On November 29, 2021, the Chinese National Intellectual Property Administration (CNIPA) announced a record fine of 1.04 million RMB (~$163 thousand USD) against a Sichuan entity for engaging in the patent agency business without authorization. Per CNIPA, “The amount of fines and forfeiture is the most for an unqualified patent agency violation case that has been investigated and punished.”

In May 2021, after receiving the evidence transferred by the CNIPA, the Sichuan Provincial Market Supervision Bureau verified the evidence and then filed a case for investigation. Upon investigation, it was determined that the party concerned was registered in 2018 and obtained a business license. From March 2019, it obtained patent clients by door-to-door promotion, website search and referrals and developed a patent agency business without authorization, and submitted applications through an affiliated entity or in the name of the applicant. During this period, it signed contracts with 78 clients and charged over 590,000 RMB. The Sichuan Provincial Intellectual Property Office, in accordance with the Regulations on Patent Agency, the Measures for the Administration of Patent Agency and other relevant provisions, after deducting the official expenses and taxes totaling 76,000 RMB, determined that the illegal proceeds amounted to over 520,000 RMB, and imposed a punishment of confiscating the illegal proceeds and imposing a fine of twice the illegal proceeds. 

Per CNIPA,

Unqualified patent agency behavior disrupts the order of the patent agency industry, affects the quality of patent applications, and damages the interests of innovative entities. This is the key rectification component of the “Blue Sky” special action. In recent years, the CNIPA has adopted a series of measures to severely crack down on unqualified patent agents. The first is to advance the revision of the “Patent Agency Regulations” and add special clauses for penalizing unqualified patent agency acts. The second is to use big data to continuously analyze and screen patent application information, sort out the information of suspected unqualified patent agencies, and organize relevant local verification and investigation. Third, the centralized publicity of administrative penalty decisions for unqualified patent agencies has been carried out twice, forming a powerful deterrent effect. The fourth is to formulate the “Patent Agency Supervision Work Regulations” to clarify issues such as the identification of illegal income, and strengthen guidance on the investigation and handling of unqualified patent agencies.

In the two years since the launch of the “Blue Sky” campaign, CNIPA has imposed fines and confiscations of more than 10 million RMB.

The full text of announcement is available here (Chinese only).