China: Impact Of New Provisions

Stephen Yang of Peksung Intellectual Property assesses the advantages offered to applicants by new provisions relating to the utility model system.

Invention, utility model and design are the three types of patent rights available in China. Chinese Patent Law and the Implementing Regulations include interesting provisions related to protecting the same invention-creation using both the invention patent and utility model patent.

These provisions seem to have raised awareness of the Chinese utility model among applicants, especially foreign applicants in the past two years. According to statistics from the State Intellectual Property Office (SIPO), utility model applications filed by foreign applicants increased by 36% from 2009 to 2010 and 60.3% from 2010 to 2011, even though they still account for a very small percentage (0.7%) of all utility model applications filed. In comparison, invention applications from foreign applicants increased by 14.8% and 12.7% respectively.

A closer look into the Chinese utility model system reveals that they may offer applicants and patent owners strategic advantages in terms of acquiring and enforcing patent rights in China.

A utility model is a new technical solution relating to the shape, structure, or combination of the two, of a product, which is fit for practical use. In other words, utility model patents protect products, but not methods. A Chinese utility model is valid for 10 years from the filing date. There is no substantive examination for a utility model. Hence, a utility model patent is usually granted much quicker than an invention application. Under the current electronic examination system in SIPO, a utility model patent can be granted in as quickly as three months whereas an invention needs on average two and half years

The patent law and implementing regulations have new provisions which address the issue related to the situation where an applicant files a utility model application and an invention application for the same invention-creation on the same day. The utility model is usually granted first and when the invention application is ready to be allowed and the utility model is still valid at that time, the applicant may abandon the utility model and choose the invention patent. The utility model is then abandoned on the issue day of the invention patent.

In fact, these provisions are put in place as an exception to double patenting, as only one patent shall be granted for one invention-creation. These provisions clearly allow one utility model patent and one invention patent to be granted for the same invention-creation, as long as they are not in force at the same time.

According to the Guidelines for Examination, double patenting means claims in two or more patents having the same scope of protection, in that they protect the same technical solution. In other words, if an applicant gets a utility model patent and an invention patent for the same product, but with different scope, it can keep both as they will not be considered double patenting, even if the scope of their claims overlap.

In reality, if an applicant files a utility model application and an invention application, it is more than likely that it will obtain claims in utility model patents and invention patents with differing scopes, even if both applications have exactly the same set of claims at the time of filing. Usually, the claims of the invention application have been amended, often narrowed, during prosecution when the claims are ready to be allowed. In contrast, utility model applications are often granted with the same claims as filed as no substantive examination is conducted, assuming the utility model application complies with relevant provisions, such as formality, and patentable subject matter. In this case, the applicants do not need to abandon the utility model and could keep both the utility model and the invention.

However, if the claims of the invention application have to be narrowed in substantive examination probably in light of prior art references cited by the examiner, then the granted claims of the utility model patent may not have novelty or inventiveness as they are the same as the invention application at filing. In many cases, this is true, especially if the claims of the invention application are found to have no novelty, which means one piece of prior art reference discloses all the technical features of the claims. However, if the claims of the invention application are narrowed due to alleged lack of inventiveness by the examiner, often using a combination of prior art references, then the claims of the utility model patent may still be valid, due to differing requirements of inventiveness for the invention and utility models.

A Chinese utility model has a lower requirement of inventiveness than that for an invention patent. The patent law prescribes that the inventiveness of invention means as compared with prior art, the invention has prominent substantive features and represents notable progress. The inventiveness of the utility model means as compared with prior art, the utility model has substantive features and represents progress. As can be seen, inventiveness of invention or utility model includes two aspects: (prominent) substantive features and (notable) progress. To determine (prominent) substantive features is to determine whether an invention or a utility model is obvious in light of prior art. Notable progress basically means advantageous technical effects achieved by the invention or utility model. Clearly, the requirements for utility models are lower in both aspects. The same method of assessing (prominent) substantive features, the so-called problem-solution approach, is used for both invention and utility model. Specifically, the following steps are followed: determining the closest prior art, identifying distinguishing features and the technical problem actually solved by the invention or utility model and then determining whether or not there exists a technical motivation in the prior art so that one skilled in the art would apply the distinguishing features to the closest prior art to solve the technical problem.

The difference between the requirements of inventiveness for invention and utility model is embodied mainly by whether the existence of technical motivation in the prior art can be determined. The Guidelines for Examination prescribe that determining the existence of technical motivation for invention and utility model differs in the following two aspects.

  1. Field of prior art references

    For an invention, the examiner shall consider not only the technical field to which the invention belongs, but also the proximate or relevant technical fields, and those other technical fields that may give technical motivation. In contrast, for a utility model, the examiner usually focuses on the technical field to which the utility model belongs, unless there is a clear technical motivation in a proximate or relevant technical field, in which case such field may be considered.
  2. Number of prior art references

    For an invention application, no restriction is put on the number of prior art references that may be cited to assess its inventiveness. However, for a utility model, usually one or two prior art references may be cited to assess its inventiveness. Where a utility model is made by simply juxtaposing some prior art means, the examiner may cite more than two prior art references to assess its inventiveness, depending on the circumstances of the case.

A few examples are given here for better understanding of the inventiveness requirements of a utility model. In the invalidation decision (no WX11627) made by the Patent Re-examination Board (PRB) on May 19 2008, utility model patent no 200420028451.8 entitled Carpet for Martial Arts was declared valid. A third party tried to invalidate the utility model patent and provided three prior art references, US20030072911A1 which is directed to a residential carpet, Chinese utility model patent No 96229637.6 which is directed to a composite carpet and WO02094616A1 which is directed to sound absorptive protective mats used in automobiles. The PRB found none of them belonged to the same technical field of the utility model patent, as the required features of a carpet for martial arts are different from those of a carpet used in a residence or an automobile.

In a final ruling (no (2010)686) made by Beijing High Court on November 24 2010, the court overturned the decision of the first instance court, Beijing No1 Intermediate Court, which maintained the PRB's decision (no WX13590). A utility model patent no 200420003299.8 entitled Electronic Audio Book was declared invalid by PRB in this decision made on June 23 2009, on the grounds that the claims lacked inventiveness in light of the combination of US2003/0016210A1 which is directed to 3D interactive books, Chinese invention patent application CN1202671A which is directed to a radio index device, and three features which are deemed as common knowledge in the art. The PRB also found that the utility model patent could be invalidated in light of the combination of Chinese utility model patent no 02273039.7 which is directed to an electronic audio book, Chinese invention patent application CN1202671A and common knowledge in the art. The Beijing High Court ruled that the use of the first two references and three pieces of common knowledge by PRB violated the principle in the Guidelines for Examination and was too strict, also in the use of the latter two references plus common knowledge in the same decision.

As can be seen from these cases, in practice it may not be easy to invalidate a utility model on the grounds of inventiveness, due to its lower requirements. According to statistics from SIPO, up until August 31 2008, approximately 25% of invention patents were declared completely invalid compared with 33.3% of utility models – a less than significant difference. In fact, many utility models filed by Chinese applicants are not drafted by sophisticated professionals and often leave little room for the patentee to make amendments during invalidation proceedings. The statistics for the utility model could have been even better otherwise.

It follows that owners of Chinese utility model patents may be in a strategically advantageous position as the utility model patent may withstand attack on validity, with a broader scope than any invention patent owned by the same owner for the same product, due to the different standards of inventiveness for utility model and invention patents.

It is suggested that applicants seriously consider Chinese utility models, whether or not they could take advantage of the new provisions mentioned above. If these provisions apply to them, they could effectively extend the period during which an enforceable patent right is available. As the cost of prosecuting and maintaining a utility model is far less than that for an invention, filing two applications will not significantly increase the cost to the applicant. For a foreign applicant, since the texts of the applications are the same, translation cost will be the same as filing only one application.

It is very important for an applicant to note that in these new provisions the phrase "same day" refers to the same filing date. These provisions apply when both applications are the first filings. These provisions also apply when both applications are filed in China on the same day and claim priority through Paris convention from same previous foreign applications. If they are not filed on the same day or have different priority dates, under the current Chinese patent law, the earlier one constitutes a conflicting application against the novelty of the latter.

It is to be noted that one cannot take advantage of these provisions when it files a PCT international application and a Chinese utility model application on the same day, even if both are filed with SIPO, since the type of application cannot be determined at the time of filling the PCT application and it is not certain the PCT application will enter Chinese national phase. These provisions do not apply when an applicant files a Chinese utility model application and enters national phase of a PCT application on the same day, as they have different filing dates, one being the international filing date and the other Chinese filing date. In the worse case scenario, the applicant may end up with no patent, as most likely, the utility model will be granted which bars the PCT national phase application from being granted on the ground of double patenting and the PCT publication will destroy the novelty of the utility model in potential invalidation proceedings.

Despite the above limitations, applicants may still want to file Chinese utility model applications and an invention application through the PCT route, due to the lower requirements on inventiveness for a utility model, and the definition of double patenting. As mentioned above, in reality it is possible for applicants to keep both an invention patent and a utility model patent, with the latter having broader claims which may well be valid. If applicants choose to do so, it is crucial to ensure that both applications have the same priority date. Otherwise, one will constitute a conflicting application for the other and destroy its novelty. Applicants could file the PCT application and the Chinese utility model application with different sets of claims. Alternatively, they could be filed with same set of claims and as long as they end up with allowable claims having different scope, they both can be granted.

Originally published in

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