In November last year (2009), the Standards Administration of China (SAC) issued for public comment their “Proposed Regulations for the Administration of the Formulation and Revision of the Patent-Involving National Standards”. As previously outlined, the proposal drew considerable criticism due in large part to requirement that patents be made available either royalty free of for a nominal fee to be eligible for inclusion in Chinese national standards.

For instance, George Willingmyre, in relation to the original proposal by SAC, commentated:

“The SAC patent policy proposal is unbalanced against an intellectual property owner’s rights and will discourage participation from owners of intellectual property within and outside of China. Implementation of the SAC patent policy proposal as worded will place China in a position to have to accept and promote inferior technologies and/or more costly implementations for important standards”

The proposal has not been implemented.

However, in January this year, three months following the SAC proposal, the China National Institute of Standardization (CNIS) issued a draft set of “Disposal Rules for Inclusion of Patents in National Standards”.

The Disposal Rules are a key component of the SAC proposal, however they notably do not include the provision from Article 9 of the SAC proposal, requiring that for inclusion in a national standard:

“The patentee agrees to license, on a reasonable and non-discriminatory basis, any organization and person to implement the patent when implementing the national standard at a price significantly lower than the normal royalties.”

As with the proposed changes to the public procurement policy (discussed here), the response from commentators has been mixed in relation to these changes.

In official comments to the draft Disposal Rules, both the American National Standards Institute (ANSI) as well as the American Intellectual Property Law Association (AIPLA), similarly commended on the one hand, the positive step that the Draft Rules represent relative to the SAC proposal – such as the inclusion of a RAND licensing option – while on the other hand outlined a number of questions and concerns they had with the regulation.

“While acknowledging and applauding the progress made in bringing the CNIS Proposed Rules more in line with international norms, AIPLA notes that some provisions of the CNIS Proposed Rules should be clarified or improved further to bring them into such alignment.”

The major concerns seem to stem from an inherent vagueness within the draft, perhaps due in part to the backlash from the SAC proposal. For instance, Willingmyre highlighted several areas of the draft rules requiring “refinement” which can be found here.

To what degree CNIS will take on board and implement such feedback (due date for comments was March 1st) in unclear at this stage, and whether they can their work together with SAC to provide a harmonized direction for China’s national standards environment. Also to watch will be whether these changes signify continued progress for China, or are merely reactionary amendments seeking to placate western critics.