China: Are Your Chinese Patents At Risk?

Last Updated: 15 October 2004
Article by J. Benjamin Bai and Helen Cheng

Viagra, the anti-impotence drug made by Pfizer, generated about $1.7 billion in worldwide sales last year. Viagra’s active ingredient is a substance called sildenafil citrate. The use of sildenafil citrate in treating erectile dysfunction is patented by Pfizer around the world. The Chinese patent on Viagra was granted by the State Intellectual Property Office of China ("SIPO") on September 19, 2001. Immediately after the grant, a dozen Chinese pharmaceutical companies and individuals filed petitions to invalidate the Chinese Viagra patent. Some argued that the patent failed to provide a detailed description under Article 26 of the Chinese patent law. Others claim that the patent lacked novelty under Article 22 of the Chinese patent law. Recently, SIPO issued a decision to revoke the patent. While SIPO has not provided a formal opinion on the basis for the revocation of the Viagra patent in China, sources at SIPO said the patent had failed to provide enough information on exactly how sildenafil citrate was manufactured.

Apparently, Pfizer is not the only multinational company whose patents are under attack. GlaxoSmithKline ("Glaxo"), Europe’s largest drug maker, faced a similar legal challenge to its Chinese patents on the popular antidiabetic drug, Avandia. The Avandia drug entered the Chinese market in the second half of 2000, with sales doubling consistently over the following years. The Chinese diabetic drug market is estimated to be more than $7 billion per annum. A group of Chinese drug makers filed petitions to revoke Glaxo’s patent on rosiglitazone, one of three patented ingredients in Avandia. An oral hearing for the invalidity proceeding before SIPO was set for August 18, 2004. However, at the beginning of the oral hearing, Glaxo voluntarily abandoned its patent on rosiglitazone. It is reported that a group of Chinese drug companies currently are challenging Glaxo’s second patent on Avandia in an invalidation proceeding before the Chinese Patent Reexamination Board.

While the above challenges involved pharmaceutical patents, non-pharmaceutical patents owned by multinational companies in China are equally susceptible to attack. Perhaps, the above events are merely the tip of the iceberg in regard to patent challenges in China. This article explains the conduct of Chinese patent invalidation proceedings so that multinational companies can better understand the process and respond to them effectively.

Chinese Patent Reexamination Board

The Chinese Patent Reexamination Board ("PRB") has sole jurisdiction over patent validity issues, regardless of whether there is a parallel patent infringement proceeding.1 Invalidation cases typically are decided by a collegiate panel of three to five members, including one panel chair, one chief examiner, and one or three associate examiners. Most cases are handled by a panel of three, whereas a single member panel decides simple cases. When a case has domestic or international significance, raises a complex legal question, or involves potentially large economic loss, a five-member panel will examine and decide the case.

The PRB is required to adhere to the laws and to base its decision on the facts in the records. The principles adopted by the PRB in invalidation proceedings are prescribed in the Chinese Guidelines for Patent Examination.2 Several important principles are set forth as follows.

Non Bis in Idem. The same patent cannot be subject to multiple attacks on the same grounds and evidence. However, a second petition based on new grounds or evidence not previously considered can be accepted by the PRB.

Ex Officio Investigations. The PRB may conduct ex officio investigation of the case that it examines. Where necessary, the panel may use evidence of general knowledge, such as technical dictionaries, technical manuals, textbooks, etc., which is in the public domain in the relevant technical field.

Consolidation of Examination. If more than one petition for invalidation of a patent has been filed, the proceedings should be consolidated and handled together to the extent possible.

Opportunity to Be Heard. Before an adverse decision is rendered against an interested party3 in an invalidation proceeding, such party will be given an appropriate opportunity to present its arguments and comments on the facts and evidence of the case upon which the PRB bases its decision.

Public Hearing. Except in a confidential case as required by laws or regulation, all other oral hearings are held publicly, and the decision of the PRB is published and circulated publicly. However, voting by collegiate panel members is not open to the public.

Confidentiality. Before the decision of the PRB is made, no member of the panel can express or suggest its opinions to any party without permission. Ex parte communications or meetings with members of the panel are prohibited.

A collegiate panel is involved in all procedural and substantive aspects of an invalidation proceeding. Panel members review evidence submitted by interested parties, determine its credibility, and verify facts of the case. The members also conduct oral hearings, if requested. After oral hearings, the panel reaches its decision by majority vote.

Grounds for Invalidation

Under Article 45 of Chinese patent law, any entity or individual who considers the grant of a patent to be contrary to relevant provisions of the law may request the PRB to declare the patent invalid. There is no deadline for filing such a petition as long as it is filed after the patent is granted. The patentee can also file a petition to have its patent declared partially invalid in light of certain published prior art. Grounds for filing a petition for invalidation of a patent are set forth in Rule 64.2 of the Implementation Regulations of the Chinese Patent Law ("Implementation Regulations") as follows:

Unprotectable Subject Matter. The subject matter of a patent is not in conformity with the definition for invention, utility model, or design patent as prescribed by the Chinese patent law. Rule 2 of Implementation Regulations. The subject matter of a patent is contrary to the laws, social morality, or is detrimental to public interest. Article 5 of Chinese Patent Law. The subject matter of a patent is excluded under the Chinese patent law. Namely, scientific discoveries, rules and methods for mental activities, methods for diagnosis or treatment of diseases, animal and plant varieties, and substances obtained by means of nuclear transformation are not patentable subject matter. Article 25 of Chinese Patent Law.

Double Patenting. Patent rights have been previously granted to an identical patent. Article 9 of Chinese Patent Law and Rule 13.1 of Implementation Regulations.

Unpatentability. An invention or a utility model patent does not possess novelty, inventiveness, or practical applicability. Article 22 of Chinese Patent Law. A design patent is identical or similar to another design that, before the date of filing, has been publicly disclosed in publication in China or abroad, or has been publicly used in China, or is in conflict with any prior right of any other person. Article 23 of Chinese Patent Law.

Insufficient Disclosure. The description of an invention or utility model patent does not disclose the invention or the utility model in a manner sufficiently clear and complete so that a person skilled in the relevant field cannot carry it out. Article 26.3 of Chinese Patent Law.

Lack of Support. The claims of an invention or a utility model patent are not supported by the specification. Article 26.4 of Chinese Patent Law.

Indefiniteness. The claims do not define clearly and concisely the subject matter for which protection is sought in terms of technical features for an invention or a utility model patent. Rule 20.1 of Implementation Regulations.

Lack of Essential Technical Feature. The independent claim does not recite the essential technical features necessary to solve the technical problems addressed by an invention or utility model patent. Rule 21.2 of Implementation Regulations.

Amendment Going Beyond Original Scope of Disclosure. The amendment to the application for an invention or utility model patent goes beyond the scope of the disclosure in the original description and claims, and the amendment to the application for a design patent goes beyond the scope of the disclosure as shown in the original drawings or photographs. Article 33 of Chinese Patent Law.

A petition for invalidation that is not based on one of the above grounds will be rejected by the PRB. While it is possible to file an invalidation petition based upon any one of the grounds, it is a fairly common practice to file a petition on the basis that the patent at issue fails to comply with Article 22, 23, 26, and/or 33 of the Chinese patent law, i.e., lack of patentability, insufficient disclosure, and/or amendment going beyond the original scope of disclosure. The likelihood of a petition being accepted by the PRB based on such grounds is substantially higher than that based on other grounds.

According to the Chinese Guidelines for Patent Examination, the PRB may, sua sponte, consider invalidity grounds not raised by the petitioner if failure to consider them would prevent meaningful adjudication of the issues. In practice, the PRB rarely takes such a proactive role in an invalidation proceeding.

Overview of Proceeding

After an invalidation petition is filed, the petitioner has one month from the filing date of the petition to file a supplemental petition to include new grounds of invalidity or new evidence. After the PRB receives the petition, it conducts a formality examination. If there is a formality defect, the PRB will send out notice and ask the petitioner to correct such defect in a prescribed time limit. If the petitioner fails to respond within the time limit or does not correct the defect after two responses filed within the time limit, the petition is considered withdrawn.

After the formality requirements are met, the PRB will forward a copy of the petition to the patentee and invite the patentee to respond within one month. After the expiration of the one-month period, the PRB conducts a collegiate examination to determine if an invalidation proceeding should be declared. Such determination is based on the petition, as well as the response filed by the patentee, if any. If the invalidation proceeding is declared, the petitioner generally has an opportunity to file written comments on the patentee’s response. After all necessary documents are received by the PRB, it will set a date for an oral hearing.

The following are some of the important deadlines applicable in invalidation proceedings.

The official fee (US$363) for filing a petition for invalidation must be paid within one month from the date of filing the petition. If the official fee is not paid within the time limit, the petition is deemed withdrawn.

A new ground for invalidation and new evidence therefor must be submitted to the PRB within one month from the date of filing the petition. Otherwise, it will not be considered by the PRB.

New evidence to support specific facts alleged but not previously supported must be submitted to the PRB within one month from the date of filing the petition. Otherwise, it will not be considered by the PRB.

Generally, it takes about six months to two years from filing a petition to obtaining a decision from the PRB, depending upon the workload in the relevant art units within SIPO.

Claim Amendments

During invalidation proceedings, the patentee of an invention or utility model patent, i.e., the respondent, cannot amend the specification of the patent but has an opportunity to make voluntary amendments to the claims, subject to the following limitations:

  1. the subject matter of the original claims may not be changed;
  2. broadening amendments are not permitted;
  3. amendments cannot go beyond the original scope of disclosure; and
  4. disclosed but unclaimed technical features generally cannot be added to a claim.

Therefore, permissible amendments in invalidation proceedings for an invention or utility model patent are limited to (a) canceling one or more claims; (b) combining one or more claims; and (c) deletion of one or more members in a Markush group. If an independent claim is not amended, its dependent claims are not allowed to be combined. Moreover, amendment by combining claims is permissible only when such combination renders the scope of the new claims narrower. In other words, if a combination of two or more claims does not render the scope of the combined claims narrower, such amendments are not allowed.

Amendments in the above three forms can be made in a written response filed by the respondent in a prescribed response period (usually one month). After such period, the respondent can only make amendments by cancellation of claims and deletion of Markush members.

Before a decision is rendered, the respondent can cancel one or more claims or delete one or more members of a Markush group to preserve the validity of the patent in suit. In that case, the collegiate panel will give the petitioner an opportunity to provide additional comments and evidence with respect to the amended claims.

In contrast to an invention or utility model patent, the patentee of a design patent is not permitted to make any amendments to the patent.

Evidentiary Issues

An invalidation proceeding is initiated by the filing of an invalidation petition. The petition should include a detailed explanation of the invalidity grounds. Each ground should be supported by evidence submitted with the petition. Additional evidence may be submitted in a supplemental petition within one month of filing the original petition. Evidence submitted after the one-month period will not be considered in the invalidation proceeding.4 A collegiate panel may require an interested party to submit evidence, within a prescribed time limit, to support facts alleged in previous written submissions.

Permissible evidence includes documentary evidence, physical evidence, audiovisual evidence, oral testimony of a witness, statements of interested parties, conclusion of experts, and records of on-site investigations and examinations, etc. In practice, the PRB relies almost exclusively on documentary evidence in deciding invalidation cases. Oral evidence is rarely relied upon. Moreover, evidence obtained illegally is not admissible.

All evidence must be verified and authenticated by the collegiate panel before it can be relied upon in the validity determination. The panel determines the authenticity and reliability of evidence based on its source and content. The panel may reject evidence if the source or content raises a question of its authenticity or reliability. The panel may determine the veracity of facts and authenticity of evidence by conducting its own investigation or entrusting it to a local intellectual property bureau.

Generally, there are two kinds of evidence: direct evidence and circumstantial evidence. Direct evidence refers to that which may be used to prove the existence of a fact directly and independently. Circumstantial evidence refers to that which may not be used to prove the existence of a fact directly and independently. Instead, it may be used to prove the existence of a fact only when combined with other evidence. If circumstantial evidence is used, it must comply with the following rules:

  1. Circumstantial evidence must be authentic and reliable;
  2. Circumstantial evidence must not contradict each other;
  3. Circumstantial evidence must be complete; and
  4. Circumstantial evidence must logically and unambiguously lead to one and only one conclusion.

Evidence in a foreign language may be used in invalidation proceedings. A Chinese translation should be filed, but is no longer required to be filed, when the foreign language evidence is submitted. If the translation is not filed with the evidence, the PRB will notify the party and require that the translation be filed within a prescribed time limit. If the party fails to file the translation within such time limit, the foreign language evidence is disregarded.

If there is a dispute between the interested parties as to the content of foreign language evidence, each party is allowed to submit its own translation of the relevant portion or the entire document. If necessary, a neural third-party translation agent may be engaged by the parties or the panel to provide the Chinese translation, either in whole or in part. Such translation agent can be chosen by mutual agreement of the interested parties or by the panel if the interested parties cannot agree.

An interested party must make a prima facie showing of the claims asserted in an invalidation proceeding. Therefore, the interested party has the initial burden to provide adequate evidence to support the claims. Failure to meet its burden of proof results in dismissal of the claims. If a fact is in dispute, the party alleging the fact has the initial burden of proving the existence of the fact. Once the party provides adequate verifiable evidence to prove that the fact is likely to be ascertained, the burden shifts to the other interested party to come forward with evidence to prove the contrary. If the other interested party is unable to do so, the fact alleged by the first party is considered verified and is admitted into evidence. If the other interested party comes forward with evidence to rebut the fact, the burden of proof shifts back to the first party.

Oral Hearings

An interested party may request an oral hearing by submitting a written request to the PRB. The basis for granting an oral hearing is as follows:

  1. an interested party needs to confront its adversary and cross-examine the adversary’s evidence;
  2. an interested party needs to explain the facts of the case to the collegiate panel;
  3. an interested party needs to present demonstrative evidence; and
  4. there is a need for a witness to testify.

Generally, a request for an oral hearing that includes at least one of the above grounds is granted by the PRB as a matter of course. The PRB may, ex officio, set an oral hearing if it considers it appropriate.

As discussed above, oral hearings are open to the public, except the deliberation by the collegiate panel. Oral hearings are presided over by the panel chair. Before an oral hearing commences, the panel chair will ask both parties if they are willing to settle their disputes. If there is a reasonable chance that the parties can settle the disputes immediately, the oral hearing will be temporarily suspended. Otherwise, it goes forward.

An oral hearing has two parts: evidentiary hearing and substantive hearing. The evidentiary hearing precedes the substantive hearing. It primarily deals with evidentiary issues. Typically, the petitioner presents its case first and adduces evidence to support his invalidation grounds. Then the respondent cross-examines the petitioner’s evidence and adduces his own evidence and makes arguments. The petitioner can then cross-examine the respondent’s evidence, make counter-arguments, and adduce additional evidence, if necessary. If new evidence is presented for the first time by one interested party, the collegiate panel must determine the admissibility of the new evidence. If admitted, the other interested party is given a choice of either orally responding to the new evidence on the spot or filing a written response at a later time. During the evidentiary hearing, members of the collegiate panel may question the interested parties and witnesses and ask them to explain any evidence or fact at issue.

After the interested parties reach an agreement on the evidence and facts admissible in the proceeding, the substantive hearing commences during which each interested party presents its arguments. Members of the collegiate panel may ask questions but may not express their own view in favor of either party. At the end of oral arguments, each interested party is given an opportunity to make a closing statement. In making the closing statement, the interested party may ask the panel to maintain its original request or modify it. Afterwards, the oral hearing goes into recess, and the panel starts deliberation. After a decision is reached, the oral hearing resumes and the panel announces its decision orally. The panel may decide to declare the patent invalid in whole or in part or uphold its validity in its entirety.

Judicial Review

The decision of the PRB is subject to judicial review. Appeal of the PRB decision can be taken directly to the Beijing Intermediate People’s Court, which reviews the decision of the PRB de novo. To avail of judicial review, a dissatisfied party must institute a legal proceeding in the court within three months from the date of receiving the notification of the decision. Further appeal can be taken to the Beijing High People’s Court if it is filed within 15 days of receiving the written judgment from the intermediate court. While it is theoretically possible to petition the Chinese Supreme Court thereafter, the Supreme Court is unlikely to review a patent invalidation decision.

According to a judicial interpretation issued by the Chinese Supreme Court on May 21, 2002, the intellectual property tribunal within the first Intermediate People’s Court of Beijing has jurisdiction over lawsuits against the PRB. The party who brings such a legal proceeding against the PRB is the plaintiff, while the PRB is the defendant. According to the Chinese administrative procedure law, the PRB bears the burden of proof for the decision it has made and is therefore required to provide the evidence and documents upon which its decision was made. Moreover, the court will notify the prevailing party before the PRB so that the party can participate in the legal proceeding as a third party.5

The legal proceeding against the PRB is initiated by a bill of complaint. When the court receives the bill of complaint, it will, upon examination, accept the case or reject the complaint within seven days. Rejection of the complaint by the intermediate court is appealable to the higher court. Upon accepting the case, the court will send a copy of the bill of complaint to the PRB within five days of the date of acceptance. The PRB is required to file a bill of defense within 10 days of receiving the bill of complaint. Upon receiving the bill of defense from the PRB, the court will then send a copy of the bill of defense to the plaintiff within five days.

There is no jury in Chinese judicial proceedings. Cases are tried to a collegial panel of judges or a combination of judges and people’s jurors.6 A collegial panel consists of odd-numbered members of three or more. A typical court hearing includes the following events: commencement of the hearing, court presentation of the case,7 oral arguments, and conclusion of the hearing.

Generally speaking, the petitioner of the invalidation proceeding may not introduce new evidence in the judicial proceeding. However, the respondent of the invalidation proceeding can introduce new evidence under limited circumstances. Where the respondent’s patent is invalidated by the PRB and the respondent later discovers new evidence that, if considered, could result in overturning the invalidation of the patent, such new evidence can be introduced.

After hearing a case, the court will uphold the decision of the PRB if (a) the evidence relied upon is conclusive; (b) the application of the law and regulations is correct; and (c) the legal procedures are complied with. On the other hand, the court will reverse the decision of the PRB if it finds (a) inadequacy of essential evidence; (b) erroneous application of the law or regulations, or (c) violation of the legal procedures. In such cases, the decision of the PRB will be vacated or partially vacated. The court may also remand the case to the PRB for further proceedings. In remand, the PRB is not permitted to render a decision essentially identical to the original one based on the same facts and reasons.

According to unofficial statistics, the reversal rate of the PRB decision by the intermediate court is relatively low — about less than 20 percent. Therefore, winning before the PRB is more than half of the battle. However, losing before the PRB is not the end of the world either.

Concluding Remarks

As the awareness for intellectual property heightens in China, more Chinese companies and individuals are likely to resort to the rule of law to resolve patent disputes. With the recent success by Chinese domestic companies against multinational companies in patent invalidation proceedings, one can expect patent challenges to intensify against multinational companies. Notwithstanding the political rhetorics about China’s lack of IP protection, it has strengthened its patent system significantly in recent years. Therefore, multinational companies facing patent challenges in China should not operate under the mistaken assumption that foreign companies cannot win in Chinese courts and agencies. In fact, multinational companies have won before the PRB and in courts in patent invalidation proceedings. However, winning a legal battle in China requires more than the will to succeed. As the master of the art of war in ancient China, Sun Tzu, taught, "Know your enemy, know yourself, fight a hundred battles, win a hundred battles." But he also warned, "If you know yourself but not the enemy, for every victory gained you will also suffer a defeat." This century-old war strategy still applies today, albeit a different battle.


1. Like most European patent systems, Chinese courts do not adjudicate the validity of the patent in suit. A defendant in a patent infringement suit must raise any validity challenges in a separate invalidity proceeding before the PRB. However, the existence or threat of an infringement suit is not a pre-requisite for filing a patent invalidity petition.

2. The Chinese Guidelines for Patent Examination has recently been amended. Part IV of the Guidelines deals with invalidation proceedings. The amendments to Part IV went into effect as of July 1, 2004.

3. An interested party is a legal term used in China to refer to a litigant in a proceeding. In an invalidation proceeding, the petitioner(s) and respondent (i.e., the patentee) are the interested parties.

4. However, there is no rule barring the petitioner from filing another invalidation petition based on the new evidence in a subsequent invalidation proceeding.

5. A third party to such legal proceedings can submit written responses, attend court hearings, cross-examine evidence, and make oral arguments, etc. The third party can also appeal any adverse decision to the higher court.

6. A people’s juror is not a juror as is in the U.S. jury system. A people’s juror in China is equivalent to an associate judge.

7. The court presentation of the case includes at least four components: 1) interested party’s statements of the case; 2) witness testimony; 3) introduction of documentary evidence, physical evidence, and audiovisual evidence; and 4) introduction of expert report, if any.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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