On Chinese Patent

July 13, 2005
Harakenzo World Patent & Trademark
Trademark/Design Dept.    Jin Man Tang

On March 12, 1984, the first "Patent Law" in Chinese history was distributed. It was the birth of the Chinese patent system. With the first amendment of the Patent Law and its implementing regulations in 1992, and the second amendment of the Patent Law and its implementing regulations in 2000, the Chinese patent system has been further improved. Of course, the current Patent Law has a lot of problems. As such, the third amendment of the Patent Law is now considered.

1. Basis of the Chinese patent system
(1) "The Paris Convention", "the Patent Corporation Treaty" and etc. which are international treaties of patents in which China participates.

(2) "The Patent Law" which is a law established by the National People’s Congress and its Standing Committee.

(3) "Implementing Regulations of the Patent Law", "Regulations on the Custom Protection of Intellectual Rights" and etc. which are administrative regulations established by the State Council.

(4) "The Guidelines for Patent Examination", "Rules on Compulsory License for Exploitation of Patent" and etc. which are department regulations established by the State Intellectual Property Office.

(5) "Several Provisions of the Supreme People’s Court for the Application of Law to Stopping Infringement of Patent Right before Instituting Legal Proceedings", "Several Provisions of the Supreme People’s Court for the Application of Law to Pre-trial Cessation of Infringement of Patent Right" and etc. which are legal interpretations established by the Supreme People’s Court.

2. Concept of patent right
A patent right is an exclusive right for exploiting an invention, a utility model, or a design, possessed by a natural person, a legal entity, or other organization, for a predetermined period, based on the Patent Law.
There are three kinds of Chinese patent rights: a patent right for an invention (corresponding to a Japanese patent right); a patent right for a utility model (corresponding to a Japanese utility model); and a patent right for a design (corresponding to a Japanese design).

3. Requirement for granting patent right
(1) Requirement for granting patent right for invention or utility model
(i) Novelty
(ii) Inventive step
(iii) Utility

(2) Requirement for granting patent right for design
(i) Novelty
(ii) Utility
4. Appliance of provision of the Patent Law concerning exception in lack of novelty (section 26 of the Patent Law)
(1) Reasons for appliance
(i) A case where an invention is first displayed in an international exhibition hosted or allowed by the Chinese government
(ii) A case where an invention is first announced in a formulary academic conference or technical conference
(iii) A case where someone leaks contents of an invention without approval of the applicant

(2) Due date of application: an application should be filed within 6 months from the date when the reasons for appliance is generated.

5. Reasons for not granting patent right
(1) An Invention or creation which is against the laws of People’s Republic of China or social morals, or which harms public interests. For example, an institute or tool for gambling.

(2) Scientific finding. For example, the finding of the law of universal gravitation by Newton.

(3) A Rule or method for intellectual activity. For example, traffic rules or a computer program.

(4) A Method for diagnosing or curing illness. For example, a method for feeling pulse.

(5) A Breed of animals or plants (note that the method for producing the breed can be granted a patent right).

(6) A matter acquired through conversion of atomic nuclear.

6. Person who may apply for patent
(1) Inventor or deviser

(2) Unit to which an inventor or deviser belongs

(3) Assignee
(i) Organization or individual that acquires an application right through an assignment agreement
(ii) Organization or individual that acquires an application right through inheritance

(4) Foreigner (a natural person, a legal entity, or other organization having foreign nationality)
(i) When a foreigner is resident or has a branch office in China, the foreigner enjoys a national treatment.
(ii) When a foreigner isn’t resident or does not have a branch office in China, the patent application by the foreigner is performed based on an agreement concluded between a nation to which the foreigner belongs and China or on an international treaty to which both the nation and China affiliate, or according to a reciprocal rule.

7. System of employment invention
(1) Definition of employment invention
(i) An invention or creation made while performing the tasks of a unit to which an inventor belongs.
or
(ii) An invention or creation made by mainly using material and technical conditions of a unit to which an inventor belongs.

(2) Possession of right: in principle, the right for an application belongs to a unit to which an inventor belongs. Note that in a case of the invention or creation described in the above-referenced (ii), the inventor or deviser can conclude an agreement with the unit to which the inventor or deviser belongs.

(3) Duty of paying compensation
(i) A unit to which a patent right is granted must pay incentive to an inventor or deviser of an employment invention or creation.
(ii) After enforcement of the patent right, the inventor or creator is given a reasonable payment based on a scope of diffusion/appliance of the invention or creation, and on economic effects obtained through the invention or creation.

8. From patent application to grant of patent right
(1) Documents required for patent application
(i) Documents required for patent application for invention or utility model: an authorization letter; a letter of request; an abstract; claims; a specification; and figures
(ii) Documents required for patent application for design: a letter of request; figures or photographs of the design; a description of a product incorporating the design and its classification
(iii) Documents required for claiming priority under The Paris Convention: a priority certificate and a deed of assignment (necessary only when an applicant described in a priority certificate does not coincide with an applicant in China)

(2) Formality examination
After a patent application, formality examination is firstly performed. When there is a formal defect, an applicant files an amendment. When the applicant does not file an amendment within a predetermined period, or when the applicant files the amendment but the amendment does not satisfy related provisions, the application is withdrawn.

(3) Publication of patent application for invention
(i) A patent application is published after 18 months from the date of filing the application.
(ii) A patent application can be published earlier upon the request of the applicant.

(4) Voluntary amendment of patent application for invention (voluntary amendment can be performed only twice)
(i) First time: an applicant can file a voluntary amendment when the applicant requires substantial examination.
(ii) Second time: the applicant can file a voluntary amendment within 3 months from the date when the applicant receives a notice, published by the Patent Administrative Department of the State Council, informing that the patent application for the invention is going to be subject to substantial examination.

(5) Substantial examination of patent application for invention
(i) An applicant can request substantial examination, in filing of a patent application for an invention, or within 3 years from the date of filing the application.
(ii) When the applicant does not request substantial examination within 3 years from the date of filing, without any justified reason, the application is considered to be withdrawn.
(iii) Substantial examination is performed upon the examination request by the applicant. Note that the Patent Administrative Department of the State Council can perform, on its own initiative, as a duty, substantial examination of the patent application for the invention.
(iiii) Matters required for substantial examination: reference data related to the invention before the date of filing the application; and when the application is filed in a foreign country, data which the foreign country has searched to examine the application or data of the result of examination is required (when the data is not submitted within a predetermined period, without any justified reason, the application is considered to be withdrawn)

(6) Appeal trial against final decision of rejection
(i) When an applicant has an objection against the final decision of rejection by the Patent Administrative Department of the State Council, the applicant can request the Patent Examination Board for a trial within 3 months from the date when the applicant has received the notice of the final decision of rejection.
(ii) When the applicant has an objection against the decision of the Patent Examination Board, the applicant can appeal to the court (Beijing First Intermediate People’s Court) within 3 months from the date when the applicant has received the notice of the decision.

(7) Term of patent right
(i) Patent right for invention: 20 years (counted from the date of filing)
(ii) Patent right for utility model and design: 10 years (counted from the date of filing)

9. Trial for requesting sentence of invalidation of patent
(1) From the date when the Patent Administrative Department of the State Council publishes the decision for granting a patent right, any entity can request the Patent Examination Board for a trial for invalidation of the patent right when the entity considers that the grant of the patent right does not conform with related provisions of the Patent Law.

(2) A patentee being a defendant can amend the scope of claims according to the patent right. However, the amendment for the scope of claims must not enlarge the original scope of claims. Further, the amendment for the specification and figures is not permitted.

(3) It is not possible to request extension of the due date designated by the Patent Examination Board.

(4) When either party has an objection against the decision of the Patent Examination Board, the party can appeal to the court (Beijing First Intermediate People’s Court) within 3 months from the date when the party has received the notice of the decision.

(5) The decision of a trial for sentence of invalidation of a patent cannot be retrospectively applied to: a decision or arbitration of infringement of the patent sentenced and executed by the People’s Court before the sentence of invalidation of the patent; an already fulfilled or compulsory executed decision of treatment for infringement of the patent; or an already fulfilled license agreement of the patent or assignment agreement of the patent. However, when others are damaged due to bad faith of a patentee, the patentee must compensate the damage (section 47(2) of the Patent Law).

(6) When a patentee or patent assignor does not return a patent royalty or patent right assignment fee to an entity entitled to exploitation of a patent or to a patent assignee according to section 47(2) of the Patent Law, and which violates the principle of equity, the patentee or patent assignor must return all of or a part of the patent royalty or patent right assignment fee (section 47(3) of the Patent Law).
10. Assignment of patent application right and patent right (section 10 of the Patent Law)
(1) A patent application right and patent right can be assigned.

(2) When a unit or individual in China assigns a patent application right or patent right to a foreigner, the unit or individual must be authorized by a department in charge of related affairs of the State council.

(3) When a patent application right or patent right is assigned, an agreement document must be concluded between inner parties and registered in the Patent Administrative Department of the State Council. The Patent Administrative Department of the State Council publishes it.

(4) Assignment of a patent application right or patent right comes into effect on the date of registration.
11. Compulsory license of patent right
(1) Reasons for granting compulsory license
(i) When a unit having conditions for exploitation requests a license for exploitation of the patent for an invention or utility model from a patentee of the patent under reasonable conditions but can not obtain the license within a reasonable period, the Patent Administrative Department of the State Council can grant a compulsory license for exploitation of the patent for an invention or utility model, based on the request from the unit.
(ii) When a national emergency or contingency occurs, or when public interests are aimed, the Patent Administrative Department of the State Council can grant a compulsory license of a patent for an invention or utility model.
(iii) When an invention or utility model for which a patent right is granted has an eminent economic significance and important inventive step in technology compared with an invention or utility model for which a patent right has been granted, and the exploitation of the later invention or utility model depends on the exploitation of the earlier invention or utility model, the Patent Administrative Department of the State Council can grant a compulsory license of the earlier invention or utility model, based on the request from the patentee of the later invention or utility model. Further, the Patent Administrative Department of the State Council can grant a compulsory license of the later invention or utility model, based on the request from the patentee of the earlier invention or utility model.

(2) A unit or individual that requests for a compulsory license must submit a certificate for showing that the unit or individual cannot conclude a license agreement with a patentee under reasonable conditions.

(3) When either party has an objection against the decision of the Patent Administrative Department of the State council concerning a compulsory license, the party can appeal to the People’s Court (Beijing First Intermediate People’s Court) within 3 months from the date when the party has received the notice of the compulsory license.
12. Salvation from infringement of patent right
(1) When a patent right is infringed, a patentee or interested party can appeal to a court, or request a department in charge of patent affairs for a treatment.

(2) When a department in charge of patent affairs treats a case of infringement of a patent right and notices the infringement of the right, the department can order an infringer of the right to promptly stop the infringement of the right, and reconcile both parties as to the amount of compensation money for the infringement, based on the request from the both parties.

(3) When a patentee or interested party has an evidence for showing that someone is infringing or will infringe the right of the patentee or interested party and that the legitimate profit of the patentee or interested party may suffer losses which cannot be compensated unless someone’s infringement is promptly stopped, the patentee or interested party can request the court for adopting an injunction for stopping related deeds and for preserving the property.