Thought leadership from our experts

Coming Changes in Hong Kong Patent Law

Douglas Clark, Barrister, China

The Hong Kong Government has set a goal of transforming Hong Kong into a "world class knowledge based economy." As part of this, the Innovation and Technology Commission set up an Innovation and Technology Fund to assist local companies to introduce innovative ideas by subsidising patent applications; establishing a cash rebate scheme; and providing a business incubation programme.

The Hong Kong government also initiated a wholesale review of the patent system with the goal of ensuring that its "further evolution would facilitate the development of Hong Kong into a regional innovation and technology hub." Two years ago, the advisory committee issued its report. The Intellectual Property Department is currently working on a project to implement the recommendations of the report.

The committee made two key recommendations that will have a substantial impact on the way in which patents can be registered and enforced in Hong Kong.

First, in relation to standard patents, in addition to the current system of re-registration of Chinese, UK or European Patents designating the UK which will be retained, an 'original grant' system will be established in Hong Kong. Initially, it is planned that substantive examination of patent application will be outsourced to other patent offices, such as SIPO in China or patent offices in common law jurisdictions. However, over the long term it is expected that examination will be conducted in Hong Kong.

Once in place, patentees will have three routes for obtaining a patent in Hong Kong each of which has advantages and disadvantages. Hong Kong patent law is modeled on UK patent law which, in turn, is modeled on European patent law. Chinese patents are granted under the Chinese patent law meaning that different standards of patentability are applied. This can mean that claims that would be valid in Hong Kong are rejected in China. Because of this, it has generally been better to re-register European patents in Hong Kong. However, even here Hong Kong patent law has diverged in some respects from European patent law, such as in the patentability of second medical use claims. There may be times when direct filing in Hong Kong will give the most robust patent protection.

The new local examination system will, however, create new challenges for the Hong Kong legal system. Unlike the UK and China there is, however, no specialist Intellectual Property Court in Hong Kong. However, once local examination is introduced, parties will have a right to appeal examination decisions to the Court of First Instance in the High Court. This has potential to lead to great difficulties and inconsistencies in the review of decisions of the Patents Registry. No plans have been announced to establish a specialist bench to hear patent cases and appeals which is a matter of great concern.

The other key change is that amendments will be made to the short-term patent system. Short term patents were introduced as part of the enactment of the new Patents Ordinance in 1997. They are intended to be an economical alternative for obtaining patent protection in Hong Kong. Short term patents are not examined and provided formality requirements are satisfied are granted automatically. They are valid for four years and can be renewed for a further term of four years.

The recommendations of the committee were that the short-term patent system should be retained with the following refinements

(i) Substantive examination should be made a pre-requisite to commencement of infringement proceedings.

(ii) A short-term patentee, when making a threat of infringement proceedings, should furnish the person to whom the threat was made full particulars about the short-term patent in question in support of the threat. If they fail to do so the threat will be considered groundless which enabling a party aggrieved by the threat to seek injunctions and damages.

(iii) Patentees and any third parties having a legitimate concern or doubt about the validity of a short-term patent will have the right to apply to the Hong Kong Patents Registry for substantive examination of a short-term patent.

These changes have been proposed to address concerns that proprietors of short term patents were obtaining overly-broad protection and using this to possibly stifle competition. There have been a number of cases in relation to short term patents in the past years. In one, SNE Engineering Ltd v Hsing Chong Construction, the court, after ordering a speedy trial, held the patent invalid, for amongst other reasons, insufficiency. In another case, Bulova v San Ma Industrial Ltd the court granted interlocutory injunctions to prevent the patentee from making threats of infringement. The proposed rules would have assisted in both cases, by providing the court with the results of substantive examination of the patent and assisting the court to determine the validity.

It is hoped that the appropriate infrastructure will be in place by 2017 to allow the new procedures for examination of patents to be put in place and usher in a new era of patent protection in Hong Kong. As part of this development, the government and judiciary should be looking to ways in which the handling of patent (and other intellectual property) cases can be improved. The establishment of an IP list with a specialist judge is the minimum that should be done to assist in meeting the government's goal of creating a world class knowledge based economy.