Patent Q&A sponsored by Wanhuida – Peksung

In general, among the three types of patents, patent for invention offers protection of the broadest subject matters, including products, processes and usages. Patent for utility model aims at protecting product with the shape, structure, or their combination. Accordingly, method, usage, ingredient and the like cannot be protected by utility model. Patent for design protects the appearance of product in the form of shape, pattern, or their combination, or the combination of the color with shape or pattern of product, which creates an aesthetic feeling.

The main difference of the three types of patents is that invention patents should be subjected to substantive examination while the design and utility model patents can be granted just through preliminary examination without prior art search. The protection term of invention patents is 20 years from the filing date, which is longer than 10 years as compared with utility model and design patents.

For innovations focusing on technology improvement, invention patent with strong protection shall always be considered at the first place. Regarding small improvement or a product with short market cycle, utility model can be a good choice for quick protection and enforceable right with lower cost.

For a product to which the design of appearance contributes highly to its commercial values, it is advisable to obtain a design patent(s). According to the local practice, design patents can be effective to stop infringement act both by administrative enforcement or civil litigation.

For strategical reasons or for some important innovations, it can be practicable to file both invention and utility model applications for the identical technical solution on the same filing day. The exception is that the dual-filing cannot be based on a family PCT international application. As the utility model patent is granted faster after preliminary examination, enforcing patent right becomes available. Subsequently, when the invention patent with the same technical solution is about to be granted after substantive examination, the utility model can be withdrawn to avoid double patenting. On the other hand, if the invention is not allowed, the utility model can still be effective. The applicant may take its time during prosecution of the invention application, to win relatively stable protection scope. In addition, keeping both utility model and invention patent may also be feasible provided that the scopes of the claim protection are not identical.

For filing a patent application in China , the applicant can choose different routes including the direct applications, the applications on the basis of prior application(s) by claiming priority via Paris Convention or through PCT national stage. Foreign applicants most frequently choose later two routes for their Chinese filings. By claiming priority, one or more priorities can be combined together in the subsequent Chinese application. Partial priority is also possible, that is, in addition to the subject matter in earlier application(s), the subsequent application may include some new technical solutions. PCT route is generally recommended for the innovations of products or processes covering more potential markets with deferred cost investment. One thing worthy of notice is that the PCT route is not accessible for filing a patent application in Taiwan.

The time limit for filing Chinese application via Paris Convention is within 12 months from the priority date for invention or utility model, while within 6 months for design. For China national phase of PCT application (only for Invention or Utility Model), it is within 30-month or 32-month taking the two-month grace period by paying additional fees from the priority date. All application documents filed with the State Intellectual Property Office (SIPO) must be in Chinese at the time of filing. Only in the situation of filing a PCT international application with the SIPO as Receiving Office, the language can be Chinese or English.

Foreign applicants need to entrust a local agency to file the patent applications. The documents necessary for the filing include

1. Description, Claims, Abstract, Drawings (if any, but at least one drawing is mandatory for utility model application);

2. Certified priority document (if priority right is claimed);

3. Assignment (if the applicant in China is different from that of the priority application); and

4. Power of Attorney

1. Drawings or Photographs (for three-dimensional product, six orthogonal views and perspective views (at least front view, rear view and perspective view, and enlarged views of specific parts, if any) are required);

2. Certified priority document (if priority right is claimed);

3. Assignment (if the applicant in China is different from that of the priority application); and

4. Power of Attorney

1. The PCT Publication number, or description, claims, abstract, drawings, if such documents have not been published by the International Bureau;

2. Amendments under Art.19, 34 and Art.28/41 of the PCT, if any (if such amendments shall be basis for examination in China); and

3. Power of Attorney

The State Intellectual Property Office (SIPO) sets up the Patent Office and the Patent Re-examination Board (PRB), being responsible for patent granting and re- examination/invalidation respectively.

Invention

Utility Model and Design

The annuity occurs at the time when the patent right is granted and the years after.

The following flow chat illustrates the re-examination procedure after the decision of rejection is issued.

The reexamination procedure usually takes 12-14 months from filing the request to receiving a Decision of Reexamination. Under the local statutes, if the applicant is not satisfied with the conclusion or comments in the Decision, he or it may institute legal proceedings in the Beijing IP Court within three months from the date of receipt of the Decision.

Q4: How to use the opportunities for making voluntary amendments and divisional applications?

The timing for voluntary amendments of invention applications by the applicant after filing date is limited. There are two opportunities, one is at the time of filing the request for substantive examination and the other is within three months from the date of receipt of the notice of Entering into substantive examination procedure. The applicant may make full use of the opportunities for improving the claim scope intended to be protected. It can be quite flexible for making amendments to the claims, e.g., submitting a new set of claims, adding new claims, broadening the scope of independent claims and so on. The basic principle need to obey is that such amendments would not result in any new matter and could be supported by the description. According to the local practice, after receiving an Office Action, the applicant may only make amendments subject to the examiner's consent or examiner's requirements, unless such amendments facilitate the prosecution of the application.

Filing divisional applications at the applicant's own initiative can also be used as a strategy for improving protection of the innovations. A set of claims in the divisional application may not be limited to the scope of original claims in the parent application, it can be derived from the contents recited in the description. In general, the timing for filing a divisional application shall be allowable while the parent application is pending, and the latest time shall be within 2 months from the date of receipt of the notification to grant the patent right. According to local practice, it is also allowable to file a divisional application within three months from the date that the applicant receives the Decision on Rejection issued on the parent application, regardless of whether the applicant requests for reexamination or not. A divisional application can even be filed during administrative litigation against the reexamination decision. It is worth noticing that the status of aforesaid parent application refers to the earliest one of the patent family. If the timing of the earliest patent application expires, there will be no opportunity to file any divisional application. However, filing a divisional application upon examiner's request is excluded from the above limitations.

Q5: Is there any way for accelerating granting procedure?

The Patent Prosecution Highway (hereinafter referred to as PPH) is a framework by the agreements reached between patent offices of different countries. Under such framework, the claims of an application which have already been determined to be patentable by the Office of a first country (hereinafter referred to as the "Office of First Filing" or OFF) is eligible to go through an accelerated examination procedure, when it is filed in the Office of a second country (hereinafter referred to as the "Office of Second Filing" or OSF), upon the applicant's request.

Judging from the basic framework, the PPH can be divided into the Conventional PPH (also known as Common PPH) and PCT-PPH. With respect to the Conventional PPH, the application (either via Paris Convention or PCT national phase) filed in the OSF may use the national work products from the OFF to accelerate examination. As for the PCT-PPH: when an applicant receives, from the International Search Authority or International Preliminary Examination Authority (ISA/IPEA), the positive Written Opinion of International Search Authority (WO/ISA) or the positive Written Opinion of International Preliminary Examination Authority (WO/IPEA) or International Preliminary Examination Report (IPER), indicating that at least one claim in the PCT application is patentable/allowable (from the aspect of novelty, inventive steps and industrial applicability), the applicant may request the OSF to accelerate examination during the corresponding national/regional phase. It should be noted that the ISA/IPEA which issues the WO/ISA, WO/IPEA and the IPER is limited to the OFF.

Until now, the SIPO has reached bilateral arrangements with 19 offices of other countries for the PPH: Japan, United States, Germany, Korea, Russia, Denmark, Finland, Mexico, Austria, Poland, Singapore, Canada, Portugal, Spain, Sweden, United Kingdom, Iceland, Israel and Hungary. In September 2013, the world's five largest Intellectual Property Offices (USPTO, EPO, JPO, KIPO and SIPO) jointly agreed to launch a comprehensive IP5 PPH pilot program called "IP5 PPH", to improve the acceleration of patent applications before the offices. IP5 PPH turns the bilateral agreements to one multilateral agreement, which provides for the sharing of the search and/or examination results among the five offices, which is convenient and resource saving.

Taking the advantages of PPH, it needs to keep in mind that the accelerating procedure upon request shall be proceeded upon approval by the SIPO after being subjected to formality check. In practice, the formality requirements are quite strict and the following can be useful for understanding the key points.

1. Before a PPH request may be filed with SIPO, the patent application must have been granted, or at least, must have received a positive search report or examination report from the OFF. And all claims in the SIPO application, as originally filed or as amended, must sufficiently correspond to one or more of those claims determined/indicated to be patentable/allowable in the OFF/ the WO/ISA, WO/IPEA or IPER of the corresponding application. The wording "sufficiently correspond" means, accounting for differences due to translations and claim format, the Chinese claims in the SIPO are of the same or similar scope as the claims in the OFF, or narrower in scope than the claims in the OFF.

2. The Chinese application with electronic filing must have been published and entered into substantive examination stage. It is usually suggested that after the application is published, the applicant should file a request for substantive examination and simultaneously PPH. The applicant can take the opportunity to make voluntary amendments so that "sufficiently correspond" of the two sets of claims (OFF and SIPO) can be satisfied. There are only two chances to file a request for PPH for one application and any minor defect may lead to the failure of the PPH request. Therefore, in order to make sure that a PPH request is processed smoothly, it is advisable for the applicant to be well prepared in advance.

3. Ever since 2012, our firm has helped our clients to request for PPH for 200-plus applications, with a passing rate of over 80%. The majority of applicants come from such IP developed countries like US, Japan, Korea and Germany. For each application with request for PPH, once SIPO issues the first Office Action, our agent will pay close attention to the examination procedure so that the application may be granted quickly and smoothly.

For the innovations from China R&D center or subsidiary (employer), one issue is the ownership, i.e., who has the right to apply for and own a patent. The Chinese Patent Law stipulates some provisions relating to employee's inventions. For innovations made in duty by employees, the right to apply for and own a patent belongs to the employer. For innovations made mainly by using physical and technical means of the employer, such a right in general belongs to the employer, but in this situation, the agreement on ownership between the employee and the employer shall prevail.

Another issue is the reward and remuneration for the above defined employee's inventions. In the recent years, the SIPO is making effort to enhance the protection of inventor's right., which is reflected in the two versions of "Draft of Regulations on Service Invention" published in 2012 and 2014, making the remuneration of employee's invention a hot topic and attracting a lot of comments and disputes. In addition, the Shanghai Higher People's Court issued the Guideline of Hearing Disputes regarding Reward and Remuneration for Inventor/ Designer of Service Invention in 2013, which also drew the public's attentions.

However, till the present, the above draft Regulations by the SIPO has not been approved yet. In the current practice, the reward and the remuneration of employee's invention is governed under the Implementing Regulations of the Patent Law. The basic principle is "agreement shall prevail". The employer can sign a contract with the employee or introduce a company policy for the reward and remuneration in advance. If there is no contract or company policy, the statutory compensation shall apply, in which the reward is no less than RMB 3000 or RMB 1000 (depending on the type of patent), and the amount of a yearly remuneration is 2% and 0.2% of the profits derived from the exploitation of the invention (depending on the type of patent) or 10% of licensing fee.

For the employer, it is recommended to sign a contract in advance or stipulate a company policy directing to issues of ownership as well as the remuneration in order to avoid the risk of future disputes. Beside the statutory compensation, there are no rules for the minimum amount of compensation in the situation of reaching agreement or stipulating company policy. The employer may consider the general situation of its industry and different factors to set up the remuneration policy. Important aspect lies in that the relevant terms in the agreement or company policy shall not be obviously unfair or unreasonable to the employee inventors.

The third issue is transfer of the technologies or patents of China R&D center or subsidiary to its relevant company aboard. In addition to the transferring contract between the two parties, it shall meet relevant Chinese laws, including the Foreign Trade Law and the Regulations of the People's Republic of China on Technology Import and Export Administration, and Chinese patent law.

For the innovations derived from China R&D Center or subsidiary, there are different routes to file patent applications, including: (i) filing a patent application in China first, and then claiming the priority and filing in other countries, (ii) filing a patent application directly in foreign countries, and (iii) filing a PCT application before the SIPO (as the Receiving Office). There is a provision in the Patent Law that the inventions, made in the territory of mainland China, shall be subjected to confidentiality examination, if they need to file aboard. Relevant information can be found in the following Q7.

Under the local patent practice, for innovations made in mainland China, if the applicant intends to file an application of such innovations with other Patent Offices (before or after filing a CN application), it or he shall file a request for confidentiality examination with the SIPO. In general principle, the aforesaid innovations refer to the substantive contents of the technical solution of an application for invention or utility model have been made within the territory of mainland China.

After the application passes the confidentiality examination, the applicant may file it with other Patent Offices outside China. In general, there are three ways of filing the request for confidentiality examination.

1) If one of the applicants is Chinese or has a habitual residence or business office in China, the applicant can file a PCT international patent application with the SIPO (as the Receiving Office). Under this circumstance, it shall be deemed to have filed a request for confidentiality examination with no need of a separate request.

The receipt of the Form PCT/ RO/105 means that the confidentiality examination has been gone through. It usually takes about 3-4 weeks.

2) If the applicant intends to file an application for patent directly with a Patent Office aboard, it or he shall file the request for confidentiality examination including detailed description of the technical solutions, with the SIPO in advance.

The foreign filing license can be obtained within one month, if the technical solution obviously does not need to be kept secret.

3) If the applicant files an application for patent with the SIPO first, it or he can file a request for confidentiality examination with the SIPO at any time before filing aboard.

If the applicant files the request for confidentiality examination at the time of filing the application, the foreign filing license can be obtained in 1-3 working days except that the technology needs to be kept secret.

For both (2) and (3), if a conclusion cannot be made based on a preliminary confidentiality examination, the examiner shall issue a Notification of Confidentiality Examination. After further examination, the examiner shall issue the Decision of Confidentiality Examination. If the applicant has not received the Notification of Confidentiality Examination within four months, or the Decision of Confidentiality Examination within six months, from the filing date of the request, the applicant can file a patent application in respect of the technical solutions abroad.

Attention must be paid that violation of confidentiality examination provisions shall result in no Chinese patent right, and even if it has been granted, it can be invalidated on such grounds.