Hong Kong has a unique patent system due to its historic background. The Patents Ordinance (Cap. 514) along with other related rules (Caps. 514A – 514C) forming the main part of the city's patent laws, are basically derived from the UK common law system. After the transfer of sovereignty to China, Hong Kong has adopted some adjustments into its law system accordingly. In view of the economic and technological development plan of the city, amendment to the patent laws and the reform of the patent system is still in progress in Hong Kong.

Types of Patents in Hong Kong

The patent system of Hong Kong consists of two types of patent rights, namely standard patent and short-term patent respectively. These two types of patent are discussed comparatively below.

The patent system of Hong Kong itself does not provide substantive examinations on novelty and inventiveness of patent applications, and we can say Hong Kong patent system is based on re-registration. Standard patent registration can be done on the basis of a patent application from one of the three designated patent offices, i.e. the China Intellectual Property Administration (CNIPA), the European Patent Office (EPO) and the United Kingdom Intellectual Property Office (UKIPO). It means that a standard patent cannot be filed directly in Hong Kong without having a corresponding patent application in one of the designated patent offices.

For a short-term patent, it can be filed directly with the Patent Registry of the Hong Kong Intellectual Property Department (HKIPD). The priority filing date of a patent application in any Paris Convention country or WTO member country can be claimed in a short term patent. Generally speaking, short-term patent is suitable for a product with shorter commercial life cycle and it can be granted earlier compared with standard patent. The examination efficiency of short-term patents may be comparable to utility models in China and Germany, but short-term patents also cover non-structural inventions such as methods and processes while utility models do not.

Enforcement of Patent Rights

In Hong Kong, patent infringement is not a criminal offence. Like many parts of the world, most patent-related disputes in Hong Kong can be resolved by means of civil proceedings, arbitration or mediation. The Arbitration (Amendment) Ordinance, effective on 1 January 2018, confirms that IP disputes can be resolved by arbitration. Arbitration and mediation offer the parties involved with higher autonomy and flexibility in pursuit of their rights. In civil proceedings, the patent owner may file an action against the alleged infringer at the Court of First Instance of the High Court. The claims that can be made in a patent litigation by the patent owner include, without limitation, the following:

• an injunction restraining the defendant from the infringement act;
• an order requiring the defendant to deliver up or destroy any infringing product;
• damages in respect of the infringement;
• an account of the profits derived by the defendant from the infringement; and
• a declaration that the patent is valid and has been infringed by the defendant.

For patent, its owner being the plaintiff has the burden of proof that the patent itself is prima facie valid in any civil proceedings before the court. As one of the common strategies, the defendant may file an invalidation request against the patent in response to the allegations of patent infringement made by the patent owner.

There are a number of factors to be considered for a patent dispute. More analysis should be done to evaluate all possible outcomes and risks. Patent owners in Hong Kong are not keen to initiate legal proceedings for patent infringement because the time and costs involved are usually tremendous. Besides, there is no specific IP court or judge in Hong Kong. Outcomes of patent litigations would tend to be unpredictable. Nonetheless, Hong Kong is an international trading hub with low tax rate and less strict foreign exchange control. Besides, it is a highly populated city with a high GDP per capita. A number of international fairs and exhibitions are regularly hosted in Hong Kong every year, thereby bringing a lot of business opportunities. For these reasons, Hong Kong is still a considerable market for some enterprises, and civil proceedings are feasible for them as a means for enforcement of patent right.

Competition Ordinance and Patent Enforcement

Competition Commission states in its annual report 2018 that a total of 789 enforcement contacts were received between 1 April 2017 and 31 March 2018, and the accumulated enforcement contacts were 2894 since full commencement of the Competition Ordinance in December 2015 to March 2018. Anti-competition acts related to patent enforcement may violate the First Conduct Rule (agreements of associated parties) or the Second Conduct Rule (abuse of market power) of the Ordinance. These violating behaviours include cartel conduct and exclusive dealing in contravention with the First Conduct Rule, as well as tying and bundling, refusal to deal and predation in contravention with the Second Conduct Rule. Having said that, other factors should be considered in determination of anti-competition acts associated with patent enforcement, as the exclusive nature of patent rights is intrinsic and legitimate under typical enforcement. It seems that the balance between patent rights and market benefits is to be determined case by case, and a full comprehension of each case context is needed. In most cases, the Ordinance should have no implication on patent enforcement unless substantial adverse effect on market competition occurs in Hong Kong.

Download Sept 2019 - Patent Rights in HK and their enforcement.pdf