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The Utility Model – an Effective Tool in Global Patent Portfolio Protection

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The Utility Model – an Effective Tool in Global Patent Portfolio Protection lion.4 While the dollar amounts might seem small in comparison to patent litigation in the Utility Model – An the U.S., the Chint case has been described as one of the largest patent damages ver- effective tool in Global Patent dicts in China to date. when tO Use A Utility MOdel Portfolio Protection there are a number of situations when a company should consider filing for one or By Patrick Jewik Germany, Japan, taiwan, Korea, and France. Countries such as the United States, more utility models. Below is a discussion united Kingdom and the Netherlands have of the circumstances when utility models patents, but do not have utility models. should be considered. different countries that allow for utility Immediate and comprehensive protection is model protection may have different terms important. of protection. They may also have different In many countries, the patent process standards for validity (e.g., different levels can easily take three to five years (or more) of inventiveness or different prior art stan- before a patent is issued. This is simply too dards) than what they have in place for pat- long for many industries, where the first to s global commerce increases and intel- ents.3 Both of these are detailed in Table 2. market determines the viability of a com- lectual property budgets shrink, com- like regular patent applications, utility pany. Many inventions can be commercial- A panies and organizations should look model applications may be filed as national ized shortly after conception (or may have at different approaches in protecting their phase filings of Pct (Patent cooperation a short commercial lifetime). Protection for patent portfolio worldwide. utility models, treaty) applications. Also like regular pat- those inventions must be obtained quickly often overlooked and underutilized, can pro- ent applications, they may be filed directly to deter imitation or duplication while the vide a means for a cost-effective interna- in foreign countries without using the Pct tional patent portfolio strategy. although application process. inventions gain commercial acceptance in widely used in the countries that have them, utility models are generally less popu- the marketplace. they’re curiously unpopular with non-resi- lar than patents, but they can still be a In addition, a company may be involved dents. In china, for example, greater than significant deterrent to copying. Many of in licensing negotiations or litigation. 99% of utility models are filed by Chinese the remedies associated with patents are rapid intellectual property procurement residents, while less than 1% of utility mod- also generally available for utility models, may be necessary as bargaining tools for the els are filed by non-residents.1 this is the including, but not limited to, injunctions negotiations or litigation. Intellectual prop- case, even though the number of utility mod- and damages. thus, a potential infringer erty protection for such inventions must be els registered is only slightly less than the cannot afford to ignore the presence of utility obtained quickly to be of any value. number of patents granted in china.2 this models simply because they are not patents. the immediate protection that utility article takes a look at utility models – how the effectiveness of utility models was models can provide is due in large part to they work and when to use them – and why demonstrated in recent litigation in China the registration process which is signifi- u.S. corporations, who previously might not cantly shorter than the process for obtaining have appreciated their value, should enter- between chint, a manufacturer of low a patent as there is no substantive exami- tain using them for their patent portfolios. voltage devices in china, and Schneider electric. In that litigation, chint suc- nation process. In most cases, it typically An Overview Of Utility MOdels ceeded in asserting its utility model against takes less than a year to obtain a utility Schneider and obtained a verdict of $49 model registration, making it significantly a utility model is a registered right million, a productive result for a utility shorter than the time period for a patent. which provides protection for an invention. model application with just a $70 filing fee. In addition, because there is no substantive utility models are sometimes referred to chint’s utility model survived Schneider’s examination, unlike a patent, the registra- as “petty patents.” they were originally subsequent invalidity challenge, with tion of a utility model is certain upon the intended to protect “minor inventions” or Schneider settling the lawsuit for $23 mil- application being filed. inventions that are less inventive than those covered by patents. TABle 1 there are a number of differences Patents Utility Models between utility models and patents. Utility Term of Protection typically 20 years from the typically 10 years from the models generally have a shorter protection filing date. filing date. term and are faster and easier to obtain Procedure a search and examination are neither a search nor an than patents. Patents, on the other hand, conducted. examination is conducted. can cover more types of inventions. Some Time from filing to typically 2-3 years or more. typically less than 1 year. general differences between patents and patent or registration utility models are in Table 1. Cost Substantially higher due to Significantly lower than patents. Many industrialized countries have both prosecution costs. patents and utility models. these include Processes protectable? yes no 20 Intellectual ProPerty Today NOVeMBer, 2010 TABle 2 theoretically harder to invalidate a utility Germany Japan France Korea Taiwan China model than a patent in a country such as Term from filing 10 years 10 years 6 years 10 years 10 years 10 years china. that is, a claim in a patent may date be invalidated if the invention is shown to Different validity yes no no no no yes lack an inventive step or if the invention is standard? obvious in view of the prior art. However, that same claim in a utility model may not In many countries, utility models can $8,000 or $12,000. If a single patent appli- be invalidated in view of that same prior be pursued simultaneously with patents, cation is filed in five foreign countries, the art, because the standard for a valid utility thereby providing comprehensive protection cost savings associated with obtaining five model is less stringent than the standard for an invention. In Germany, for example, utility models as compared to five patents for a patent. one can file applications for both a patent can exceed $40,000 or $60,000. In addition, lastly, utility models can be used to and a utility model for the same subject because the lifetime of most utility models cover design around embodiments that matter, enabling the company to obtain is 10 years, there are no annuity payments were previously not contemplated. If the both immediate short-term protection (utility after the utility model has expired. annuity design around is a seemingly obvious vari- models) and stronger long term protection payments for patents after the 10th year are ant that does not have a sufficient inventive (patents) for an invention. In some countries significant in most countries. These costs are step that can distinguish over the inven- that offer both utility model and patent reg- only associated with one hypothetical patent tion of the original patent, a utility model istrations, only one type of protection may be family and do not take into account the time application may be filed to quickly cover retained to avoid duplicate protection for the that a client must spend analyzing and provid- the design around embodiment, without same invention. In China, for example, one ing instructions for responding to examination expending significant resources. can obtain a utility model registration for an reports. Many companies maintain and pros- as international commerce increases, invention first and pursue a patent for the ecute many patent families so the cost savings there exists a need for comprehensive global same invention at the same time. If a pat- for such companies can be very significant. patent procurement strategies. Such strate- ent eventually issues, then either the utility gies should include the use of utility models. The invention to be protected has a lower model or the patent must be abandoned to Patrick Jewik is a partner at Townsend level of inventiveness avoid double patenting. and townsend and crew and leads the In some countries, the inventive stan- By pursuing both utility model and patent firm’s electronics and Software Group. dard associated with a valid utility model protection simultaneously, a company can He was a former patent examiner at the is lower than the inventive standard for a maximize all possible intellectual property uSPto and has extensive experience help- patent. utility models therefore allow one protection for an invention. It also provides ing clients build strategic patent portfolios, to protect an invention that could otherwise the company with more options. If a patent design around patents, and achieve maxi- be protected with a patent. In china, for eventually issues, for example, the utility mum business advantage with their patents. example, for a utility model to be valid, model for the invention can be abandoned to the author would like to thank lars the invention must be “new, inventive, and reduce costs. Pursuing both also increases Birken of Eisenführ Speiser and Tyler Gee applicable in practice.” 5 It must also have the ability of the company to leverage busi- of Townsend for their assistance and review “substantive features and must represent ness opportunities, something that may not of this article. IPT progress.” 6 By comparison, for a patent to have been open to a company given the be valid in China, the invention must have length of the patent application process.
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