Most companies in the United States have concerns over IP protection before entering the Chinese market. However, it is a noted challenge to enforce IP rights in every foreign country, and as such, U.S. companies should file to protect their IP in China.

Having your valuable patents registered and recognized in China will put you in a much better position when you explore options against infringers. After all, the patents published or granted by the USPTO are accessible to potential infringers from every corner of the world with an internet connection, including China.

Here are several other reasons why you should pursue patent protection in China, sooner than later.

1. The grace period for novelty in China is only six months.

In the United States, the grace period for patentability under 35 U.S.C. §102 is one year after public disclosure, offer for sale, or public use of the invention by the inventor or those who derived the information from the inventor. After this period, the above events are considered prior art that may invalidate the novelty of the invention.

In contrast, the grace period for novelty is much shorter in China. Pursuant to Article 24 of the Patent Law of the People’s Republic of China (Chinese Patent Law), an invention for which a patent is applied does not lose its novelty where, within six months before the date of filing, one of the following events occurred:[1]

1. where it was made public for the first time for the purpose of the public interest when a state of emergency or an extraordinary situation occurred in the country. 
2. where it was exhibited for the first time at an international exhibition sponsored or recognized by the Chinese government; 
3. where it was published for the first time at a prescribed academic or technological conference; 
4. where its contents are divulged by another person without the consent of the applicant. 

Furthermore, the grace period (or the prior art exception) in China has a much smaller scope than in the United States. As per (2) and (3) of Article 24 of the Chinese Patent Law, it only applies to publication of the invention at recognized exhibitions or at academic or technological meetings. It is also worth mentioning that there is no grace period for design applications in China, as it is made for invention or creation only.

2. Appointment of a Chinese patent agency is required.

Pursuant to Article 18 of the Chinese Patent Law, any Chinese entity or individual may entrust a legally established patent agency to file a patent application or handle other patent-related matters in China. However, “any foreigner, foreign enterprise or other foreign organization without a habitual residence or business office in China” shall entrust a legally established patent agency with the application or such matters.[2]

In other words, for domestic Chinese applicants, retaining a patent attorney or agent is optional, but for foreign entities, retaining a Chinese attorney or agent is mandatory. Furthermore, a licensed Chinese patent attorney who is not employed or affiliated to a “legally established patent agency” in China may not represent a foreign entity in front of the China National Intellectual Property Administration (CNIPA).

3. Value of Awarded Damages Have Significantly Increased in China.

The fourth amendment of the Patent Law was implemented in China in 2021; it seeks to increase penalties including punitive damages on patent infringement and improve administrative law enforcement. Since then, the value of damages awards in patent infringement cases has substantially increased.

For example, the average damages awarded by the Beijing IP Court, a specialized IP court in the capital city of China, has increased from $80,000 in 2018 to $450,000 in 2022.[3] Also, in the Shanghai IP Court, another pioneering IP court in the economic center of China, shows that 119 cases had damages claims of more than $1.4 million in 2022.[4] Panitch Schwarze collaborates with a number of leading patent law firms in China. We also have IP professionals in the United States who are native Mandarin speakers, including the author of this article. Having our firm act as your representative in providing instructions to Chinese patent agents bridges the legal and cultural gap between the U.S. and China.

[1] https://english.cnipa.gov.cn/col/col3068/index.html#:~:text=Any%20design%20for%20which%20a,Article%2024.

[2] Ibid.

[3] Beijing IP Court, ‘北京法院2022年知识产权司法保护工作情况’, 20 April 2023.

[4] Shanghai IP Court, 2022 Shanghai Court IP Trial White Paper, April 2023.