3. Withdrawal of Open License Declaration:
As to who can make the withdrawal and who shall sign and seal the withdrawal, the parties involved are the same as those for the submission of an open license declaration. See ① and ③ in item 1 above.
The withdrawal of an Open License Declaration shall not be accompanied by any conditions.
If the conditions for withdrawal are met, a notice of withdrawal shall be announced, and if not, the CNIPA shall provide reasons.
The withdrawal takes effect from the date of announcement.
For Open License Declarations that should be withdrawn but have not been, the CNIPA will terminate or revoke the Open License Declaration and make an announcement.
The published information includes: main classification code, patent number, Open License Declaration number, patentee, invention title, date of withdrawal of the Open License Declaration, etc.
4. Effectiveness of the Open Patent Licensing Agreement:
Conditions: any organization or individual who notifies the patentee in writing of their willingness to implement the open-licensed patent, and agrees to pay the licensing fees as announced;
Additional materials: where an entity or individual in China implements an open patent license, and foreigners, foreign enterprises or other foreign organizations, or individuals, enterprises or other organizations in Hong Kong, Macao and Taiwan wish to implement the open-licensed patent, they shall comply with the Regulations of the People's Republic of China on the Administration over Technology Import and Export and the Measures for the Administration of Registration of Technology Import and Export Contracts.
The duration of the open patent licensing implementation is from the effective date of the open licensing agreement until the expiration of the license period.
5. Recordation of the Open Patent Licensing Agreement:
Both the licensor and the licensee may submit the request for filing.
Documents Required:
application form for recording the patent licensing agreement, signed by the requesting party;
written notice from the licensee to the patentee;
proof of payment of licensing fees made by the licensee to the patentee (or proof of receipt of licensing fees by the patentee);
proof of identity for the requesting party;
Power of Attorney specifying the authority granted, if applicable;
proof of identity of the authorized party; and
any other required documentation.
6. Handling of Fee Reduction Procedures during the Open Patent Licensing Implementation Period:
When a party applies for the recordation of an open patent licensing agreement, it shall be considered as the patentee simultaneously requesting a reduction in patent annuity. The reduction applies to annuities from the date of recordation until the expiration of the patent term.
If the patentee withdraws the Open License Declaration, they will no longer enjoy fee reductions in this respect starting from the next patent year.
If the patentee meets the conditions for two different types of fee reductions, the higher reduction percentage shall be applied.
7. Procedures that Require the Withdrawal of Implemented Open Licensing:
requesting a change in bibliographical data due to the assignment of patent;
the patentee submitting a written declaration to abandon their patent rights.
* If the patentee changes due to a name change or other reasons and wants to continue the implementation of an open license, they shall timely go through the procedures related to the withdrawal of the original Open License Declaration and the submission of a new declaration. If the open licensing will no longer be implemented after the change of the patentee, the withdrawal procedures shall be handled in a timely manner.
8. Consequences of Fraudulent Actions:
The patentee shall not, by means of providing false materials or concealing facts, etc, make Open License Declarations or obtain annuity reductions during the open licensing implementation period. If an applicant or a patentee violates this provision, they may be warned by the patent enforcement department at the county level or above and may face a fine of up to CNY 100,000.
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