China: Continental Drift: SIPO's April 2017 Examination Guidelines Bring Significantly Improved Alignment With EU And US Rules In Software And Pharma Fields

Last Updated: 22 May 2018
Article by Toby Mak

The Chinese State Intellectual Property Office (SIPO) has significantly revised its examination guidelines with respect to inventions relating to business methods and software, submission of post-filing data for chemical/bio inventions, scope of post-grant amendments during invalidation proceedings, inspection of files before and after grant, and stay of SIPO proceedings due to court orders. Many of these changes are the result of efforts from the discussions with various foreign parties with SIPO.

Toby Mak discusses the details.

IPO has revised its patent examination guidelines (the "Guidelines"), and these became effective on 1 April 2017. The changes cover:

  • inventions relating to business methods;
  • inventions relating to software;
  • submission of post-filing data for chemical/bio inventions;
  • scope of post-grant amendments during invalidation proceedings;
  • inspection of files before and after grant; and
  • stay of SIPO proceedings due to court order

Many of these changes significantly change patent practice in China, and are discussed in detail below. My own personal comments are in square brackets.

Inventions relating to business methods (Section 4.2, Chapter 1, Part II)

After the revision, the Guidelines specifically include a statement: "If a claim related to business method includes business features and technical features, then the possibility of this claim being patentable should not be excluded according to article 25 of the Patent Law [Note: this is the article in the Chinese Patent Law relating to patentable subject-matter]" – in the examples of determining whether a claim is substantially directed to business or mental method.

[Comment: This section of the Guidelines highlighted the above statement, but only after the examples, and acted as an exception only when a claim was not substantially directed to business or mental method. A claim was considered to be substantially directed to business or mental method if its limiting contents are business or mental method other than the preamble, while only features novel from the prior art were considered as limiting features. That is, before the above change, even if a claim included a technical feature, like a computer- implemented step, a non-patentable subject-matter objection could be raised if this technical feature was considered by an examiner to be not novel.

It is believed that the above change is to extend this previous exception to all determinations of whether a claim is directed to business or mental method, i.e. as long as a claim has a technical feature, a non-patentable subject-matter objection should not be raised. This change may be much needed by the booming local software/Internet-related businesses in China. This change was a topic discussed with the AIPLA's China delegation in the last few years.]

Inventions relating to software (Chapter 9, Part II)

Software recorded on computer-readable medium is now patentable. [Comment: This completely changes the current practice. Computer-readable medium recording new and inventive software was not patentable in China.] The following changes are even more substantial:

  • Component(s) of an apparatus claim can include not only hardware but also software. [Comment: If applied broadly, this would allow claims in the format "An apparatus incorporating the method of claim 1". However, an examiner may interpret the amendment narrowly, requiring that an apparatus claim must recite a hardware component; this could be overcome easily, for example, by reciting a processor performing the software's method steps (therefore it is advisable to state that the method steps of a software invention could be performed by a processor or other components in the specification to provide basis of amendments). Either way, this change could prevent an examiner objecting to an apparatus claim reciting method steps on the basis that such steps could not limit the apparatus claim. Such objections were typical in China upto now.]
  • A module in an apparatus claim can be in the form of a software module, instead of functional module (as was required before the changes).

[Comment: This corresponds to the change of allowing an apparatus claim to include a software component. This further confers broader scope to an apparatus claim incorporating software, as it is no longer necessary to recite functional module, which could be interpreted as discrete physical module in the apparatus. Although the Guidelines before the revision already specified that a functional module was not an actual physical module but could be a virtual module realizing a step of a software, some Chinese courts adopted a strict literal interpretation of the language "a device configured to perform a step/function", and considered this to be ambiguous, and that the claim was not enforceable. Hopefully, this change could resolve these issues.

These changes would allow an invention relating to software to be patentable in the form of apparatus claims more easily with broader scope. Again, the above changes may be much needed by the booming software/Internet-related businesses in China. It is also interesting to note that these changes were one of the topics discussed with the AIPLA's China delegations in recent years.]

Submission of post-filing data for chemical/bio inventions (Section 3.5, Chapter 10, Part II)

Before the revision, the Guidelines specifically exclude submission and consideration of post-filing data to support sufficient disclosure of an invention.

After the revision, the Guidelines now require that supplemental experimental data submitted after the date of filing is examined, provided that the technical effect proved by such post-filing data shall be available to the person skilled in the art from the disclosure of the patent application.

[Comment: The strict bar of submission of post-filing data has troubled many applicants in the chemical, pharmaceutical, and biotechnology fields in China. SIPO has received requests from various foreign entities to lift this bar (for example, this was always one of the topics in meetings between SIPO and AIPLA delegations to China), and SIPO has finally provided a positive response. The following points should be noted.

The current wordings of the Guidelines require that in order for the post-filing data to be admissible, "the technical effect proved by such post-filing data shall be obtainable by a person skilled in the art from the disclosure of the patent application". It is not certain what would be considered as sufficient. For example, would a declaration from one of the inventors confirming that the post-filing data submitted is from experiments repeated according to those in the specification be enough? What if the technical effect proved by the post- filing data was not explicitly recited in the specification but, nonetheless, could be derived from the specification? If so, is it necessary for the technical effect be derived directly and unambiguously from the specification, as required to avoid added matter in China? In any event, I believe the current wording "the technical effect proved by such post- filing data shall be obtainable by a person skilled in the art from the disclosure of the patent application" is included to specifically prevent selection of a specific compound in a Markush claim while the original disclosure contains no recitation of any superior property of this specific compound over other compounds in the Markush claim. This was what happened in the invalidation of the Viagra patent in China. Specifically, the active compound sildenafil – 5-[2-ethoxy-5-(4-methylpiperazin-1-yl)sulfonylphenyl]-1-methyl-3-propyl-4H-pyrazolo[4,3-d]pyrimidin-7-one – was selected during prosecution due to a novelty objection, which led to a patent being granted in 2001. This Viagra Chinese patent was declared invalid in 2004 on the basis that there was no reason to choose this single compound from the other compounds due to lack of data in the specification supporting the selection, i.e. the specification did not describe or provide data showing the superiority of sildenafil. This led to SIPO requiring experimental data for each and every single compound in the claims for proper support from 2004 to the second instance of the invalidation of the Viagra Chinese patent in 2007, which reversed the invalidation and laid down the current test of sufficiency in China: "whether a person skilled in the art can reasonably expect the invention to work". It appears that SIPO has learnt the lesson, and tries not to allow such seemingly random selection by the current requirement: "the technical effect proved by such post-filing data shall be obtainable by a person skilled in the art from the disclosure of the patent application".

In order to mitigate this, while it is always preferred to include in the specification experimental data proving the superiority of a particular compound, if such data could not be made available at filing, it is advisable to include at least a brief description why any potentially useful compound is better than other compounds covered by a general chemical formula. However, it should be noted that such a description may not be helpful if the post-filing data is not consistent in supporting the specific superiority recited in the specification. For example, if a particular compound was described to have better stability towards acid compared to other compounds described in the specification and therefore could improve shelf life, but then the data shows that the compound in fact has better stability towards base, such an inconsistency could make a relevant post-filing data inadmissible.

Personally, I believe it would be easier to submit post-filing data for composition claims than compound/bio material claims: for compound/bio material claims, it would be easier for an examiner to reject the claim on the basis that a person skilled in the art could not expect the technical effect for a compound/ bio material with changes in structure, for data (and therefore effect) not contained in the specification, and particularly for pharmaceuticals (due to uncertainties on efficacy) and for bio materials (due to uncertainties on conformational structure), unless the prior art shows that compounds/bio materials of similar structure perform in a similar manner (which could then attract obviousness objections...).

The changes are directed to submission of post-filing data for sufficiency. It is not clear whether an examiner should consider post-filing data for supporting inventiveness of claim in a similar manner. Nevertheless, I have already tried this in a recent response to an office action, and let's wait and see the examiner's response.]

Scope of post-grant amendments during invalidation proceedings

Before the revision, only three types of amendments were allowed after the grant of a Chinese patent in invalidation proceedings. More specifically, in invalidation proceedings as the Patent Re-examination Board of SIPO (a Chinese court, more specifically the Beijing IP Court, at present only deals with appeals against the Board's decision):

  1. Deletion of an existing claim. [Comment: This is a welcome amendment.]
  2. Deletion of technical solutions from a claim, for example deletion of a compound from a 'Markush claim', which are typical for chemical or pharmaceutical inventions to cover various compounds by a general chemical formula. A 'Markush claim' covers many possible permutations, and each of these permutations is considered to be a technical solution covered by this claim. [Comment: Another welcome change.]
  3. Combination of existing claims according to their dependencies. For example, if claim 4 having two features (1) and (2) depends on claim 3, and claim 3 depends on claim 1, if claim 4 is to be incorporated into claim 1, then claim 4 has to be incorporated together with claim 3 to claim 1.

[Comment: As readers would agree, the above restrictions require that all possible permutations of any invention be included in the claims when drafting a patent specification, or at least be added before the application is granted. No patentee or patent attorney has a crystal ball knowing how the validity of a granted patent would be attacked. While it may be argued that a patentee should draft claims covering all technical characteristics of the invention disclosed in a patent specification, in many cases this could not be done due to various reasons, for example limited budget or lack of time (for example, due to excess claim fees).

The Chinese Supreme Court's decision stated that it is unfair to the patentee to reject forms of amendments not in accordance with those limited in the Guidelines if such amendments fulfill the requirements in the Chinese Patent Law (supported by the original disclosure and does not broaden the scope of protection). This decision further recites that while in usual cases the forms of amendments are limited to those recited in the Guidelines, other forms of amendments are not absolutely excluded.

By contrast, various leading patent offices – US, UK and EPO – allow amendments during invalidation proceedings to incorporate technical characteristic(s) into a granted claim as long as such incorporation is supported by the original disclosure, and does not broaden the scope of protection, contributing to technical advancements in these jurisdictions. SIPO has waited six years before changing the Guidelines in light of the 2011 Supreme Court's decision.]

After the revision, the Guidelines now allow incorporation of one or more features recited in the grant claims to a claim to narrow the scope of protection at an invalidation proceeding.

[Comment: That is, while the above forms of amendments (a) and (b) remain unchanged, form (c) has been opened up, a little bit. Specifically, taking the above example (claim 4 depends from claim 3, and claim 3 depends from claim 1), if claim 4 has two features (1) and (2):

  • Before the revision, as mentioned above, it was not allowable to incorporate only feature (2) into claim 1. Instead, the whole claim 4 having features (1) and (2) had to be incorporated to claim 1 along with claim 3.
  • After the revision, claim 1 can be amended by only incorporating feature (1) or (2) of claim 4 into claim 1 without incorporating claim 4.

While this is an improvement, the current revision still fails to address the issues stated in the 2011 Supreme Court's decision. That is, the current revised Guidelines still apply more restrictive limitations on post-grant amendments than the Chinese Patent Law. According to the explanation from SIPO, allowance of incorporation of feature only recited in the description but not in the claims was considered, but this form of amendment did not get through in light of concerns that a third party would not be able to foresee these new combinations, providing unbalanced advantage to the patentee.

SIPO may try to justify the refusal of allowance of incorporation of feature only recited in the description but not in the claims by article 5 of the 'Interpretation of the Supreme People's Court on several issues concerning the application of law in the trial of patent infringement dispute cases' effective since 1 January 2010 (the 2010 Interpretation), which stipulates that a Chinese court shall not support a claim for technical solution described only in the specification but not included in the granted claims in a patent infringement case. This is considered as an adoption of the donation principle in the US – Miller v Brass Company, 104 U.S. 350 (1881). However, there are several issues with this basis as the SIPO's explanation:

  • The above Chinese Supreme Court's decision is in 2011, which is later than the 2010 Interpretation.
  • The Interpretation 2010 is apparently directed to patent infringement cases, and it is not sure whether this could be applied to invalidation proceeding.
  • The US donation principle does not appear to be applicable to China. In Miller v Brass, there was a delay of 15 years to apply for re-issuance of the patent for the alternative scope originally not claimed. However, China does not have re-issuance of a granted patent as in the US allowing the patent to pursue alternative scope of patent protection.

However, this is not news to Chinese patent practitioners – for example, restrictions on addition of new claims when responding to an office action is another area of the Guidelines imposing restrictions not in the Law.]

Inspection of files before and after grant

Pending and published invention patent application before grant

Before the revision, for a pending and published invention patent application, office actions issued during substantive examination and their respective responses were not available to a third party. These are now available to a third party.

[Comment: I never figured out why the above documents were not available to the public. This change should be welcomed, which makes a lot of things easier, for example submission of third-party observations to a pending application, monitoring progress of an application to determine whether invalidation should be filed after the application is granted, and so on. I welcome this change. The following should be noted:

  • Only the response to an office action is available, but not the amended claims as filed. This is an established proceedure in China, again for reasons unknown to me, that the amended claims filed when responding to an office action are not available to the public. Nonetheless, the response could give hints on how the claims are amended, or in many cases clearly indicating how the claims were amended. This may be the reason why the amended claims are not available, but it should not take SIPO too much effort to make these amended claims available, either. SIPO may consider this as the next improvement.
  • SIPO has recently made available electronically filed applications for online inspection of files. However, applications filed before 2014 are not available, as electronic filings were not popular at that time, and most (if not all) of the filings were on paper. With the volume of applications received by SIPO, this is entirely understandable.
  • The priority document is not available. This will be discussed later.]

Already granted patents

Before the revision, while almost all documents before (e.g. office actions and their responses) and after (e.g. invalidation notifications or decisions) grant are available to the public, for an unknown reason the priority document of a granted patent was not available; now the priority document is available. [Comment: Although it is not clear why the priority document was not available to the public in the past, again this should be a welcomed change, which could make challenging the priority claim of a granted patent easier. On the other hand, it is unclear why the availability of priority document is not extended to pending and published invention patent applications.]

Stay of SIPO proceedings due to court order

Before the revision, the length of stay was limited to between six and 12 months depending on the court proceedings involved (12 months for ownership dispute, and six months for disputes involving property preservation). After the revision, the length of stay will be determined by the court, which is in turn bound by the Supreme Court's Explanation Applicable to Civil Litigation Law of 2015 to be not more than three years. [Comment: These changes are reasonable and to avoid conflict with the operation of a Chinese court.]

Conclusion

Most, if not all, of the revisions should be welcomed by Chinese patent practitioners. These revisions bring the Chinese practise closer to those of the US and Europe. Business method claims are now less likely to receive a non-patentable subject-matter objection. Software methods recorded on computer-readable medium, and apparatus claims reciting method steps are now allowable. Submission of post-filing data is no longer an absolute bar in China. The scope of post-grant amendments, and inspection of patent prosecution files, particularly those of pending and published invention patent applications, have been broadened.

However, it is intriguing, if not astonishing, to see that SIPO insisted that the incorporation of feature only recited in the description but not in the claims is not allowed despite a contradicting Supreme Court's decision in 2011.

Another interesting observation is that the efforts from the discussion of various foreign parties with SIPO could result in substantive changes, which is encouraging.

This article was published in the July-August 2017 issue of the UK Chartered Institute of Patent Attorneys (CIPA) Journal, and are re-posted here with the kind permission from the UK CIPA. The UK CIPA Journal covers updates, articles and case law reviews on IP in the UK, Europe, and around the world. The Journal is available for subscription at GBP130 per year, and for free by becoming a foreign member at GBP405 per year. For more information on the CIPA Journal please email editor@cipa.org.uk.

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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