Amendment to the Patent Law adopted by China's top legislature over the weekend strengthened protection for patent holders, stipulated harsher punishment for violators and encouraged innovation in the pharmaceutical sector.
The amended law, passed by the National People's Congress Standing Committee on Saturday, aims to provide a long-term mechanism for combating patent infringement, promoting high-quality development and solving new problems that emerge.
The law, for example, clarifies that courts can demand violators pay compensation ranging from 30,000 yuan to 5 million yuan ($4,500 to $747,000) when the loss to patent holders, the benefit gained by violators or the patent license fee cannot be determined.
If someone is found to have intentionally and seriously harmed others' patents, compensation will be capped at five times the loss suffered, the benefit received or the patent license fee.
The amended law will come into effect on June 1.
"Increasing the punishments or improving the infringement cost is a bigger threat to violators and will make them pay a heavy price, which also shows our country's determination to strictly protect intellectual property," said Wang Ruihe, an official from the NPC Standing Committee's Legislative Affairs Commission.
To ensure patients can be supplied with safe and effective drugs in a timely manner, the law now includes more stipulations designed to protect drug-related patents.
For instance, it provides a legal basis for the early settlement of disputes over pharmaceutical patents, allowing patent holders and those seeking market approval for a drug to initiate a lawsuit during the approval process to get a verdict on whether a drug's technical composition infringes on others' patents.
"The move is to help solve disputes as soon as possible before a patent goes on the market, and to better balance the interests of patent holders and enterprises producing generic drugs. It is also to help patients obtain drugs quickly and further guarantee public health," said Song Jianhua, head of the National Intellectual Property Administration's treaty and law division.
"Drug developers spend a lot on research, so intellectual property rights in the industry should be strongly protected, particularly as sustained innovation will help us continue to obtain safe medicines and fight diseases."
Cao Jianming, a vice-chairman of the NPC Standing Committee, also lauded the new content on drug-related patents, saying the amendments will prove essential in safeguarding patent holders' legitimate rights, stimulating economic growth and improving high-quality development.
Chinese legislators have stepped up the review of IP-related draft laws or amendments in recent years. A revised Trademark Law came into effect in November, and an amendment to the Copyright Law was submitted to the top legislature in August.