On 6 August 2024, the China National Intellectual Property Administration (CNIPA) issued an announcement detailing the adjustment of certain patent fee standards and reduction policies. This announcement follows the guidance provided in the Notice on Patent Term Compensation Annual Fee Standards and Related Matters (Fa Gai Jia Ge [2024] No. 1156), jointly issued by the Ministry of Finance (MOF) and the National Development and Reform Commission (NDRC).
Key Adjustments to Patent Fees
1. Patent Term Compensation Request Fee
The announcement introduces a fee of RMB200 per request for patent term compensation. If the compensation request is approved, the patent holder will be required to pay an annual fee of RMB8,000 for each year of compensation, with no prorated charges for partial years. This is a newly introduced fee structure applied to the invention patent term compensation system introduced during the fourth amendment of China’s Patent Law in 2020.
Article 42, Paragraph 2 of the Patent Law states: “If the granting of an invention patent occurs more than four years from the date of filing and more than three years from the date of requesting substantive examination, the administrative department for patent affairs under the State Council shall, at the request of the patentee, provide compensation for the term of the patent due to unreasonable delays in the granting process, excluding delays caused by the applicant.”
2. Reduction in Annual Fees During Open License Implementation
Patents under open license agreements are now eligible for a 15% reduction in annual fees. If other fee reduction policies apply, the patent holder may choose the most favorable option, but cannot combine multiple reductions. With the newly amended Implementing Regulations of the PRC Patent Law officially coming into effect on 20 January 2024, the patent open licensing system has been fully implemented across China. This reduction is obviously a significant benefit for patentees looking to encourage broader use of their patents.
3. Design Patents under the Hague Agreement
For international design applications entering China through the Hague Agreement, the first and second individual designation fees can now be reduced in accordance with earlier fee reduction notices, including Cai Shui [2016] No. 78 and Cai Shui [2018] No. 37. This provision aligns the treatment of international design applications with that of domestic applications, streamlining the process and potentially reducing costs for applicants using the Hague system.
4. Batch Recordation Changes
When making changes to the applicant’s (or patentee’s) name or title through a batch recordation process, and no transfer of rights is involved, only a single recordation change fee will be charged. This simplifies and reduces the costs associated with making administrative updates to multiple patents held by the same entity, a process that was previously more cumbersome and expensive.
5. PCT Applications Entering the National Phase
For PCT applications that have undergone international search by the CNIPA, the application fee and additional application fee are waived upon entering the Chinese national phase. Further, if a preliminary examination report has been issued by the CNIPA, the substantive examination fee is also waived. This is a noteworthy benefit for PCT applicants choosing China as their national phase destination, reducing the financial burden of entering the Chinese market.
6. Fees Collected on Behalf of WIPO and Other Entities
Fees collected by CNIPA on behalf of WIPO, other countries, or regions will follow the standards and reduction policies agreed upon between CNIPA and these entities, or as specified in relevant international treaties. This ensures that the fee collection process remains consistent and compliant with international agreements, although the specific impact depends on the terms of these agreements.
Comment
The adjustments announced by the CNIPA represent a thoughtful response to the evolving needs of patent holders and applicants, especially in the context of international applications and the implementation of open licenses. The introduction of a patent term compensation fee, while adding a new cost, provides clarity and structure for applicants seeking to extend their patent protection. The reduction in fees for open licenses and design patents under the Hague Agreement also reflect CNIPA’s commitment to fostering innovation and international collaboration.
From a professional standpoint, these changes necessitate a more strategic approach to patent management in China. Patent holders are suggested to carefully assess their portfolios to identify opportunities to leverage the new fee reductions, particularly for patents under open licenses or those entering the national phase via PCT. Further, the ability to select the most favorable fee reduction policy provides a degree of flexibility that can be advantageous in cost management.
Key Adjustments to Patent Fees
1. Patent Term Compensation Request Fee
The announcement introduces a fee of RMB200 per request for patent term compensation. If the compensation request is approved, the patent holder will be required to pay an annual fee of RMB8,000 for each year of compensation, with no prorated charges for partial years. This is a newly introduced fee structure applied to the invention patent term compensation system introduced during the fourth amendment of China’s Patent Law in 2020.
Article 42, Paragraph 2 of the Patent Law states: “If the granting of an invention patent occurs more than four years from the date of filing and more than three years from the date of requesting substantive examination, the administrative department for patent affairs under the State Council shall, at the request of the patentee, provide compensation for the term of the patent due to unreasonable delays in the granting process, excluding delays caused by the applicant.”
2. Reduction in Annual Fees During Open License Implementation
Patents under open license agreements are now eligible for a 15% reduction in annual fees. If other fee reduction policies apply, the patent holder may choose the most favorable option, but cannot combine multiple reductions. With the newly amended Implementing Regulations of the PRC Patent Law officially coming into effect on 20 January 2024, the patent open licensing system has been fully implemented across China. This reduction is obviously a significant benefit for patentees looking to encourage broader use of their patents.
3. Design Patents under the Hague Agreement
For international design applications entering China through the Hague Agreement, the first and second individual designation fees can now be reduced in accordance with earlier fee reduction notices, including Cai Shui [2016] No. 78 and Cai Shui [2018] No. 37. This provision aligns the treatment of international design applications with that of domestic applications, streamlining the process and potentially reducing costs for applicants using the Hague system.
4. Batch Recordation Changes
When making changes to the applicant’s (or patentee’s) name or title through a batch recordation process, and no transfer of rights is involved, only a single recordation change fee will be charged. This simplifies and reduces the costs associated with making administrative updates to multiple patents held by the same entity, a process that was previously more cumbersome and expensive.
5. PCT Applications Entering the National Phase
For PCT applications that have undergone international search by the CNIPA, the application fee and additional application fee are waived upon entering the Chinese national phase. Further, if a preliminary examination report has been issued by the CNIPA, the substantive examination fee is also waived. This is a noteworthy benefit for PCT applicants choosing China as their national phase destination, reducing the financial burden of entering the Chinese market.
6. Fees Collected on Behalf of WIPO and Other Entities
Fees collected by CNIPA on behalf of WIPO, other countries, or regions will follow the standards and reduction policies agreed upon between CNIPA and these entities, or as specified in relevant international treaties. This ensures that the fee collection process remains consistent and compliant with international agreements, although the specific impact depends on the terms of these agreements.
Comment
The adjustments announced by the CNIPA represent a thoughtful response to the evolving needs of patent holders and applicants, especially in the context of international applications and the implementation of open licenses. The introduction of a patent term compensation fee, while adding a new cost, provides clarity and structure for applicants seeking to extend their patent protection. The reduction in fees for open licenses and design patents under the Hague Agreement also reflect CNIPA’s commitment to fostering innovation and international collaboration.
From a professional standpoint, these changes necessitate a more strategic approach to patent management in China. Patent holders are suggested to carefully assess their portfolios to identify opportunities to leverage the new fee reductions, particularly for patents under open licenses or those entering the national phase via PCT. Further, the ability to select the most favorable fee reduction policy provides a degree of flexibility that can be advantageous in cost management.