APAC Monthly IP Update  – September 2020

China

China publishes Measures to implement a patent linkage system

On 11 September 2020, the National Medical Products Administration (NMPA) and China’s National Intellectual Property Administration (CNIPA) published a draft of the "Measures for Implementation of the Early Resolution Mechanism for Drug Patent Disputes" (the “2020 Draft”), which represents an important step in establishing the patent linkage system in China. The 2020 Draft remains open for public comment until 25 October 2020.

With a mandate to protect the legitimate interests of pharmaceutical patent holders, the 2020 Draft encourages new drug innovation and promotes high-quality development of generic drugs. It contains 16 articles that cover the establishment of a patent information registration platform, clarification on the scope of drug patent information registration, provision of a patent status declaration system for generic drug applicants, clarification of the time limit for a patentee or interested parties to raise objections and establishment of a nine-month waiting period, categorisation of drug reviews and approvals, and encouraging challenges against pharmaceutical patents.

For more details, click here for our Law-Now with detailed analysis, and here for the full text (Chinese only) of the 2020 Draft.

China publishes Interpretation clarifying certain matters in criminal IP cases

On 12 September 2020, the Supreme People’s Court, Supreme People’s Procuratorate issued the “Interpretation on Several Issues concerning the Specific Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights III”, which came into effect on 14 September 2020. It clarifies certain matters in relation to criminal IP cases.

Trade-secret infringement

The most significant change is that the Interpretation lowers the criminal conviction standard for trade-secret infringement. The Interpretation lowers the threshold for “heavy losses” to a trade-secret holder from RMB 500,000 to RMB 300,000 in damages or illegal gains. Circumstances where the right holder does not file for bankruptcy, but is put out of business due to the infringement of trade secrets, is also recognised as causing heavy losses. It also reaffirms that if the damage or illegal gain reaches RMB 2.5 million, it should be recognised as infringement with “especially serious consequences”.

Other articles in the Interpretation concerning trade-secret infringement include an article clarifying that trade secrets obtained by illegal reproduction, unauthorised access or access beyond authorisation constitutes “theft”, and that obtaining trade secrets by bribery, fraud or electronic invasion constitute “other improper means” under criminal infringement of trade secrets. The Interpretation also stipulates methods for determining the damages or illegal gains under different circumstances; and it specifies that trade secrets should be protected during criminal prosecutions, and that the disclosure, use, or the act of allowing others to use trade secrets will make the individual criminally liable for trade-secret infringement.

Trademark and copyright infringement

To be criminally liable for using a trademark which is identical to the registered trademark without permission from the trademark owner, the Interpretation clarifies and expands the circumstances that results in the recognition of an identical trademark. For example, colour changes that do not affect the overall representation of the registered trademark will be deemed to be the identical trademark.

To be criminally liable for infringing the copyright of another, the Interpretation states that a person or entity that is a signatory of a work or sound recording will be presumed to be the copyright owner. In cases where a variety of works or sound recordings in dispute have numerous copyright co-owners, and there is evidence showing the products are illegally published or distributed and the publisher or distributor cannot prove they have the right to do so, a court can recognise that there is no authorisation from the copyright owners.

Punishment

The Interpretation states that materials and tools mainly used for producing counterfeiting products infringing the trademark or copyright of another should be confiscated and destroyed. It lists the circumstances for imposing heavier or more lenient punishment, and it stipulates punitive damages.

Please click here for the full text (Chinese only) of the Interpretation.

China publishes Provisions for Administrative Patent Cases

On 11 September 2020, the Supreme People’s Court published the "Provisions on Several Issues concerning the Application of Law in the Trial of Administrative Cases Concerning Granting and Confirmation of Patent Rights I", which came into effect on 12 September 2020.

According to the clarifications contained in the Provisions:

• claim construction should follow the principal of intrinsic evidence whereby claims, descriptions and drawings should be considered first. If the intrinsic evidence is not enough to clarify the scope of protection, extrinsic evidence such as technical manuals, handbooks, textbooks and dictionaries should be consulted. Also statements made during a patent infringement dispute will be used for interpreting the claims during the invalidation process of the same patent.
• when the patent applicant fabricates working examples, technical effects or data, the patent application should be rejected or the patent should be invalidated.
• supplemental experimental data submitted after the application date should be examined for inventive step (Article 22.3) and sufficient disclosure (Article 26.3) under the Patent Law.

The Provisions also provide clarification and confirmation regarding: circumstances constituting insufficient disclosure under Article 26.3 of the Patent Law; circumstances constituting lack of support from description under Article 26.4 of the Patent Law; definition of functional features and circumstances where functional features are deemed insufficiently disclosed and thus do not comply with Article 26.3 of the Patent Law; a court's obligation to consider the room for design when deciding a consumer’s general knowledge; and how to decide a design application or a patent’s incompliance of clear requirement for photos or drawings of a design (Article 27.2), the patentability of design (Article 23), and double patenting (Article 9). Also according to the Provisions, if a technical problem actually solved by the present invention is unidentified or identified incorrectly, it does not affect the court’s finding under Article 22.3 regarding inventive step. The Provisions specify what constitutes a violation of legal procedure; circumstances where courts can make an affirmed, reversed, partially reversed, and remanded decision; and the admissibility of new evidence submitted during administrative litigation for re-examination or an invalidation decision.

Please click here for the full text (Chinese only) of the Provisions.

China publishes Provisions for Trade Secrets Infringement Cases

After issuing the consultation draft in early June, on 11 September 2020 the Supreme People’s Court published "Provisions on Several Issues Concerning the Application of Law in the Trial of Civil Cases of Trade Secrets Infringement", which came into effect on 12 September 2020.

The Provisions provide clarifications for important issues in civil disputes concerning trade-secret infringement including:

• the protection scope of trade secrets: what constitute technical information and business information.
• the constitutive elements of trade secrets:
  • secrecy – what should be deemed to be known by the public;
  • confidentiality – what constitutes sufficient measures for keeping trade secrets confidential; and
  • commercially valuable.

• interpretation of each constitutive element for trade-secret infringement, such as what constitutes the use of trade secrets, improper measures for obtaining trade secrets, definitions of former employees and what should be taken into account when judging their handling of and access to trade secrets. It should be noted that the Provisions specifically point out that reverse-engineering products obtained through legal measures do not constitute trade-secret infringement.
• factors considered during judgment and procedural issues in civil and civil-criminal cases, such as: what constitutes materially similar for proving (at a preliminary stage) the infringement of trade secrets; the standing of trade-secret licensees for initiating trade-secret infringement actions; and evidence collection and the protection of the confidentiality of trade secrets, the burden of proof (i.e. allowing the trade-secret holder to specify the trade secret in a dispute before the end of the first-instance trial), the relief granted by courts including issuance of pre-trial evidence preservation; and the factors to be considered for the determination of injunctive relief and damages.

Please click here for the full text (Chinese only) of the Provisions.

China issues guidance on intellectual property civil disputes involving Internet and e-commerce platforms

The Supreme People’s Court published the “Guiding Opinions on Trial of Intellectual Property Civil Cases Rights Involving E-commerce Platforms” and the “Official Reply on Several Issues Concerning the Application of Law in Internet-related Intellectual Property Infringement Disputes” on 13 September 2020. The latter guidance, the Official Reply, came into effect on 14 September 2020.

The Opinions clarify the obligations of e-commerce platform operators in intellectual property disputes involving products sold on the platforms they operate. Specifically, the Opinions state the actions the platform operator should take when it knows and should have known of an intellectual-property infringement and the factors to be taken into consideration for determining if the operator “should have known” this. Also according to the Opinions, the platform operator can formulate specific implementation measures for the notification and declaration mechanism, and the type of information that can be included in the notification.

The Opinions further empower platform operators with the right to adopt measures of terminating trade and services when the business operator on the platform repeatedly and intentionally infringes the intellectual property rights of others.

The Opinions also clarify the rights and obligations of the operator of the platform (i.e. the business operator) and the intellectual property right holders. For example, the Opinions provide that business operators can submit non-infringement declarations to the platform operator and specify what type of information should be included in the declarations. They list factors that can be considered when determining whether infringement evidence or non-infringement evidence has been submitted in bad faith. They state that the right of applying for preservation can be made by both intellectual property holders and business operators under urgent circumstances where failure to take actions by the platform operator may cause irreparable damage.

The Reply stipulates that courts should review and issue a verdict on an intellectual property right holder’s application for preservation and requiring network-service providers and platform operators to take immediate measures such as deleting, blocking and disconnecting links.

The Reply also stipulates that network-service providers and platform operators have an obligation to deliver the notice sent by the intellectual property right holder to relevant network users and business operators and take necessary actions. Otherwise, the right holder may claim that the network service provider or the platform operator is jointly and severally liable with the network user or the business operator for the increased portion of the damage.

In addition, the Reply also sets a maximum of 20 working days as the time limit for the intellectual property right holder to file a complaint and inform the network service provider or the platform operator. Failure to do so will result in the termination of measures for deleting, blocking and disconnecting links. A non-infringement declaration submitted in bad faith and causing damage to the intellectual property right holder will warrant punitive damages.

Please click here for the full text (Chinese only) of the Reply and here for the full text (Chinese only) of the Opinions.

Hong Kong

Potential impact of the 2020 Plan on Hong Kong IP law practices

On 20 August 2020, a press conference was held highlighting the significance and purpose of the State Council-approved "Master Plan for the Comprehensive Deepening of the Pilot Programme for the Innovative Development of the Trade in Services" (the “2020 Plan”), which had been released by the Chinese Ministry of Commerce on 12 August 2020. The 2020 Plan includes eight pilot projects and 122 specific measures to open, facilitate and support the innovative development of Trade in Services, including in the areas of law and technology.

The measures aim to promote and facilitate the cross-border flow of capital, technology, personnel, and goods related to the services sector of each pilot area, and include:

• allowing foreign patent agencies to establish representative offices in China;
• allowing domestic law firms to hire foreign lawyers from Hong Kong and Macau as foreign legal consultants or as practicing lawyers; and
• permitting digital RMB pilot projects in the Guangdong-Hong Kong-Macau Greater Bay Area.

Hong Kong IP lawyers may see this as an opportunity to expand their practices in mainland China or form partnerships with mainland law firms and patent agencies. By tapping into the growing innovation on the mainland, such as digital RMB pilot projects, Hong Kong IP lawyers may be able to better help their clients register IP rights and protections in China. The 2020 Plan could also eventually lead to an integrated or single system of IP registration.

However, the many measures listed on the 2020 Plan are still going through a “stress test” for an undisclosed duration, and the easing or removal of restrictive measures will take a substantial amount of time since the means by which provinces adhere to the measures are left to the discretion of provincial governments.

For the full text of the 2020 Plan in Chinese, please click here.

For the full script of the press conference on the 2020 Plan in English, please click here.

Republic of Korea

Amended Trade mark Act, Design Protection Act and Patent Act allowing certain punitive damages is expected to be implemented on April 2021

Following an amendment made to the Patent Act, punitive damages will be introduced to the Trade mark Act and the Design Protection Act for cases of infringement of trade marks and designs and misappropriation of ideas.

The Korean Intellectual Property Office announced that Intellectual Property Protection Laws such as the Trade mark Act, the Design Protection Act and the Unfair Competition Prevention Act, which introduce the concept of "three-fold compensation" for cases of trade mark and design infringement and misappropriation of ideas, passed the National Assembly's plenary session on 24 September 2020.

A partial amendment of the Trade mark Act and the Design Protection Act calls for the introduction of punitive compensation of up to three times the amount recognised as damages for intentional violation of trade mark or design rights. The plan is to expand the punitive damages system to include trade marks and design sectors for the infringement cases further from patents and trade secrets sectors introduced in the Patent Act and the Unfair Competition Prevention Act in 2018.

A partial revision of the anti-corruption law was also passed, which calls for the introduction of a punitive compensation system that requires compensation of up to three times the recognised amount for damages resulting from the act of stealing ideas.

Many analysts have pointed out that the reason that infringement of intellectual property has not been eradicated in Korea is because the profit from infringement is usually greater than the penalties for violating intellectual property rights. In light of this punitive damages system, which was first introduced for patent infringement and will soon be expanded into the areas of trade mark and design infringement and misappropriation of ideas, the overall effectiveness of intellectual property protection in Korea will be further strengthened.

For more information, please click here.

Singapore

Expansion of SG Patent Fast Track programme after 1 September 2020 includes related trade mark and registered design applications

On 1 September 2020, the Intellectual Property Office of Singapore (IPOS) expanded its SG Patent Fast Track programme, a technology-neutral patent acceleration system that includes the acceleration of related trade mark and registered design applications for IP proprietors. The programme will be renamed SG IP Fast Track.

Under SG IP Fast Track, a straightforward application may be granted or registration completed in up to:

• six months for patents (which is unchanged from the SG Patent Fast Track programme);
• three months for related trade mark applications; and
• one month for related registered design applications.

Eligibility criteria for acceleration is as follows:

• an applicant must have a successful request for patent acceleration under SG IP Fast Track before requesting the acceleration of a related trade mark and a registered design application;.
• the related trade mark and registered design applications must be filed within one month after notification that the patent application has been accepted under SG IP Fast Track.

For trade marks, further key requirements for acceleration include:

• full compliance with an application’s specifications for goods or services with the IPOS pre-approved classifications;
• exclusion of certain trade mark applications such as series marks, non-conventional marks, certification or collective marks;
• objections and deficiencies must be resolved within a shorter duration;
• no requests will be allowed for time extensions.

For registered design applications, further key requirements for acceleration include:

• objections and deficiencies must be resolved within a shorter duration.

• no requests will be allowed for time extensions.

Presently, there is a cap of five accelerated patent applications per month and a cap of ten applications per year per entity. There is no cap on the number of trade mark and registered design applications that can be accelerated.

For more information on SG IP Fast Track, click here.

IPOS and SBF announce Workforce for IP-Savvy Enterprises (WISE) initiative for business IP management

The Intellectual Property Office of Singapore (IPOS) and the Singapore Business Federation (SBF) have partnered to launch the Workforce for IP-Savvy Enterprises (WISE) initiative.

WISE helps Singapore companies identify new business opportunities and acquire new capabilities through Intellectual Property (IP) to emerge stronger from the COVID-19 pandemic. WISE builds upon the Framework for IP launched last year to institutionalise IP skill sets and management practices.

Created through a Memorandum of Understanding (MOU) signed on 24 August 2020 between IPOS and SBF, the WISE initiative aims to do the following:

• raise awareness and knowledge of IP as a value creator by organising IP and innovation seminars for Singapore-based businesses and enterprises;
• capacity building and training of Singapore-based businesses and enterprises;
• help companies access a suite of IP services through IPOS and its subsidiaries to SBF member companies;
• share IP-related content from SBF and IPOS through publications sent to key stakeholders, such as case studies and commentary stories;.
• support joint research and studies between SBF and IPOS.
• help companies take their IP abroad through programmes and events to promote Singapore IP service providers with overseas companies and local companies planning to expand regionally.

For more information, please click here.