The State Intellectual Property Office of China (SIPO) recently completed the drafting of the third revision to the Patent Law of China, and submitted its draft to the Legislation Office of the State Council for approval. In accordance with the government's legislative plan, the new edition of the Chinese Patent Law will be released in 2008.

At a recent industry event, “China Life Sciences Summit · Beijing 2007”, Jiang Jiancheng, a partner with Peksung Intellectual Property Ltd. (a SIPO designated intellectual property law firm), provided a thorough review of pharmaceutical-related provisions in the proposed third edition of the Patent Law of China. These provisions, according to Jiang, fall into three areas:

IP infringement exceptions

The draft for the third revision of the Chinese Patent Law expands the scope of exceptions for pharmaceutical-related IP infringements. 

The article 74 of the drafted new law includes the article 63 of the existing patent law that specifies four non-infringing situations: 1) where permitted or licensed by the patent holder; 2) where patented product was made before the date of filing of the application for patent and it continues to be made or used within the original scope only; 3) where any foreign means of transport which temporarily passes through China uses the patent concerned; and 4) where any person uses the patent concerned solely for the purposes of scientific research and experimentation.

A new non-infringing situation is added in the article 74 of the draft: "where the patented drug or medical device is made, used or imported for the purpose of obtaining or providing information for administrative evaluation and approval, and those who make, use or sell the patented drug or medical device for such a purpose shall not be deemed an infringement of the patent right."

Jiang pointed out also that the Chinese court has already adopted the spirit of this new addition in the recent legal battle between Sankyo and Beijing Wansheng Pharma over the production of patented omesartan (for registration purpose) in which the defendent, Beijing Wansheng Pharma, was found not guilty of IP infringement. He claimed that SIPO referenced the relevant US legal practices to come up with this addition. He said this new change will be advantageous to generic drug makers.

Scope of compulsory licensing expanded to epidemic diseaes

Jiang said that the existing patent law does not specify the situations under which compulsory licensing is warranted. Article 49 of the draft for the new patent law provides that "the patent administrative organ under the State Council may grant a compulsory license to exploit the patent for invention or utility model in order to prevent, treat and control epidemic diseases."

An article 50 is added to specify that "the patent administrative organ under the State Council may grant compulsory licenses of epidemic disease drugs patented in China to capable manufacturers for production and export to developing countries without or lack sufficient production capability for such products or the least developed countries when they desire to import such products from China.

However, Jiang noted that China is very careful with compulsory licensing and has so far not granted any such license.

Patenting of inventions relating to genetic resources

Jiang reported that the draft for the new patent law added additional provisions on patenting of inventions relating to genetic resources in order to contain the growing problems in this area.

Article 25 of the draft describes the situations where patents can not be granted. An additional situation covering patenting of invention relating to genetic resources is now included and it provides: "where completion of an invention is entirely dependent on genetic resources, patents shall not be granted if the attainment and utilization of such genetic resources is against relevant laws and regulations. Also the article 26 of the draft requires that where the completion of an invention is entirely dependent on genetic resources, the origin of such genetic resources must be specified in the patent applications.

However, Jiang commented that the definition of an invention being "entirely dependent on genetic resources" is not well-defined, so it is likely that the interpretation of this will be left to each individual patent examiner.