Patent Examination Standards in China

Doing Business in China: A Legal and Commercial Review October 03 2014 Thomas T. Moga

Threshold Question: Why Get Patents in China? n 

To keep others from using your IP

n 

To develop a portfolio for cross-licensing

n 

To stop counterfeiting –  Every product is at risk, particularly easilymanufactured articles with a high profit margin –  Advances in technology make copying easier and less expensive and make travel and trade easier and borders less relevant –  RESULT: increasing levels of piracy and counterfeiting world-wide

Patents in China n 

Three different types of patents available in China –  Invention Patent –  Utility Model Patent (not to be confused with “utility patent” in the US) –  Design Patent

Patents in China Chinese approach: Utility model first, then design, with invention patent last (compare with typical foreign approach in China: Invention patent first, then design, then utility model) n  Experienced

Chinese applicants know that utility model and design patents are typically easier to obtain in China than elsewhere and can be granted for a broader variety of inventions

Patents in China –  Foreign, particularly US, approach: Invention patent first, then design, then, bar behind, utility model n  Even

experienced US applicants aren’t aware of flexibility of design patents in China and are even less familiar with utility models; but some of those who know about them are reluctant to use them

Invention Patent Protection –  Invention Patent n  Substantive n  20

examination

years from earliest priority date

n  Can

take 2 – 3 years depending on art unit

n  Interviewing

cases to move things along and to improve product

Invention Patent Protection –  Invention Patent: mean new technical solutions proposed for a product, a process or the improvement thereof.” (Article 2)

n  “Inventions

Invention Patent Protection –  Invention Patent: n  Invention

as claimed must be “novel, creative and of practical use” (Article 22)

Invention Patent Protection –  Invention Patent Examination: n  Application

is substantively examined

n  Claim

amendments are limited in scope to text in the original disclosure

n  Examiner

interviews are possible

n  Translation n  Post-filing

problems

data submissions not possible

Utility Model Patent Protection

–  Utility Model Patent n  No n  10

substantive examination years from earliest priority date

n  Similar

to German “petty patent”

Utility Model Patent Protection

–  Utility Model Patent: models mean new technical solutions proposed for the shape and structure of a product, or the combination thereof, which are fit for practical use.” (Article 2)

n  “Utility

Utility Model Patent Protection

–  Utility Model Patent: n  Utility

Model as claimed must also be “novel, creative and of practical use” (Article 22)

Utility Model Patent Protection

–  Claim difference? n  Claims

should be of a different scope than those for invention patents (should be limited to “shape and structure of a product”) but frequently are not

Utility Model Patent Protection Current Examination Strategies n 

Not subjected to substantive examination (not enough examiners)

n 

Looking for something “abnormal”

n 

If examiner has independent knowledge or has results (e.g. from a PCT search) can undertake substantive examination based on rule changes

Utility Model Patent Protection Current Examination Strategies n 

As to novelty, every incoming UMP application is subjected to “Intelligent Patent Search System” – Claims only – Data base comprises Chinese patents only –  No plans to expand the data base as of now

Utility Model Patent Protection Current Examination Strategies n 

If the IPSS comes up with “similar documents” then the application is deemed of “inferior quality” and is subjected to examination;

n 

If a UMP is rejected based on this novelty search, then applicant can respond and amend application

Utility Model Patent Protection Current Examination Strategies n 

- Look at the claims to identify something exact or similar –  Close enough might work

n 

So this system will catch: –  Re-submitted photocopies of already-issued patents –  Applications from the chemical/pharm arts with a narrow band of nomenclature

Utility Model Patent Protection Current Examination Strategies n 

The system will miss: – Applications in the mechanical arts where the applicant can be “his own lexicographer” – Applications based on foreign-issued patents

n 

Examiner will need to make decision, so will still require human involvement

Utility Model vs. Invention n 

Why file UM? –  Easy way to get a patent –  Relatively low cost –  Relatively prompt issuance –  Unlike Design patent, scope of protection is defined by claims, like an Invention patent

Utility Model vs. Invention n 

Why not file UM? –  10 years vs. 20 years –  Invention patent stronger than UM (no substantive exam)

Utility Model vs. Invention n 

Why not file UM? –  Limited range of subject matter compared with Invention patent n  Inventiveness

for Invention patent: “prominent substantive features” which demonstrate “notable progress” –  Two or more references can be considered during substantive examination

Filing Strategies n 

File both Invention Patent and Utility Model patent applications simultaneously –  The Utility Model patent application will likely grant sooner, within 6 – 8 months –  Once the Utility Model patent is granted, the prosecution of the Invention patent may be allowed to continue –  However, Chinese Patent Law permits the grant of only one patent for a given invention

Filing Strategies n 

File both Invention Patent and Utility Model patent applications simultaneously –  Accordingly, following substantive examination of the Invention patent application but before the decision is made to grant the Invention patent, the Examiner will ask the applicant to make a choice – either abandon the granted Utility Model patent or abandon the pending Invention patent application

Design Patents n 

Design Patent Protection in China is:

–  Relatively inexpensive –  Relatively easy to obtain –  Relatively valuable

What Is A Design Patent In China? n 

Definition –  A "design" in the Patent Law refers to "any new design of the shape, the pattern or their combination, or the combination of the color with the shape or pattern of a product which creates an aesthetic feeling and is fit for industrial application." (Rule 2, Implementing Regulations of the Patent Law of the People's Republic of China)

What Is A Design Patent In China? n 

Sample Figures

Why Are Foreign Applicants So Far Behind? n 

Inside information? –  Experienced Chinese applicants file about ten times as many design patent applications in China compared with foreign applicants –  They know that design patent protection is typically easier to obtain in China than elsewhere (e.g., the U.S.) and can be granted for a broader variety of inventions

Differences Between Chinese and Foreign Prosecution n 

Ease of registration –  In China, "[a]ny design for which patent right may be granted must not be identical with and similar to any design which, before the date of filing, has been publicly disclosed in publications in this country or abroad or has been publicly used in this country…" (Article 23, the Patent Law of the People's Republic of China)

Differences Between Chinese and Foreign Prosecution n 

Ease of registration (continued) –  But – unlike the U.S. and most other countries, today there is no substantive search conducted during the examination and grant procedure –  Instead, the State Intellectual Property Office places reliance on post-grant invalidation to cure errors in the grant system

Differences Between Chinese and Foreign Prosecution n 

Ease of registration (continued) –  Thus China's system for granting design patents is closer in practice to the system of copyright registration in the U.S.

Differences Between Chinese and Foreign Prosecution n 

Greater variety of inventions covered –  Foreign applicants are constrained by their own experiences and, as a result, anticipate not only large prosecution bills but also limitations on what can be protected

Differences Between Chinese and Foreign Prosecution n 

Greater variety of inventions covered (continued) –  Thus, and continuing the example, design patent protection in the U.S. is limited to protecting a thing having an ornamental appearance (that is, the design elements must be ornamental and not functional)

Differences Between Chinese and Foreign Prosecution n 

Greater variety of inventions covered (continued) –  In China, the range of items that have received registrations is broader and includes design patents granted on vehicle exhaust systems, alternators, electrical components, and gear boxes n  These

"design inventions" would not be good candidates for patent protection in most other countries

Differences Between Chinese and Foreign Prosecution n 

OK, great, but are Chinese design patents valid? –  Invalidation rates for all patents granted and challenged in China are high –  But, according to statistics published by the State Intellectual Property Office, the percentage of design patents, invention patents, and utility model patents invalidated once challenged is comparable (between 50% and 55%)

Filing and Prosecution Strategies Practice before SIPO - 

Inadequate number of examiners – not likely to change any time soon -  Reason for absence of substantive examination

- 

Inconsistent messages to applicants during prosecution

- 

Office Actions frequently unclear, often due to translation problems

- 

Drawing requirement inconsistencies

Filing and Prosecution Strategies Managing Patent Prosecution - Select type of patent protection carefully - Don’t necessarily rely only on recommendation of Chinese counsel - Your portfolio may be suited to China only

Filing and Prosecution Strategies Managing Patent Prosecution (continued) - Challenge counsel – “you get the patent, you enforce the patent” - Remember cultural difference – less likely to challenge examiners - Stay involved - Engage counsel - Interviewing cases

Conclusion n 

Become familiar with the different patents in China

n 

Build a portfolio specific to available patent protection

n 

Work proactively to achieve targeted results

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THANK YOU E-Mail: [email protected] Phone: 001-202-230-1012

THANK YOU ! E-Mail: [email protected] Phone: 001-202-230-1012