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Peculiarities of Patenting in China

March 16, 2017

Keywords: intellectual property, exclusive rights, registration of subject-matters of intellectual property, patent, application for a patent, grant of a patent, invention, utility model, industrial design, examination of application for granting a patent, criteria for patentability, novelty, inventive level, industrial applicability, obtaining a patent in China, peculiarities of patenting in China

The foundations of the patent legislation of the Chinese mainland were laid as far back as at the end of the19th century, but the modern Chinese legislation on the registration and protection of the rights to the relevant results of the intellectual activity originates in 1984 with the adoption of the Patent Law of the PRC. In 1985, China joined the Paris Convention for the Protection of Industrial Property (adopted in 1883, which deals with the industrial property issues in the broadest sense, including patents, trademarks, industrial designs, utility models, service marks, etc.), in 1994 it joined the Patent Cooperation Treaty of 1970 (Eng. “Patent Cooperation Treaty,” “PCT”). In 2001, China joined the World Trade Organization, and, accordingly, became a member state to the TRIPS, the Agreement on Trade Related Aspects of Intellectual Property Rights.

China adopted three significant amendments to the patent law: first in 1992, then in 2000 and, finally, in 2009 to fulfill the obligations assumed under these international treaties, and also in connection with its rapid economic development, which requires the improvement of the legal system.

In the PRC, there are three traditional subject-matters of the patent law: inventions, utility models, and industrial designs.

The period of validity of the patent for an invention is 20 years, for a utility model and industrial design it is 10 years. In China, there is no possibility of extending the period of validity of the patent. The legal protection of each of these subject-matters may be terminated, if the right holder does not pay administrative fees or disclaims the patent.

The following can not be patented: scientific discoveries, rules and methods of the mental activity, methods of diagnosis or treatment of diseases, species of plant and animals, etc. The software itself can not be patented, but the program, together with the computer, or some other technique, which application solves a specific technical task jointly, can obtain the patent protection.

The invention in China complies with the criteria for patentability, and the legal protection shall be granted to it, if it is new, it has an inventive level and an industrial applicability.

According to the third amendment to the Patent Law, the invention is not new (and therefore can not be patented), if the information about it has been published or disclosed to the public in any country of the world on the date of priority.

The inventive level of the invention implies that it does not explicitly follow from the prior art for a specialist: the invention must possess outstanding essential peculiarities that show a visible progress concerning the prior art. In assessing the inventive level, the examination shall be guided by the following questions: 1. What is the nearest analogue? 2. What is the technical problem, which the applied invention should solve? 3. Is there a difference between the prior art/nearest analogue and the invention, and what are the distinctions? 4. Will these distinctions be obvious to a specialist in this field, who must solve this technical problem?

As to the practical applicability, it means that the invention can be manufactured or applied in such the way to achieve a certain practical result.

As China is a member to the Paris Convention, any person who has filed an application for an invention or utility model in any other member state, may, within a year from the date of filing, file an application in China with the establishment of a convention priority for the first application. The period for industrial designs is 6 months. Filing an application with a convention priority allows the inventor to avoid filing a similar application by another person in any other state, and also to avoid the situation when filing an application in one country can make this invention a part of the “prior art,” what eliminates automatically its “novelty” at filing an application in another country.

Foreign applicants who do not have an office in China can file an application for a patent only through the Chinese patent attorneys. Applications for patents in China have a rather complex structure. They must be drawn up in Chinese and include, among other things, the necessary drawings and figures, indications of the grounds for applying the priority (if any), as well as the description (the name, relevant branch of industry, prior art, purpose of invention, etc.)

Filing an application to the PCT is also available for the applicants. PCT, the Patent Cooperation Treaty, allows claiming the patent protection of an invention simultaneously in each of the majority of the countries by filing an “international” patent application. The international application shall be filed with one Receiving Office in one of the languages prescribed (i.e. not necessarily in Chinese). However, if the applicant has filed an international application for a patent under the PCT system, he must present its translation into Chinese within 30 months from the date of priority.

The applications for the grant of a patent shall be filed in writing or electronically to the Chinese Office (on intellectual property). The Office has individual offices at the provincial and local levels, but they do not deal with the examination and registration issues.

After filing an application, the formal examination shall begin. It shall be the final stage of the consideration of the applications for industrial designs and utility models. In the course of the formal examination, which is a relatively simple procedure, the examiner shall check whether the documents are properly drawn up and issued, and whether the fees are paid correctly.

Only the invention undergoes the process of a substantive examination (after a formal examination and only after the relevant request of the applicant). The applicant has three years from the date of filing the application in order to request a substantive examination. In the course of the examination the Office may require the applicant to make changes in any part of the application that does not comply with the Patent Law.

The Chinese Office shall publish the applicationfor a patent within 18 months from the date of filing, unless the applicant applies for an earlier publication or withdraws the application. Consequently, as soon as the application is published, it shall be an integral part of the “prior art.”

If the invention has successfully passed a substantive examination (and the utility model and industrial design, respectively, have passed a formal examination), the Office shall register, publish and issue the patent. If the Office issues a refusal of the registration, the applicant can file an application for a reexamination of the decision of the examination within three months. The application for a reexamination shall contain adequate arguments and shall have documents enclosed, which support such arguments. The applicant at this stage may also make changes in the application, but only in such part of it, with respect of which the Office has made a final refusal.

If, as a result of this reexamination, the decision remains unchanged, the applicant can initiate a court proceeding demanding to cancel the Office's decision and to grant a patent (but only concerning the inventions; the decision of the reexamination commission concerning utility models and industrial designs shall be final).

Any person can attack the validity of the patent at any time after it has been granted on the grounds that, in his opinion, the grant of a patent does not comply with the requirements of the legislation.

It should be noted that, currently, the attention to patents in China is growing significantly. The number of applications for the grant of a patent is increasing rapidly. However, despite this, most patent holders face a lot of problems, related, first of all, to the protection of their exclusive rights.

The infringement of the exclusive rights to a patent is the use of the patent without the permission of the patent holder, including: the manufacture of the patented products, the use of the patented methods, the offer for sale or the sale of the patented products, the import or export of the patented products or the products obtained directly using the patented methods of the manufacture, etc.

The China's patent law requires that before filing a lawsuit against the offender, the patent holder should first attempt to settle the dispute through a pretrial process, by laying a claim, and only if it fails to help, he should initiate an administrative or court procedure. Also, the criminal prosecution can be applied.

Some Chinese lawyers believe that it is better to start with an administrative procedure in order to establish the fact of the infringement of the exclusive rights: it is faster and allows collecting evidence before laying a claim to the court. However, it has serious shortcomings: the penalty imposed on the offender is usually low.

Due to this reason, and also because of the complexity of disputes in this area and the specificity of the patent law, the judicial procedure (a civil-law proceeding) is the most actively developing and promising.

Here it is worth mentioning that the issues of the infringement of the exclusive patent rights are closely related to the issues of validity of the patent. As a rule, the cognizance of the patent infringement case shall be suspended (at the defendant's request) until the decision is made on the case on the validity of the paten initiated by the defendant.

China today is the leader in the number of applications for the grant of patents and proceedings related to the infringement of the exclusive rights. There is a stereotype that the judicial system of China, in particular, at adjudicating the disputes on the patent rights, favors the national companies. Alternatively, the foreign companies, even the largest and most famous companies in the world are much less likely to success. However, this is an exaggeration; it particularly concerns the proceedings in great courts in the developed urban areas. Foreign appellants win cases there no less frequently than the Chinese companies. According to one of the studies of 2016, foreign companies though initiated about 10 percent of cases on the infringements of the exclusive rights, but won 70 percent of these cases.

In any case, it is evident that the opportunities and principles of the registration and protection of the rights to intellectual property in China continue to develop, approaching the world standards. Nevertheless, patenting in China remains a rather complex procedure, requiring careful studying by the applicants or, what is more preferable, a qualified assistance of specialists.

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Daria Labut

Daria Labut

Assistant to Patent Attorney