DRAFT REPLY TO HONG KONG ABOUT PATENT LAW PROPOSALS

1. We are grateful to have had the opportunity to comment on the report of the Patents

Steering Committee (PSC) and apologize for the delay in sending you a substantive reply

to your letters of 25 and 27 May. We nevertheless trust that the following comments can

be reflected in changes to the draft paper which you have now prepared for consultation

with the Chinese authorities.

2. Clearly the proposed law changes are overshadowed by the transmutation of Hong

Kong into a Special Administrative Region of China in 1997. Whilst we recognise that the

Basic Law provides for a separate patent system to operate in Hong Kong, the system will

surely need to be compatible with that in operation in China. We would therefore welcome

any early reactions from China to the PSC proposals of which you are aware as these

could influence the presentation of the proposals in the consultation paper.

PROPOSED INDEPENDENT PATENT SYSTEM

3. The proposal that patents granted by the European Patent Office (EP patents) and by

the Chinese Patent Office may be registered to secure independent Hong Kong patents

seems sensible, but we are concerned about a number of points, the most important of

which is the effect of the proposal on small and medium size enterprises (SMEs).

4. If only EP patents may be registered, SMES will be denied the much cheaper route to a

Hong Kong patent which is currently available by registration of patents granted by the

UK Patent Office (UK patents). Whilst recognizing the desire of Hong Kong to distance

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