China’s Fourth Patent Law Amendment: Key Changes for Foreign Applicants

Introduction

China’s fourth amendment to the Patent Law was adopted in October 2020 and took effect on June 1, 2021. The revised Implementing Regulations subsequently took effect on January 20, 2024.

Together, these changes introduced important rules on patent term compensation, design patents, infringement damages and patent licensing.

1. Patent Term Compensation

The amended Patent Law introduced patent term compensation for unreasonable delays in the examination of invention patent applications.

Compensation may be available where an invention patent is granted more than four years after its filing date and more than three years after the request for substantive examination, provided that the delay was not caused by the applicant.

A separate compensation mechanism applies to qualifying invention patents relating to new drugs approved for marketing in China.

Key points include:

• The request must generally be filed within the applicable statutory period;

• Eligible patents may include new-drug product, preparation-method and medical-use patents;

• The compensation period may not exceed five years; and

• The total effective patent term after marketing approval may not exceed fourteen years.

Patent owners should review eligibility and filing deadlines promptly after patent grant or Chinese marketing approval. 

2. Design Patent Protection

The amendment made several important changes to China’s design patent system:

• The protection term was extended from ten years to fifteen years;

• Partial designs became eligible for patent protection; and

• Domestic priority may be claimed within six months for qualifying design applications.

Partial design protection allows applicants to protect commercially important portions of a product rather than being limited to the product’s overall appearance.

These changes provide greater flexibility for protecting product components, graphical user interfaces and other visual features.

3. Stronger Patent Enforcement

The amended Patent Law strengthened the remedies available in patent infringement cases.

For intentional infringement committed under serious circumstances, Chinese courts may award punitive damages of between one and five times the amount calculated on the basis of the patent owner’s losses, the infringer’s profits or a reasonable multiple of the patent licence fee.

Where those amounts are difficult to determine, statutory damages may range from RMB 30,000 to RMB 5 million.

Courts may also order infringers to provide relevant accounting records and other evidence under their control where the patent owner has made reasonable efforts to prove the amount of damages.

4. Good Faith and Open Licensing

The current framework requires patent applications and the exercise of patent rights to follow the principle of good faith.

China has also introduced an open-licence system. A patent owner may publicly declare its willingness to license a patent and specify the applicable royalty payment method and standard.

The system provides patent owners with an additional option for promoting patent commercialisation and technology transfer.

Practical Implications for Foreign Applicants

Foreign applicants and patent owners should:

• Review recently granted invention patents for possible term compensation;

• Monitor Chinese marketing approvals for pharmaceutical patents;

• Consider partial design protection for important product features;

• Preserve sales, licensing and infringement evidence;

• Review Chinese design portfolios in light of the fifteen-year protection term; and

• Evaluate whether open licensing may support commercialisation.

Strategic Recommendations

Applicants should consider the following actions:

1. Monitor patent term compensation deadlines carefully.

2. Coordinate Chinese pharmaceutical patents with local regulatory approval strategies.

3. Use partial design applications to protect commercially important product elements.

4. Maintain reliable evidence of patent use, licensing and infringement.

5. Review Chinese patent portfolios regularly to reflect the current legal framework.

For assistance with Chinese patent filing, design protection, patent term compensation or enforcement, contact the Reehor IP team.