The Chinese government approved a draft amendment to the Patent Law to strengthen the crackdown on infringement of intellectual property rights (IPRs) by substantially raising compensation for victims, and fines for violators, which experts said will help build a fairer business environment and encourage innovation. The draft will now be submitted to the Standing Committee of the National People’s Congress (NPC) to be voted into law. The move will protect the legal rights of patent holders and improve the mechanism for encouraging innovation, said a statement released after the meeting of the government, presided over by Premier Li Keqiang.

In the meantime, inventors and designers will receive a reasonable share of profits brought from patents acquired when serving employers. For example, the draft raises the range of fines for violators from a minimum of CNY100,000 to CNY5 million when the loss to patent holders, and the benefits gained by violators, cannot be determined. The current fines range from CNY10,000 to CNY1 million. In many cases of IPR infringement in China, the average compensation is usually around several hundred thousand yuan, and it was rare to see CNY1 million awarded in compensation, according to figures by the Supreme People’s Court (SPC).

This is the fourth amendment to China’s Patent Law since 1984, with the latest revision in 2008. The National Intellectual Property Administration started preparations for the amendment in 2014 and began to solicit public opinion at the end of 2015. In the first half of this year, the country received 751,000 patent applications, and 217,000 were approved, up by 6.5% compared with the same period last year. Meanwhile, the country moved up by two places to rank 25th in the International IP Index 2018, according to the U.S. Chamber of Commerce’s Global Innovation Policy Center. Since joining the WTO in 2001, China has amended the laws related to IPR, including those on patents in 2008, trademarks in 2013, and obstructing fair competition in 2017, to boost protection of such rights, the China Daily reports.