Posts Tagged: "China"

While China is becoming an increasingly attractive patent filing destination for foreign companies, foreign counsels are often confused by the country’s inventive step requirement. Indeed, Chinese patent examiners often use abstract legal terms, such as “prominent substantive features” and “notable progress,” in their inventive step analysis. This article provides an overview of the inventive step requirement in China, in comparison with the non-obviousness standard in the United States.

On October 17, 2020, the Standing Committee of the Thirteenth National People’s Congress (China’s top legislature) passed the Fourth Amendment to the Chinese Patent Law, which will become effective on June 1, 2021 (“Effective Date”). As I was digesting the news and browsing through the 29 newly published changes made to the previous version of the Chinese Patent Law, which was passed in 2008, a line from “The Song of the Pipa Player”, a popular poem written in 816 A.D. by Bai Juyi (one of the three most famous poets in China’s Tang Dynasty), came to mind: “Only after our repeated calls did she appear; her face half hidden behind the pipa she held.” Indeed, while the First, Second, and Third Amendment to the 1984 Chinese Patent Law each came out with clockwork precision eight years after the previous enactment—in 1992, 2000, and 2008, respectively—this Fourth Amendment took 12 years to incubate, and struck a number of new areas that will need to be further revealed in future practice.

Acquiring intellectual property from China has just become more complicated because of China’s Export Control Law. On October 17, 2020, the Standing Committee of China’s legislature, the National People’s Congress (NPC), passed the Export Control Law of the People’s Republic of China, which went into effect on December 1, 2020. The Export Control Law applies to, among other things, “dual-use items” and “goods, technologies, services and items relating to the maintenance of national security and national interests.” ([Official Chinese text]; [Unofficial English translation]). These provisions make it likely that cutting-edge technologies China has invested heavily in, such as artificial intelligence and semiconductors, will be subject to China’s export control policy.

On October 17, the Standing Committee of China’s National People’s Congress completed its amendments to China’s Patent Law, marking the fourth time that China has revised its Patent Law since 1992, as well as the first revision since 2008. The amendments, which will go into effect in July 2021, include several patent owner-friendly changes, including increased statutory damages for parties proving patent infringement and the creation of punitive damages to increase damages awards up to five times upon findings that a party intentionally infringed patent claims.

Samsung Display and LG Display, the two South Korean technology behemoths, announced plans earlier this year to stop the production of LCDs by the end of 2020. The announcements first appeared in Reuters’ reports and aim to consolidate the two companies’ lead in organic light emitting diode (OLED) panels, while conceding to Chinese manufacturers who have aggressively expanded their LCD productions. LCD prices have slumped over the years, as Chinese manufacturers backed by state subsidies have aggressively expanded production capacities. The plunging LCD prices have widened the operating losses at both Samsung and LG Display and finally led to the decision to cut production by year’s end.

The National Medical Products Administration (NMPA), in conjunction with the China National Intellectual Property Administration (CNIPA), recently solicited public comments on the draft of “Measures For the Implementation of Early Resolution Mechanisms for Drug Patent Disputes (Trial)” (“Draft Measures”). The purpose of the Draft Measures is to establish an early resolution mechanism for drug patent disputes. The deadline for submission of comments is October 25, 2020.

Why are the tech companies so in love with China? Are they are begging for China to steal their intellectual property? Sometimes it feels that way. The Wall Street Journal is reporting that U.S. companies that see their fortunes tied to China are raising concerns with the White House over a Trump Administration Executive Order that would ban WeChat from the United States. U.S. companies, including Apple, Ford, Walmart, Walt Disney, Procter & Gamble and Intel “are concerned the administration’s action could effectively cut them off from access to the lucrative China market, for example by ending their ability to accept payments or advertise on WeChat.”

Much has been written about the uncertainty in U.S. patent law concerning laws of nature, natural phenomena, and abstract ideas following the Supreme Court’s decisions in Mayo v. Prometheus and Alice Corp Pty Ltd v. CLS Bank Int’l. A recent decision from the Enlarged Board of Appeal at the European Patent Office (the Enlarged Board), however, demonstrates that the United States is not alone in grappling with issues surrounding patent eligibility. In the case of genetically modified plants and animals, questions arise on where to draw the line between human invention and biological processes. Earlier this year, the Enlarged Board reversed a 2015 decision that had held that product-by-process patents could be sought for genetically modified plants and animals despite a patent exclusion for “essentially biological processes.” 

With a growing number of users and increased demand for consumer electronics, smart-wearables, electric vehicles, Internet-of-Things (IoT) and Internet-of-Everything (IoET), the need for powering such devices and for hassle free charging has to keep pace with this rapid growth. “Wireless Charging” is the process of electrically charging battery-powered devices and equipment without the need for a wired electrical power connection. Broadly speaking, it includes three sub-types of charging: Inductive Charging, Resonance Charging, and Radio Charging.

Societies are always most vulnerable in times of crisis. Right now, America is in the midst of the COVID-19 outbreak, subsequent economic devastation, and justified nationwide protests for social and criminal justice reform—perhaps an unprecedented level of unrest. As such, it is also perhaps more important than ever for us to demonstrate our ability to unite, cooperate, and innovate. Fortunately, through the improved protection of our intellectual property (IP), America has an opportunity to do exactly that. COVID-19 has demonstrated the equal importance of encouraging and protecting America’s innovators. Worldwide manufacturing shutdowns, part of the global effort to slow the spread, exposed our country’s reliance on China for many of our basic necessities and raw materials. America often generates the ideas of tomorrow. But, until we can generate the ensuing products as well, independence from China will be impossible. This reliance, and lack of investment in domestic production, is proving to have serious consequences.

On June 9, the full Senate Judiciary Committee held a hearing titled “COVID-19 Fraud: Law Enforcement’s Response to Those Exploiting the Pandemic.”  The hearing, which was led by Chairman Sen. Lindsey Graham, R-S.C., included testimony by William Hughes, Associate Deputy Attorney General United States Department of Justice, The Honorable Craig Carpenito, United States Attorney District of New Jersey, Calvin Shivers, Assistant Director Criminal Investigative Division Federal Bureau of Investigation, and Michael D’Ambrosio, Assistant Director United States Secret Service Department of Homeland Security. Following an acknowledgment of the tragic death of George Floyd by each of the witnesses, the testimony focused on the response to fraud that has resulted from the COVID-19 pandemic, including the sale of fraudulent personal protective equipment (PPE) and cyber-enabled fraud. In general, Hughes focused primarily on the Department of Justice’s response to criminal conduct relating to the COVID-19 pandemic, Carpenito focused on hoarding and price gouging, Shivers focused on fraud schemes and illicit finance activities that seek to exploit the COVID-19 pandemic, and D’Ambrosio focused on the U.S. Secret Service’s work to counter cyber and financial crimes exploiting the pandemic.

It happened to Japan in the 1950s. Then it happened to Taiwan, and then Korea. Rapidly-developing countries started out relying on copying foreign technologies to drive their economies. But as growth increased and investments in education led the way to domestic innovation, each country found that a framework of strong intellectual property (IP) laws was necessary to sustain economic expansion. For many years, the relationship between China and the United States (as well as other Western countries) around IP has felt like pulling uphill on a very heavy wagon, as we tried to convince, cajole and threaten, often demanding reforms as part of trade negotiations. The relationship with China was further weighed down by the perception that the government was itself involved in misappropriation and that in general it was a proponent of weak IP protection. This past January, in the midst of a tariff war, China signed the “Phase One Agreement” that promised certain improvements in its trade secret regime in return for the United States dialing back some of the trade pressure.

Much has happened to the patent subject matter eligibility standard in the U.S. since Mayo. On April 27, 2020, Judge Paul Michel and John Battaglia published an excellent article on IPWatchdog analyzing the U.S. Section 101 patent subject matter eligibility jurisprudence. In that article, Judge Michel and Battaglia reminded judges and practitioners to reference “the more-favorable foreign patent laws on the patent eligibility for diagnostic testing, business methods and software … in countries such as England, China, or the European Union … to inform such a judicially created ineligibility standard, as opposed to the U.S. Constitution or a federal statute.”  Here, we take a quick comparative look at the current patent subject matter eligibility standard in China.

For months now, the news has been plastered with updates on COVID-19, the novel coronavirus that has upended lives and trickled into near every facet of the modern experience. Across the political aisle, consumers and producers are questioning the current level of reliance on Chinese production for drugs, ventilators, and masks. Despite these concerns, most manufacturing alternatives, including India, are still working to reestablish normalcy, making China even more indispensable. Realistically, China is and will remain the dominant player for outsourcing production for at least the next five years. Now that Chinese factories are producing close to their full capacity, foreign investors should refocus their attention to newfound legal issues that may complicate the supply chain.

Yesterday, U.S. Senators Thom Tillis (R-NC), Richard Blumenthal (D-CT), John Cornyn (R-TX), and Ben Sasse (R-NE) sent a letter to Federal Bureau of Investigation (FBI) Director Christopher Wray and Cybersecurity and Infrastructure Security Agency (CISA) Director Christopher Krebs regarding a notice issued last week by their agencies alerting American companies and research institutions about attempted attacks by hackers affiliated with the Chinese government.  According to the notice, these hackers “have been observed attempting to identify and illicitly obtain valuable …. (IP) and public health data related to vaccines, treatments, and testing from networks and personnel affiliated with COVID-19-related research.”