The newly revised Implementing Rules of the Patent Law (hereinafter referred to as the New Implementing Rules) came into effect on January 20, 2024, and the Patent Examination Guidelines(2023) (hereinafter referred to as the New Guidelines) also entered into force on the same day accordingly. The revision of the New Implementation Rules and the New Guidelines involves the foreign filing license procedure that has gradually gained attention in recent years. This revision has adjusted the notification method for the initiation of a formal foreign filing review and its results to explicit notification while shortening the procedural period. Although the changes are insignificant, they will still impact on the applicant's application strategy and require attention.
Development of the Amendments
The foreign filing License is a mechanism established to prevent inventions involving national security or major interests from unduly disclosed and causing damage. It is a national security exception clause under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Most countries have formulated corresponding foreign filing license mechanisms for patent applications that may involve national security or fundamental national interests.
China's first Patent Law established the foreign filing license mechanism. In 2008, due to the deepening of China's R&D cooperation with other countries and the increasing prevalence of MNCs setting up R&D centers in China, the amended Patent Law authorized the State Council to stipulate the detailed procedures and time limits for foreign filing license procedure in order to cope with the diversified situations of foreign filings. Subsequently, the implementing rules of the Patent Law revised in 2010 made detailed provisions and excluded design patent applications from the scope of foreign filing review. Furthermore, the revised implementing rules officially listed the failure to request a foreign filing license as the grounds for rejection and invalidation.
Amendment I: Explicit Notification of Initiation and Conclusion of Foreign Filing Review instead of Implied Consent
The first major change in the foreign filing license section of the New Implementing Rules and New Guidelines lies in the notification method of initiating foreign filing review and its conclusion. Before this amendment, if the applicant did not receive the "Notice of Foreign Filing Review Opinion" within 4 months after submitting the request or did not receive the "Foreign Filing Review Decision" within 6 months after submitting the request, the applicant could proceed with filing foreign patent applications. After this amendment, no matter whether the examiner considers that the technical solution of the patent application obviously does not involve any national security issue or whether the examiner agrees with the foreign filing after a formal foreign filing review, CNIPA will issue a written notice to the applicant, clearly informing the applicant whether the patent application needs to undergo a formal foreign filing review or whether the patent application can be filed abroad. The change from implied consent to explicit notification makes the foreign filing license procedure consistent with the written notification obligation stipulated in Article 37 of the China Administrative Licensing Law. It provides the administrative counterpart with more certainty and predictability.
Amendment II: Shortening the Foreign Filing License Procedure
Before this amendment, CNIPA would not issue a written notice to the applicant whether or not the patent application required a formal foreign filing review regardless of whether the application would eventually be allowed to proceed to the foreign filing. Therefore, applicants who intended to file foreign patent applications generally had to wait 4 or 6 months after submitting the foreign filing licensing request before proceeding with the subsequent procedures. The New Implementing Rules and the New Guidelines have improved this process by setting the notification deadline for whether a further foreign filing review is needed and the deadline for the final decision to "2+2 months" and "4+2 months" respectively. Specifically:
- For all patent applications, regardless of whether they obviously do not need formal foreign filing review or otherwise, CNIPA will issue a corresponding notification within 2 months from the date of the secrecy review request, which could be extended to 4 months in complex cases.
- l For patent applications that enter the formal foreign filing review procedure, CNIPA will decide within 4 months from the request date thereof, which could be extended to 6 months in complex cases.
Given that the vast majority of patent applications in practice obviously do not involve any national security interest, the 2+2 deadline setting allows the vast majority of applicants to reduce the suspension period for foreign filing from 4 months to 2 months, effectively improving efficiency.
Potential Impact of Changes on Applicants
In recent years, the innovation output from R&D centers in China of MNCs has continued to improve, and the momentum of Chinese companies going global has not weakened. This has led to an increasing number of inventions completed in China that need to be filed abroad. This is the main reason for the increased exposure to foreign filing licensing clauses. Although the changes in the New Implementing Rules and New Guidelines are not significant, it is still necessary to pay attention.
For MNCs with active M&A activities, it is a complex systematic project to properly arrange the timing of patent application filing and/or publication of entities to be spun off or merged in, in compliance with the framework of the Chinese Patent Law and the patent laws of its home country, and to design a global patent strategy in line with the company's strategic arrangements. Overall, this amendment to the foreign filing licensing procedure increases the certainty of the procedural time expectation, shortens the procedural time, and updates the game rules for such cases, which deserves attention.
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