Patent marking in China and right to affix patent markings

By Sun Fangtao, Wang Xia, Yang Yingxiao and Li Xiaoli Examiners of Patent Examination Cooperation Center Beijing, Patent Offi,[Patent]

Article 15 of China’s Patent Law of 1984 provided that the patentee has the right to affix patent markings and the patent number on his patented products or the packaging thereof. The Patent Law as amended in 1992 and 2000 did not change this provision. The Patent Law as amended for the third time in 2008 changed the “patent marking and the patent number” to “patent marking” in order to align the legislative language with the “trademark marking” as set forth in Trademark Law. The 2008 Patent Law also codified Articles 15 and 17 in the predecessors into Article 17 and placed provisions of patent marking as the second paragraph of Article 17 in order to minimize changes of articles because of addition of provisions on joint rights of application and patents in the General Provisions.
 
The Implementing Regulations of the Patent Law of the People’s Republic of China (Implementing Regulations) as revised in 2001 provides that where any patentee affixes patent markings on patented products or packaging thereof, the patentee shall make the affixation in a manner as prescribed by the patent administration department under the State Council. In light of the above, the State Intellectual Property Office (SIPO) enacted and released in 2003 Provisions on the Method to Indicate Patent Marking and Patent Number. The Implementing Regulations as revised in 2010 made some revisions according to amendments of the Patent Law and added a provision that “where a patent marking is not in conformity with provisions of the preceding paragraph, the relevant department in charge of patent management shall order a correction” as the second paragraph of the article. In 2012, SIPO enacted Measures for Affixing Patent Markings which came into force on May 1st, 2012. Based on the practical situations of China, this Article will try to analyze and discuss patent marking and the right to affix patent marking in terms of definition and functions of patent marking, the question of patent marking as rights or obligations, products entitled to be affixed with patent marking, relationship between the right to affix patent marking and exploitation of patent licenses, relationship between patent-related products, patent marking and patent applications marking.
 
I. Definition of patent marking
Patent marking is a sign used to show features of a patent. Interpretation and Practical Guide of the Patent Law of the People’s Republic of China holds that “A patent marking is a sign to show a product is a patented product which is usually marked ‘PATENT’ or ‘CHINESE PATENT’ and the patent number.”
Article 5 of the Measures for Affixing Patent Markings provides that the following content shall be specified when a patent marking is affixed: (1) The type of patent rights, such as Chinese patent for invention, Chinese patent for utility model or Chinese patent for design, shall be specified in Chinese; and (2) The patent number for the patent right granted by the SIPO. In addition to the above, other words and graphic marks may be added, without, however, misleading effect to the public.
 
U.S. Patent Act § 287(a) states that patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by of fixing thereon the word “PATENT” or the abbreviation “Pat.,” together with the number of the patent, or when, from the character of the article, this cannot be done, by of fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. The Leahy-Smith America Invents Act which was passed in 2011, allows for virtual marking. Virtual marking requires that the patentee disclose an address of a posting on the Internet, accessible to the public without charge for accessing the address that associates the patented article with the number of the patent, to meet the requirement of patent marking, as long as the public may get access to the Internet address and find the detailed information of the patent.
 
II. Functions of patent marking
A patent marking serves the following two functions:
First, the patent marking may serve as a warning and notice. By affixing marking on patented products, packages or brochures and other materials thereof, the patentee can warn potential infringers that the products are patented and protected by patent laws, and no patent shall be exploited without authorization, so that potential competitors may refrain from any intent to knock off the products, which can be deemed as a right of the patentee. On the other hand, the general public may be aware that the products are patented and protected by patent laws, thus encouraging others to prevent designing and reducing possibilities of unintentional infringement, which can be deemed as an obligation of the patentee.
 
Second, the patent marking can play a role in publicity, enhance consumers’ reliance on the products, strengthen the products’ competitiveness and expand the products’ market share. The right to affix a patent marking encompasses business interests such as the advertising interests.
 
In China, it is generally acknowledged that products which have obtained invention patents must be novel products with relatively high technical contents, thus increasing consumers’ trust in the products and enhancing appeal to the consumers. For daily commodities which are technically mature and highly competitive in the market, whether a patent marking has been affixed or not may directly affect their pricing and sales volume. In terms of the role of publicity, affixing a patent marking is more of a right.
 
Because patent marking serves the above-mentioned functions, affixing patent markings may be deemed as a right or obligation of the patentee considering protection of the pubic interests or the patentee’s interests.
 
III.Affixing patent marking, a right or an obligation?
1. US legislation
U.S. Patent Act § 287(a) states that patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by affixing thereon the word “PATENT” or the abbreviation “Pat.” together with the patent number, or when, from the character of the article, this cannot be done, by affixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
 
From the above provisions it is seen that patent marking is the basic principle for the patentee to recover damages and to some extent may be understood to be an obligation for the patentee to recover damages, the obligation may be released upon receipt of the notice of infringement by the infringer (which can also be an exception to the aforesaid basic principle). Such infringement notice should be the actual notice from the patentee, in other words, even if the infringer is aware of the infringement but fails to receive the actual notice from the patentee, the infringer will not be deemed to have received the infringement notice. The actual notice should state clearly the infringing products claimed by the patentee, but not solely inform the infringer of the existence and ownership of the patent rights. The burden of proof is on the patentee. In the event of failure so to mark, damages may be recovered only for infringement occurring after such notice to the infringer.
 
2. Japanese legislation
Article 187 of the Japanese Patent Act provides that a patentee, exclusive licensee or non-exclusive licensee shall make efforts to place a mark as provided by Ordinance of the Ministry of Economy, Trade and Industry, on the patented product, product produced by the patented process (hereinafter referred to as a “patented product”), or package thereof, indicating that the product or process is patented.
 
At present, Japanese scholars agree with the view that the above provisions are arbitrary and patent marking is a right, not an obligation, on the part of the patentee, and the patent marking is not one of the fundamental elements in recovering damages.
 
3. Chinese legislation
The second paragraph of Article 17 of China’s Patent Law provides that a patentee shall have the right to indicate the patent marking on the patented products or packages thereof. The paragraph does not adopt the language of “a patentee may indicate the patent marking on the patented products or the package thereof,” nor the language of “a patentee shall indicate the patent marking on the patented products or the package thereof.” Given that, it can be seen that affixing a patent marking on the patented products, packages or brochures or other materials thereof is an exclusive right, not an obligation, of the patentee, which is different from U.S. Patent Act § 287(a) or Article 187 of the Japanese Patent Act. The Measures for Affixing Patent Marking, which was enacted by the SIPO in 2012 and came into force on May 1st, 2012, has termed the right as the right to affix patent markings.
 
Accordingly, in order to protect the right to affix patent markings, Article 84 (1) of the Implementing Regulations (2010) has listed “indicating the patent number of others on products or packages thereof without authorization” as one of acts of counterfeiting a patent of others as set forth in Article 63 of China’s Patent Law which provides that anyone who counterfeits a patent of others shall, in addition to bearing civil liabilities in accordance with the law, be ordered by the authorities in charge of patent-related administration to make a correction, and a circular shall be made accordingly. The relevant illegal gains shall be confiscated, and a fine of no more than four times the illegal gains may be imposed. If there are no illegal gains, a fine of no more than RMB 200,000 may be imposed. If the act constitutes a criminal offense, criminal liabilities shall be pursued in accordance with the law. Article 63 is the only article in China’s Patent Law that relates to civil, administrative and criminal penalties simultaneously.
 
In order to regulate exercise of the right to affix patent markings, Article 83 of the Implementing Regulations (2010) designates the patent administration department under the State Council to enact concrete methods on affixing patent markings and the relevant department in charge of patent administration is empowered to order a correction.
 
IV. Products entitled to be marked
Products on which patentees have right to affix patent markings should meet two prerequisites: 1. legal and non-infringing products; 2. use of effective Chinese patents that correspond to the patent marking affixed.
 
As regards the first prerequisite, although the products manufactured by the patent infringer are also “patented products,” they are infringing patented products. If the infringer affixes patent markings on the infringing products, packages or brochures thereof, then it will be deemed directly as willful infringement. Therefore, the infringer generally will not affix patent markings that corresponds to the “patented products” on the infringing products, packages and brochures thereof. If an infringer does do so, the authors hold the view that the act is illegal per se and constitutes counterfeiting, subject to the provision of “indicating the patent number of others on products or packages thereof without authorization” as laid down in Article 84 (1) of the Implementing Regulations (2010); as a result, the infringer has committed patent infringement and counterfeiting.
 
As regards the second prerequisite, if a product does not use a patented technology, or uses a patented technology but fails to use the patent corresponding to the patent markings so affixed, then such use has constituted counterfeiting of patents and may be subject to the provision of “indicating patent marking on products that have not been granted patent right or on packages thereof ” as set forth in Article 84 (1) of the Implementing Regulations (2010).
 
Judging from the above, in addition to the patentee and the patent licensee, persons who meet the aforesaid two prerequisites and are entitled to affix patent markings on patented products or packages thereof include those who apply patents, compulsory licensees and those not deemed as patent infringers as specified respectively in Article 14, Articles 48-51 and Article 69 in China’s Patent Law (2008). The authors think that the right to affix patent markings is an exclusive right, therefore, any person, excluding the patentee and those licensed to affix patent markings, who affixes patent markings without authorization will commit infringement upon the patentee’s right to affix patent markings.
 
V. Right to affix patent marking and patent exploitation license
The patentee and those licensed to affix patent markings certainly have the right to affix patent markings on patented products or packages thereof, but do licensees of compulsory patent exploitation have the same right? This is a controversial issue. Detailed Interpretations of the New Patent Law, a book which came out in August 2001, stated: “We opine that the licensee can also indicate corresponding patent marking and numbers on patented products or packages thereof they manufacture or sell, particularly under circumstances where it has been expressly laid down in the patent exploitation license contract.” The book failed to list reasons behind the above opinion and we have also failed to find convincible reasons in other authoritative works. Because patent marking has played different roles in the patent regimes of different countries, we have not found useful experience from other countries or regions. As a result, there has not been a definite answer as to whether the licensee certainly has the right to affix patent markings. Some articles hold that the patent exploitation license is different from patent transfer and thus the legal effect remains unchanged in terms of patent owners. Whether it is a sole, exclusive or non-exclusive license, it aims to exploit the patent as agreed. Therefore, the licensee is not naturally entitled to the right to affix patent markings. This article agrees with the above viewpoint.
 
There is no denying the fact that the right to affix patent markings can be agreed upon and it is necessary to expressly agree on the right. The patentee may expressly retain the right to affix patent markings in the patent exploitation license contract if the patentee wishes to retain the right with the view of either “letting water in to keep the fish” or obtaining advertising interests; the licensee may expressly state in the license contract that “the patentee agrees to grant the licensee the right to affix the patent markings and indicate the patent marking on the patented products, patents directly acquired through the patented methods or packages or brochures thereof ”, if the licensee wishes to obtain the right to affix patent markings with the view of warning potential infringers, increasing market share or yielding advertising interests.
 
If the patentee grants a license to others, the authors think that the patentee simultaneously grants the licensee to use its patented technology, because the prerequisite of affixing patent markings is “use of a corresponding patent to the patent marking so indicated.” If the patentee is only allowed to license others to affix the patent markings but not the corresponding patented technology, then the licensee only has the right to affix the patent markings but not the right to use the patent technology, the licensee may commit counterfeiting and the patentee shall bear the civil, administrative or criminal liabilities as a result of the counterfeiting. Based on the above, there is no possibility that the patentee only grants the right to affix patent markings but forbids use of the patented technology. If the patentee grants others the right to affix patent markings, it is usually deemed to have simultaneously granted the right to use the patented technology in an implied way.
 
VI. Patent-related products and the right to affix patent marking
Patent-related products mainly include products obtained directly from patented methods and components specially used to manufacture patented products. China’s Patent Law only provides that the patentee has the right to affix patent markings on its patented products or packages thereof, but is silent on products obtained directly from patented methods and components specially used to manufacture patented products.
 
1. Products obtained directly from patented methods and patent marking
The second paragraph of Article 84 of the Implementing Regulations (2010) provides that indication of patent marking on patented products, products obtained directly from the patented process or packages thereof in accordance with the law prior to the expiration of the patent right, and offering for sale or sales of the said products after the termination of the patent right shall not be an act of counterfeiting patents. Based on the above, it can be naturally seen that the patentee may affix patent markings on products obtained directly from the patented process or packages thereof; in other words, it is a right of the patentee to affix patent markings on products obtained directly from the patented process or packages thereof.
 
Article 4 of Measures for Affixing Patent Markings provides that during the validity period of the patent right after granting of the patent right, the patentee or the licensee agreed by the patentee to enjoy the right to affix patent markings may affix patent markings on patented products, products obtained directly from patented methods, packages of such products or materials such as manuals of such products. Because products obtained directly from patented methods may not be new products, Article 6 of the Measures for Affixing Patent Markings provides that if patent marking are labeled on products obtained directly from patented methods, packages of such products or materials such as manuals of such products, the fact that the products are obtained from patented methods shall be specified in Chinese. In so doing, the general public may be able to tell the difference between patented products and products obtained directly from patented methods by way of the patent marking.
 
The law does not expressly provide that the patentee shall have the exclusive right to affix patent markings on products obtained directly from patented methods or packages thereof. However, Article 84 (1) of the Implementing Regulations (2010) provides indicating the patent number of others on products or packages thereof without authorization is an act of counterfeiting a patent of others as set forth in Article 63 of China’s Patent Law. In other words, it is the patentee’s exclusive right to affix a patent marking. According to Article 5 of Measures for Affixing Patent Markings, the patent number for the patent right granted by the SIPO is an inseparable part of the patent mark. Based on the above, we conclude that it is an act of counterfeiting to affix a patent marking on products or packages thereof, or affix a patent marking on products obtained directly from patented methods or packages thereof without authorization from the patentee.
 
In summary, it is a right of the patentee to affix patent markings on products obtained directly from patented methods or packages thereof. The right may be licensed. It is an act of counterfeiting to affix patent markings on products obtained directly from patented methods or packages thereof in the absence of authorization of the patent number of the patent marking. Given that, it has become, in practice, an exclusive right of the patentee to affix patent markings on products obtained directly from patented methods or packages thereof.
 
In addition, Detailed Interpretations of New Patent Law holds, from the perspective of the purpose of legislation, that “judging from the legislative intent, the patentee of manufacturing methods also has the right to affix patent markings on products obtained directly from patented methods or packages thereof.”
2. Components specially used to manufacture patented products and patent marking
China’s Patent Law, Implementing Regulations and Measures for Affixing Patent Markings do not mention the issue of affixing patent markings on components specially used to manufacture patented products, or packages thereof. In the United States where affixing patent markings is an obligation, the Court of Appeals for the Federal Circuit held in its decision in Amsted Industries Inc. v. Buckeye Steel Castings Co . that a patentee selling a key component of its patented product may mark that component, such as “for use for the U.S. patent No. …” to satisfy the requirements under Section 287(a) of the U.S. Patent Act.
 
Based on the aforesaid case, we may be able to come to the following conclusion: the components used to manufacture patent products are closely related with patent marking, and affixing patent markings on components is equal to affixing patent markings on patented products. Because of the close relationship between the components and patented products or marks, the authors think the patentee may affix patent markings on components specially used to manufacture patented products and packages thereof in China where affixing patent markings is a right, but the patentee is required to add express specifications, such as “for use for the Chinese patent No. …” The affixing may be deemed as a description of facts. In addition, based on the previous section, it has become, in practice, an exclusive right for the patentee to affix patent markings on components specially used to manufacture patented products and packages thereof.
 
I. Marking of patent applications
Article 7 of Measures for Affixing Patent Markings provides that if products, packages of such products or materials such as manuals of such products are labeled before granting of the patent right, the type of Chinese patents applied for, the patent application number and the phrases “Patent Application Pending” shall be specified in Chinese. So far, the SIPO has, by means of normative documents, put an end to the debate among the academia and community of practice as to whether a patent application can be marked and how to mark. Article 11 of Advertising Law of the People’s Republic of China provides that “Where an advertisement involves a patented product or patented process, it shall clearly indicate the patent number and type. Where a patent right has not been obtained, an advertiser shall not give false information in an advertisement that the patent right has been obtained. It is prohibited to use a patent application for which the patent right has not been granted or to use a terminated, nullified or invalid patent in an advertisement.” Opinions differ as to whether it has been an advertising to affix patent applications or the number thereof on products, packages or manuals thereof. Based on reliance on the normative documents enacted by the patent administration under the State Council, if an applicant marks a patent in accordance with the Measures for Affixing Patent Markings, the marking should not be restricted and punishable. In addition, Article 7 does not distinguish between whether or not the patent application is made public, in other words, a patent application, disregarding whether it has been made public or not, can be marked.
 
II. Conclusion
The right to affix patent markings is a right with Chinese characteristics, the right holders may passively exercise such right, which will not result in loss of the right or inability to exercise such right; if the right holders actively exercise the right, they will be restricted and are obliged to mark in a way as set forth by the patent administration under the State Council.
 
(Translated by Wang Hongjun)
 

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