The Chairman referred members to the submission from HKITMP circulated to members earlier (LegCo Paper No. CB(1)504/96-97(01)). Members noted that HKITMP had the following views on the application for standard patents -

Verification - clause 15
To encourage the public to use the proposed patent system for Hong Kong, HKITMP considered that it should not be a requirement for copies of related documents to be verified at the filing of request to record stage. This could be compensated for at the grant stage by stricter requirements. The term "verified copy" whilst defined in clause 2 as meaning "in relation to a document, a copy verified in the prescribed manner" would presumably be defined in the rules if necessary.
Documents in support - clause 15
The application formalities in general should be kept to a minimum in respect of the types of documents required. In particular, the requirement to file a search report should be dropped as any interested party could readily obtain a copy from the designated patent office. The words "and prescribed documents supporting that statement" should also be removed from clause 15(2)(d) of the draft Bill (clause 15(2)(c) of the blue Bill) since they imposed an onerous burden on the applicant and were not a requirement in other patent offices. Moreover, to facilitate modification, the documents required to be filed in connection with a request to record and a request for registration and grant should be set out in the rules or regulations instead of in the Ordinance.
Date of publication of designated patent application - clause 16
It should be stated in the rules how to count the six-month period (clause 15(1)) where a designated patent application was the national phase of an international application under the Patent Co-operation Treaty (PCT).
Copy of priority documents and translation - clauses 15 and 23
It was unnecessary to file priority documents and provide translation.

Verification - clause 15

2. Mrs Selina CHOW shared HKITMPs concern about verification and enquired if the application formalities in general could be kept to a minimum to mitigate HKITMPs concern. Mr SIN Chung-kai however emphasised the need to be prudent. He opined that as the proposed Hong Kong patent system was a first-to-file system and patent rights arose from priority, there were merits of requiring verification of related documents at an early stage.

3. Representatives of the Administration pointed out that HKITMP also agreed that verification was necessary but only had different views on the timing. After discussing with the Administration, it had not pursued the matter further. The Administration maintained its view that as the designated patent application would be the basis for establishing novelty, it was important to ensure accuracy as early as possible. This was especially the case as the validity of a patent would arise from the date of initial application, not from the date of grant and a legal action could be taken in respect of an alleged infringement right from the date of initial application, hence the need for copies of related documents to be duly verified by the designated patent office even at the filing of request to record stage. At members request, the Administration would confirm whether verification was a common documentation requirement in other registries.

Admin

Documents in support - clause 15

4. In response to members questions in relation to HKITMPs comments on the requirements for documents, representatives of the Administration drew members attention to the fact that the reason for establishing a local registry was to provide convenience to the public in Hong Kong so that they would have ready access in Hong Kong to all documents related to a designated patent that was granted in Hong Kong without having to go to the originating patent office. In this regard, the central question regarding clause 15 should be what was reasonable to require and how full information should be made available locally to facilitate the future users of the proposed system to make commercial judgements as to whether they should invest in certain patented products. Moreover, in consideration of the significant rights a patent carried, the requirements for documents had already been kept to the minimum necessary to provide the best balance between the interests of applicants and users of the system.

5. As for HKITMPs comments on the requirement to file a search report, representatives of the Administration made the following clarifications -

There were indeed two kinds of search reports. There was the initial vetting search report which was always available with PCT applications for a standard patent or a short-term patent. Apart from this, a designated patent office would normally issue a search and examination report at a later stage in the application procedure for a standard patent following a period of examination. Under the PCT, the international preliminary examining authorities had authorised offices in Australia, Austria, China, Japan, the Russian Federation, Sweden, the United States and Europe to issue the initial vetting search reports. These offices worked on similar criteria and up to approved standards.
As mentioned in (a) above, if a patent application was made in relation to a PCT application, there would always be an initial vetting search report at the international phase. In such a case, it should not be a burden to require an applicant to file a search report pursuant to clause 15. The Administration had already decided that it would not be a requirement to file a search report if the search report was issued separately from the designated patent application as published. HKITMP was satisfied with this arrangement.

6. Dr HUANG Chen-ya opined that the relevant wordings in the Bill should be revised to differentiate between the above two types of search reports. In response, the Director of Intellectual Property (D of IP) explained that as the Bill was drafted in terms with which the profession was acquainted, professionals in the field should have no difficulty in understanding the requirements. To facilitate members deliberation on the Bill, he agreed to explain in writing the search reports referred to in this Bill in respect of standard patents and short-term patents.

Admin

7. Responding to HKITMPs proposal to delete the words "and prescribed documents supporting that statement" from clause 15(2)(c), D of IP and the Principal Assistant Secretary for Trade and Industry (PAS/T&I) clarified that the clause should be read in conjunction with clause 12 which specified that an applicant for the grant of a standard patent must be either the person named as applicant in the designated patent application or his successor in title, or in preference to that person the person who was entitled to the property in the invention in Hong Kong. Thus if the applicant in Hong Kong was the named applicant in a designated patent application no further information would be required in support. If however he was not that person then either a statement or a letter of consent signed jointly by the applicant in Hong Kong and the applicant in the designated patent office or supporting documents would be required.

8. At Mrs Selina CHOWs request, the Administration agreed to consider specifying in the principal Ordinance the circumstances under which an applicant would be required to submit prescribed documents supporting his right to apply for the grant of a patent.

Admin

9. As for HKITMPs comments that requirements for documents should be set out in the rules instead of in the Ordinance, representatives of the Administration pointed out that because of the nature of the Hong Kong system for the grant of standard patents, the provisions for major documents should be set out in the Ordinance for transparency purposes.

10. Given that legal responsibility would arise at the point of initial application and that HKITMP had no strong views on the timing of verification and the types of documents required, members considered clause 15 agreeable.

Date of publication of designated patent application - clause 16

11. In response to HKITMPs comments on clause 16, the Administration stated that the date of publication of the designated patent application from which the six-month period would run would be set out in the rules and confirmed in the guidelines. The blue Bill had been amended to reflect this.

Copy of priority documents and translation - clauses 15 and 23

12. The Deputy Secretary for Trade and Industry (DS/T&I) reported that the Administration, in addressing HKITMPs concern in this area, had amended the blue Bill to provide that the submission of copies of priority documents might be a prescribed requirement. The Administrations current thinking was not to prescribe the documents but that the matter would be considered further when it prepared the rules.

Restoration of rights - clause 29

13. Members agreed that pending the Administrations clarification of the views of the Law Society of Hong Kong (LS) on the restoration of rights, clause 29 would be considered at the next meeting.

Admin

Discussion on provisions as to applications for standard patents before grant (clauses 31 to 38)

14. Addressing members questions in relation to HKITMPs comments on maintenance of applications and renewal of granted patents (clauses 33 and 39), representatives of the Administration informed members that in recognition of the need to ensure that an application would not be kept pending if the designated patent application had been refused or withdrawn, the Administration considered the payment of maintenance fees necessary to impose discipline on applicants. However, the Administration had taken into consideration HKITMPs comments on the payment date and amended the Bill to the effect that the date for payment of maintenance fees and renewal fees would fall on the same day. The Administration had explained its views to HKITMP who made no further comments.

Discussion on provisions as to patents after grant (clauses 38 to 49)

Term of standard patent - clause 39

15. In reply to a members question, D of IP confirmed that the twenty-year term for standard patents in Hong Kong was in line with international practices.

Revocation/amendment in designated patent office - clauses 43 and 44

16. As regards the comments of LS and HKITMP that the patents granted in Hong Kong would depend on the designated patent offices, D of IP said that the Administration noted this but considered that this would have the advantage of providing a cheaper alternative route. Pending further clarification from the Administration on the said advantage, members agreed to discuss these two clauses at the next meeting.

Discussion on contracts as to patented products, etc (clauses 62 and 63)

Avoidance of contracts - clause 62

17. Members noted that LS, in its submission on the draft Bill, preferred to have clause 62 deleted. Representatives of the Administration stated that clause 62 modelled on section 44 of the UK Patents Act 1977 (Patents Act) to prevent a patent owner from abusing his monopoly by placing restrictions on the acquisition and use of products other than the patented products. The clause, though complex, was well-known in the profession. The Administration had sent the gazetted Bill to LS who made no further comments on clause 62.

18. Mr Ronald ARCULLI considered it necessary to clarify whether section 44 of the Patents Act was enacted against the background of anti-trust or competition laws in the UK. He opined that if this was the case, it might not be appropriate to incorporate section 44 in the local law as Hong Kong did not have such anti-trust policies or laws.

19. In response, representatives of the Administration emphasised that the fact that Hong Kong did not have any anti-trust laws should not obviate the need for a mechanism to prevent abuse of the patent monopoly. Clause 62 was aimed at invalidating contracts which purported to monopolise the exclusive right to supply or acquire anything strictly outside the patent. This provision was not directly related to anti-trust policies. At members request, the Administration undertook to find out whether the enactment of section 44 was complementary to any UK anti-trust laws. The Administration would also ask LS to clarify its latest views on clause 62.

Admin

20. Dr HUANG Chen-ya supported the spirit of clause 62 but queried if clause 62(1)(a) was contradictory to clause 62(6) as the former stated that a condition of a contract should be void if it prohibited the person supplied from acquiring except from the supplier anything other than the patented product, whereas the latter meant that a condition of a contract should not be void only because it prohibited any person from selling goods other than those supplied by a specific person. In response, the Administration undertook to seek legal advice on whether the two clauses were consistent with each other.

Admin

Discussion on effects of patent and patent application (clauses 73 to 79)

Goods in transhipment and goods in transit - clause 73

21. At the Chairmans invitation, representatives of the Administration elaborated its position as regards clause 73. They emphasised that although for trade policy reasons the Administration preferred to exclude patented goods in transit from patent protection by way of clause 73(2), the Administration was open-minded on the issue. Should members support the views of the Hong Kong Bar Association (the Bar), HKITMP and LS that patented products in transit and patented products in transhipment should be treated alike, the Administration would delete clause 73(2). It would then be left to the common law to decide on each case as was under the current position.

22. Mr CHAN Kam-lam was concerned that if patented products in transit were not excluded from patent protection, it would have implications on freight trade. Freighters were not expected to know whether the goods in freight would infringe any patent rights. Dr HUANG Chen-ya opined that the problem might be solved if the freighters could claim compensation from the infringers.

23. In response, representatives of the Administration said that if a freight was detained pending the courts decision on an alleged infringement, freighters might be unfairly affected. Whether they could claim compensation from the infringers would to a great extent hinge on the terms of the freight contract. Even if they could do so under the contract, the chance for compensation was remote as the infringers might be just shell companies or companies registered outside Hong Kong. Notwithstanding that the companies were registered in Hong Kong, they might still ill afford to compensate the freighters for their loss as the degree of damage might be very significant. Yet the risk of real damages to freighters was not very great because of two reasons. Firstly, in recognition of the proportion of possible damage, the courts would normally not allow detention of the whole shiploads of innocent goods for the sake of a small proportion of infringing goods. Secondly, because of the substantial costs and efforts involved in applying to the court for the arrest of a ship in transit and in claiming damages, patent owners would not resort to this kind of action lightly. At the Chairmans request, the Administration agreed to confirm at the next meeting if there were any local court cases regarding infringement of copyright or patent in respect of goods in transit.

Admin

24. Mr Ronald ARCULLI enquired whether a patent owner could take proceedings in Hong Kong in respect of goods in transit if the goods were destined for a country which had granted him patent rights. In response, DS/ T&I and D of IP confirmed that as patent rights did not confer international protection, Hong Kongs patent laws would not apply to patents which were not registered in Hong Kong.

25. The next meeting was scheduled for 17 February 1997 at 2:30 p.m. to start examination of Part XI of the Bill.

(Post-meeting note : on the advice of the Chairman, the next meeting was rescheduled for 24 February 1997 at 4:30 pm)

26. The meeting ended at 10:35 a.m.

Legislative Council Secretariat
20 February 1997

Last Updated on 16 December 1998

Bills Committee on Patents Bill

Minutes of meeting held on Thursday, 23 January 1997 at 8:30 am in Conference Room B of the Legislative Council Building

Discussion on application for standard patents (clauses 10 to 30)

Submission from The Hong Kong Institute of Trade Mark Practitioners (HKITMP)

Verification - clause 15

Documents in support - clause 15

Date of publication of designated patent application - clause 16

Copy of priority documents and translation - clauses 15 and 23

Restoration of rights - clause 29

Discussion on provisions as to applications for standard patents before grant (clauses 31 to 38)

Discussion on provisions as to patents after grant (clauses 38 to 49)

Term of standard patent - clause 39

Revocation/amendment in designated patent office - clauses 43 and 44

Discussion on contracts as to patented products, etc (clauses 62 and 63)

Avoidance of contracts - clause 62

Discussion on effects of patent and patent application (clauses 73 to 79)

Goods in transhipment and goods in transit - clause 73

Minutes of meeting
held on Thursday, 23 January 1997 at 8:30 am
in Conference Room B of the Legislative Council Building