China's top legislature approved a revision of the Patent Law on Dec 29, 2008.  The revised law will take effect on Oct 1, 2009.

This was the third revision to the law promulgated some 25 years ago.  The previous two amendments were enacted in 1992 and 2000.  The first added pharmaceutical compositions to the list of patentable items and inaugurated China's membership in the Patent Cooperation Treaty ("PCT").  The second amendment brought China's Patent Law into compliance with the Trade-Related Aspects of Intellectual Property Rights ("TRIPS") Agreement.

The third revision of the Patent Law enhanced the protection standard of a patent.  An important change involves the adoption of the so-called "absolute novelty" standard that is applied internationally.  Under this standard, patent examiners are required to consider public use evidence both inside and outside China when processing patent applications.

Another important change is the removal of the requirement for all Chinese individuals and entities to first file applications in China for inventions made in China.  The revision allowed Chinese individuals and entities to file their patents for the first time in other countries, not necessarily China.  In other words, applicants can apply for foreign patents even before obtaining Chinese patents.

But the applicants are supposed to go through a security check held by patent authorities of the State Council.  Inventions which have not undergone security checks will not be granted Chinese patents, according to the new law.

The checks are intended to block the leak of some foreign applicants or foreign-owned research labs in China applying for patents to outside of China and circumventing the foreign filing requirement of the current Chinese patent law.  This foreign filing license regime is the same as the system in the United States.

The amendment raised the penalty and damage payments in cases of patent infringement.  The amendment increased the penalty for IPR infringement to 400 percent from 300 percent of the illicit profits and raised the damage payment from 50,000 yuan to 200,000 yuan even if there was no profit from infringement.

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