China: FAQs About Patent Procurement And Enforcement In China

Last Updated: 9 November 2016
Article by Bo Li

In China, there are three kinds of patent: invention, utility model and design. Only invention patents are subject to substantive examination.

The requirements for patentability requirements are as follows.

Patent eligibility

All patent applications must first pass the patent eligibility bar:

  • An invention patent application must be directed to a new product or process of a technical nature.
  • A utility model application must be limited to a product's shape or structure (or a combination thereof).
  • A design application must be directed to a new aesthetic industrial design of a product's shape or pattern (or a combination thereof), or a pattern or shape combined with a colour.

Protection for a process or unknown type of material should be sought under an invention patent rather than a utility model.

Practical utility

'Practical utility' means that the invention or utility model can be made or used and can produce beneficial effects.

Disclosure and enablement requirements

The disclosure and enablement requirements require that an invention or utility model be described in a manner that is sufficiently clear and complete so as to enable an ordinary person in the art to carry it out.

Novelty

The absolute novelty bar applies in China. This means that an invention or utility model must not be part of any prior art in China or abroad, and must not have been described in any patent application previously filed in China (or Patent Cooperation Treaty (PCT) application valid in China).

Inventiveness

'Inventiveness' implies that an invention or utility model must have prominent substantive features compared to the state of the art and must represent considerable progress. For a design patent, it must not be a prior design or conflict with any legal rights obtained by other parties before the filing date. Further, it must be significantly different from a prior design or a combination of prior design features.

Other requirements

For an invention or utility model, the claims must:

  • be supported by the description;
  • contain all essential technical features for solving the technical problem; and
  • be definite and concise.

What are the limits on patentability?

Some types of subject matter are legally excluded from patent protection, including:

  • inventions that are contrary to the laws of the state;
  • inventions that are contrary to social morality;
  • inventions that are detrimental to the public interest;
  • scientific discoveries;
  • rules and methods for mental activities;
  • computer programs;
  • methods for the diagnosis or treatment of diseases;
  • plant varieties and animal breeds;
  • substances obtained by means of nuclear transformation; and
  • designs for two-dimensional printing goods comprising pattern, colour or a combination thereof, and which serve mainly as indicators.

Further, subject matter that is not reproducible, is contrary to natural law, is created by unique natural conditions or relates to a surgical method that is not intended for treatment purposes will be filtered out for lack of practical utility.

Can inventions covering software be patented?

Software, programs, instructions, data, signals, logic and media carrying instructions are not patentable subject matter. Nevertheless, inventions that are implemented wholly or partially through software or software-related inventions can be patentable if they are intended to solve a technical problem, use technical means representing laws of nature rather than manmade rules and achieve technical effects – although hardware modifications or improvements are unnecessary. For example, inventions for use in controlling an industrial process or improving the performance or characteristics of a computer system are more likely to be allowed.

Attention should be paid to the product claim. The conventional method is to present a claim defining more than one functional component of the claimed product and, at the same time, provide a block diagram and detailed description showing the functions or actions of those components and indicate that each component may be implemented in hardware, software or a combination thereof. This approach may be unfavourable when it comes to litigation, because of the difficulty in identifying counterparts of the software components in the accused product.

Since last year, examiners have become more friendly to claims seeking to protect apparatus comprising a memory in which computer-executable instructions are stored and a processor configured to perform one or more actions upon the execution of the instructions. Such a form of claims used to be objected to by examiners on the ground that it is unclear or it lacks support from the description, but now it is a trend that examiners take an opener attitude towards such a form of drafting, and a decreased number of objections directed to the form of drafting has been observed.

Can inventions covering business methods be patented?

Inventions covering business methods are not legally excluded from patentable subject matter. Nonetheless, they must have a technical nature (ie, advancing the prior art in terms of the structure, performance or characteristics of a computer or network). The simple computerisation of business methods or a simple improvement to a method of doing business not patentable. Examiners tend to review this type of invention for inventiveness rather than patent eligibility.

Are there restrictions on any other kinds of invention?

No,

Does your jurisdiction have a grace period? If so, how does it work?

Yes. An invention is not anticipated by:

  • disclosure of the invention in the six months preceding the filing or priority date by anyone without the applicant's consent;
  • disclosure of the invention in the six months preceding the filing or priority date at an academic or technological meeting organised by a competent department of the Chinese State Council or a Chinese academic or technological association, provided that the applicant makes a declaration concerning publication and provides a certificate issued by the meeting within two months of filing the application; or
  • disclosure of the invention in the six months preceding the filing or priority date at an international exhibition recognised by China, provided that the applicant makes a declaration concerning the publication and provides a certificate issued by the exhibition within two months of filing the application.

What types of patent opposition proceedings are available in your jurisdiction?

No opposition procedure is available in China.

Are there any other ways to challenge a patent outside the courts?

A third party may submit evidence and observations to the Patent Examination Division for consideration before an application is granted or may initiate invalidation proceedings with the Patent Re-examination Board at any time after grant. The submission of third-party observations is an ex parte procedure and no response will be received from the Examination Division. In contrast, invalidation proceedings involve inter partes review of the granted patent.

How can a patent office decision be appealed in your jurisdiction?

If a patent applicant is rejected, the applicant can ask the Patent Re-examination Board to overrule the rejection decision. Further, as stated above, in order to challenge a patent, the petitioner must initiate invalidation proceedings with the board. If the applicant or petitioner is not satisfied with the board's decision, it can appeal to the IP Court in Beijing and then to the Beijing High Court to review the first-instance judgment. The second-instance decision is final, although a retrial before the Supreme Court is available.

How long should an applicant expect to wait before being granted a patent and what level of cost should it budget for?

On average, it takes 22 months from the start of the substantive examination for an invention patent application to be granted. Thus, the applicant may expect to obtain an invention patent approximately three years after filing if the request for substantive examination is filed in a timely manner. It may take approximately four months and three months from filing for grant of a utility model application and a design application, respectively.

In term of cost, if an invention patent application is around 5,000 words long in English, the total cost will be around $6,000 from filing to grant, including official and attorneys' fees. A utility model or design application will cost between $1,000 and $1,500.

What are the most effective ways for a patent owner to enforce its rights in your jurisdiction?

A court action is the most effective way for a patent owner to enforce its rights. By filing suit before the relevant court, the patent owner may obtain the remedies of preliminary injunction, permanent injunction and damages. Further, an administrative action is available, as the administrative authority for patent affairs may also handle a patent infringement dispute. The patent owner may obtain a permanent injunction through the administrative authority, but it cannot award damages. However, at the parties' request, it may mediate in regard to the compensation due.

What are the stages in the litigation process leading up to a full trial?

Once the patent owner has filed suit, the defendant has 15 days to respond or 30 days if it is a foreign party. The parties then may be given 30 days to file evidence and a court hearing follows. After the court hearing, the court issues its decision. The first-instance decision may be appealed to a higher court, and the second-instance decision is final.

What scope is there for forum shopping?

There are more than 80 intermediate people's courts and three IP courts with the power to handle patent infringement cases. Jurisdiction is typically determined by two factors:

  • the location of the defendant; and
  • the place where the infringing activity took place.

As a strategy, the plaintiff may select a court away from where the defendant is located to avoid any influence by the defendant.

How easy is it for defendants to delay proceedings and how can plaintiffs prevent them from doing so?

A defendant may delay proceedings for one to two months by filing a jurisdiction opposition petition. The plaintiff can do nothing to prevent this filing. The defendant may also request the court to stay the proceedings by filing an invalidation petition with the Patent Re-examination Board within the response term of a lawsuit. The court will generally stay the proceedings in cases involving a utility model or design patent. The plaintiff may provide evidence to the court to prove the validity of the patent at issue.

What level of expertise can a patent owner expect from the courts?

The courts in larger cities have more experience of patent cases. In Beijing, Shanghai and Guangzhou, patent-related cases are tried by IP courts. The judges in those courts usually have a high level of expertise.

Are cases decided by one judge, a panel of judges or a jury?

Patent cases are usually decided by a panel of three judges, although a panel of five judges may sit in important cases. There is no jury system in China.

What role do expert witnesses play in the proceedings?

An expert witness may provide an affidavit to the court as evidence of the parties. The expert must be present in court to undergo cross-examination in order for his or her evidence to be considered by the court, unless there are extenuating circumstances. In some cases the court may request the parties to call certain experts to explain the technology at issue.

Does your jurisdiction apply the doctrine of equivalents and if so, how?

China applies the doctrine of equivalents. If a feature is not the same as a feature in the patented invention, but is implemented in substantially the same way and realises substantially the same function and effect, without requiring creative labour from a person skilled in the art, the feature will be regarded as an equivalent feature.

Are preliminary injunctions available? If so, under what circumstances?

It is possible to obtain a preliminary injunction if:

  • it is highly likely that the act being conducted or to be conducted will infringe IP rights;
  • such act will likely cause irreparable harm to the petitioner's legitimate rights;
  • the petitioner has paid the necessary deposit; and
  • the grant of a provisional or preliminary injunction will not harm the public interest.

How are issues around infringement and validity treated in your jurisdiction?

Infringement issues are handled by the courts and validity issues are handled by the Patent Re-examination Board. A patent is presumed valid unless it is pronounced invalid by the board. The board's decision as to whether a patent is valid may be appealed to the Beijing IP Court, whose decision may in turn be appealed to the Beijing High Court. The decision of the Beijing High Court is final.

What are the typical remedies granted to a successful plaintiff?

In China, the court may grant a preliminary injunction, a permanent injunction and damages to the successful plaintiff.

How are damages awards calculated? Are punitive damages available?

A damages award may be calculated based on:

  • the profits lost by the patentee due to the infringement;
  • the illegal profits made by the infringer due to the infringement; or
  • multiples of the licence fee for the patent.

If the damages cannot be calculated easily, the court may award statutory damages of up to Rmb1 million ($147,000). At present, punitive damages are not available.

How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?

In most cases the courts will grant permanent injunctions to successful plaintiffs. The court will grant a permanent injunction if:

  • the plaintiff so requests;
  • the court finds that infringement has occurred; and
  • the grant of a permanent injunction will not affect the public interest.

How long does it take to obtain a decision at first instance and can this process be expedited?

It takes six to nine months to obtain a decision at first instance if the parties are all Chinese companies or individuals. It is not possible to expedite this process.

Under what circumstances will the losing party at first instance be granted the right to appeal? How long does an appeal typically take?

The losing party in a first-instance case is always entitled to appeal. An appeal typically takes three to six months.

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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