Tsai, Lee & Chen

The application process explained

Patent protection is a basic necessity for requirements have been met. doing business in China. Rights holders Applications that conform to the Patent should thus familiarise themselves with Law and its implementing regulations with no the patent application process obvious and substantial flaws, and applications that have been made to conform to such By Crystal J Chen, Eric C K Hsieh and Sylvester law and regulations by filing documents in W L Hsieh, Tsai, Lee & Chen response to official requests resulting from preliminary examination, are deemed to have The importance of the Chinese market is passed preliminary examination. universally acknowledged. Protecting IP rights, At this stage, no patentability issues are including patent rights, has become a basic considered for invention patent applications. necessity for doing business in China. An application that has passed preliminary examination is issued a ‘preliminary Types of patent examination qualified’ notification by the Inventions, utility models and designs are examiner. The application subsequently the three categories of patent protection proceeds to the publication stage. available in China. An applicant may apply for In contrast to an invention patent an invention patent to protect an innovative examination, the examination of utility model technical solution for an article or process, applications is such that any obvious and or an improvement to an article or process. substantial flaws with respect to novelty or A utility model patent protects any useful practical applicability may be grounds for refusal and new technical solution to the shape at the preliminary examination stage, although or structure of an article, or a combination no inventiveness requirement is examined. thereof. A design patent protects novel designs A design that is found to be obviously that are industrially applicable with respect to identical to a reference is deemed the shape, pattern or colour of an article, or a obviously and substantially flawed and the combination thereof. application will be refused. Once a utility model or design patent Preliminary examination application has passed the formality Once a patent application has been filed, it examination stage with no finding of an enters the preliminary examination stage. obvious or substantial flaw, SIPO issues a grant Patent applications under preliminary decision on the application and a letters-patent examination undergo a formality check by and publishes the grant patent accordingly. the State Intellectual Property Office (SIPO). Utility model and design patent At this stage, an examiner checks whether applications can be granted much faster the application contains any obvious and than invention as a result of non- substantial flaws or defects, including whether substantive examination. Consequently, the subject of innovation can be deemed in recent years filings of such applications patentable subject matter. The examiner will have increased. However, in response to the also determine whether the filing formality relatively high number of low-quality utility 2013

www.theipmediagroup.com China: Managing the IP Lifecycle 2013 11 Tsai, Lee & Chen

In response to the relatively high number of low-quality utility models and designs, SIPO intends to apply more stringent preliminary examination standards to utility model and design patent applications in future

models and designs, SIPO intends to apply No voluntary amendments can otherwise more stringent preliminary examination be made to an application. standards to utility model and design patent Article 33 of the Patent Law restricts applications in future. amendments to an invention or utility model patent application that go beyond the scope Publication of invention patents of the original description and claims. The Article 34 of the Patent Law requires that patent examination guidelines define the scope invention patent applications which have of the original description and claims of the passed preliminary examination be promptly patent right to include disclosure contained published within 18 months of the date of the in the original description and claims. Such application (or the earliest priority date where disclosure must be directly and unambiguously priority is claimed). An applicant may request confirmed and derived from the original early publication and may subsequently written description and claims and drawings withdraw an early publication request before attached to the description. However, it is the publication process commences. unclear what information can be directly and unambiguously confirmed from the original Substantive examination for inventions disclosure without any doubt by a person who Applicants for an invention patent may request is skilled in the art. SIPO is therefore strict that SIPO conduct substantive examination of regarding the examination of amendments to a the application at any time within three years patent application. In practice, any amendment of the application date (or the earliest priority that cannot be explicitly supported by a date where priority is claimed). Applications for corresponding verbatim written disclosure in which such a request is not made within the the original description will be rejected. In other prescribed time limit and without justifiable words, even though an implied meaning may cause will be deemed to have been withdrawn. be derived from the original patent description, an amendment that reflects such an implied Voluntary amendments meaning may not be supported verbatim Under Chinese patent practice, applicants that by the original disclosure of the application; wish to make voluntary amendments to their therefore, such an amendment may be rejected invention applications may do so only at the by SIPO on the grounds that it goes beyond the following times: original scope of the patent application. • when filing a request for substantive examination; or Office action at substantive examination stage • within three months of receipt of official During substantive examination, SIPO examiners notification of entering into the substantive usually notify the applicant about their opinions examination stage. in an office action and designate a time limit

12 China: Managing the IP Lifecycle 2013 www.theipmediagroup.com Tsai, Lee & Chen

for receiving a response from the applicant. The grounds for refusal are issued a notification of applicant has four months to respond to the first patent grant by SIPO. Applicants must conduct office action and two months to respond to the a registration of right and pay registration and second and each subsequent office action, if any. annuity fees within two months of receipt of the A response may constitute a statement notification. SIPO subsequently publishes the of opinions and may be accompanied by granted patent right and issues a letters-patent. an amendment of patent description. If an Failure to register within the time limit will amendment is to be made in responding result in loss of the patent right and the patent to an office action, it can address only the will be deemed abandoned. However, there is a problem identified in the office action. Any two-month restoration period from receipt of other voluntary amendment at this stage will an abandonment notification; if registration and be deemed a violation of Article 51.3 of the payment are fulfilled during this period, the lost implementing rules, pursuant to Article 33 patent right may be restored. of the Patent Law, and will be rejected by the examiners. Confidentiality examination proceedings Article 20 of the Patent Law prescribes that Re-examination requests any party that intends to file an invention Applicants that are dissatisfied with a or utility model application in a foreign rejection decision by SIPO may file a request country for an invention that was created for re-examination with SIPO’s Patent in China must report in advance to SIPO for Re-examination Board within three months of a confidentiality review. The purpose of the receipt of the rejection notice. review is to screen any invention that is of On acceptance of the re-examination vital interest to the state or that involves request, the board will forward the applicant’s national security. request to the original examiner. If the original In the event that the reporting obligation examiner agrees with the applicant’s request before filing abroad is violated and a patent and withdraws his or her original decision, application is subsequently filed in China, SIPO the board will render its decision accordingly will not grant the application. Even if SIPO finds and notify the applicant of the withdrawal of no violation of Article 20 when examining the rejection decision. However, if the original the patent application and grants the maintains his or her rejection right, the patent right will be invalidated on the opinion after reviewing the request, the board ground of violation of Article 20. will subsequently conduct re-examination There are three ways to request a and issue an office action if it believes that the confidentiality review: request does not conform to the Patent Law. • File a review request with SIPO first and The applicant will be given a period of time in obtain approval before directly filing a which to file a response before the board makes patent application in a foreign country – the its final decision. applicant can file the application abroad At the re-examination stage, it usually only after it has been approved by SIPO; takes less than six months to receive an office • File a patent application in China with a action from the board. request for a confidentiality review; or The board has the authority to revoke an • File a Patent Cooperation Treaty (PCT) examination decision rendered by SIPO. SIPO international application in China. will issue either a decision of patent grant or a rejection on new grounds. Under the patent examination guidelines, A re-examination decision can be appealed the timeframe for a confidentiality review is before the Beijing First Intermediate Court four or six months from filing of the request for within three months of receipt of the decision. review. This process is divided into two stages: • The first stage is a four-month period, Grant of patent during which a preliminary review will Invention patent applications that have passed be conducted to ascertain whether the substantive examination with no finding of invention is of national security concern

www.theipmediagroup.com China: Managing the IP Lifecycle 2013 13 Tsai, Lee & Chen

in China. If the invention is deemed In practice, the first stage of the review confidential, by no later than the end of is quick and rarely exceeds the four-month the four-month period, the applicant will period. SIPO may even issue an approval or receive notification from SIPO stating refusal notification on the same day as the that a further confidentiality review may request for a confidentiality review is filed. be conducted, in which case filing of the foreign application must be postponed. If Combined invention and utility model no notification is received from SIPO by the applications end of the four-month period, the applicant In China, given that the threshold for inventive may proceed with the foreign filing. step is relatively low for utility models, a • If notification from SIPO is received stating utility model application enjoys the benefit that the invention is deemed confidential, of a simple examination procedure; patent it will enter into the second stage of review. rights are often granted within six to eight The review period will be automatically months or even sooner. As a result, domestic extended to six months from filing of the patent applicants have long favoured filing request for a confidentiality review. SIPO utility models over invention patents. In will issue a final decision on the matter contrast, due to unfamiliarity with this type of by no later than the end of the six-month patent protection, a high percentage of foreign period. If no final decision is received from applicants still pursue invention patents rather SIPO by the end of the six-month period, than utility models. the applicant may proceed with its foreign Under the Patent Law, applicants are application. permitted to claim both invention and utility

The latest timing The latest timing to issue a decision of to issue a notification of confidentiality review confidentiality review

Request for confidentiality review

4 months

6 months

First review stage Second review stage

14 China: Managing the IP Lifecycle 2013 www.theipmediagroup.com Tsai, Lee & Chen

Publication of granted utility model patent Ceases to exist

Preliminary Utility model examination patent right

Conversion of rights from Utility model application a valid utility model right to an invention patent right

Preliminary Substantive Invention examination examination patent right

Invention patent application

Same applicant(s), applications filed on the same date Publication of granted invention patent

model patents for the same invention. This the application is for two patent rights allows an invention to be protected as a utility relating to one invention; and model patent if it meets the requirements of • The utility model patent must be valid at preliminary examination; once SIPO grants the the time that an invention patent is to be invention application for the same invention, granted, and the applicant must declare its the rights holder may opt to abandon the abandonment of the utility model patent utility model patent right and convert it into within a specific time period before the an invention patent right. By doing so, the invention patent is granted. rights holder will continue to enjoy exclusive patent rights for the same invention. Even if On publication of the granted invention the invention patent is not granted, the rights patent, the utility model patent will cease holder may retain the utility model patent. to exist. The criteria for this procedure include the following: PCT applications entering the Chinese • One invention application and one utility national phase model application must be filed; Applicants that file a PCT application and wish • The same applicant(s) must file the to enter the Chinese national phase must do so applications on the same filing date; within 30 months of the earliest priority date. • A declaration must accompany each In China, the 30-month timeframe may be application at the filing stage stating that extended to 32 months by paying a restoration

www.theipmediagroup.com China: Managing the IP Lifecycle 2013 15 Tsai, Lee & Chen

Any party that intends to file an invention or utility model application in a foreign country for an invention that was created in China must report in advance to SIPO for a confidentiality review

fee; therefore, PCT applicants may obtain an point, as the application may also lose its additional two-month grace period to enter the priority date under the Paris Convention if Chinese national phase. the 12-month grace period for a priority claim For applications that enter the Chinese has lapsed at the time when the application is national phase before the 30-month window entered in China. expires, SIPO will commence handling such applications after the expiration of the 30-month period. Early examination of a PCT application entering into China will be conducted on receipt of a written statement of opinions from the applicants. A Chinese translation of the corresponding PCT international publication must be submitted with the PCT application when entering the Chinese national phase. The number of claims in the PCT international publication form the basis for the calculation of official fees in China, despite the fact that the number of claims may be reduced when entering the national phase due to amendment of the claims under Article 28 or 41 of the Patent Cooperation Treaty. According to the PCT, if an applicant omits certain items or portions when filing an international application, it may file a request to incorporate such items or portions by means of ‘incorporation by reference’ without affecting the PCT filing date. However, SIPO does not recognise such a rule under the PCT; therefore, applicants that intend to incorporate missing items or portions into an application by reference must give up the PCT filing date and re-designate the filing date in China as the date of requesting incorporation by reference. However, it would be risky to abandon the original PCT filing date at this

16 China: Managing the IP Lifecycle 2013 www.theipmediagroup.com Contributing profiles Tsai, Lee & Chen

Tsai, Lee & Chen 11th Floor, 148 Songjiang Road, Taipei 104 Taiwan, Republic of China Tel +886 2 2571 0150 Fax +886 2 2562 9103 Web www.tsailee.com

Crystal J Chen Eric C K Hsieh Sylvester W L Hsieh Partner Senior patent engineer [email protected] [email protected] [email protected]

Crystal Chen is a partner at Tsai Eric Hsieh is a patent attorney Sylvester Hsieh is a senior Lee & Chen. She is admitted to in China and deputy manager patent engineer at Tsai Lee & the National Bar of China and of Tsai Lee & Chen’s domestic Chen and heads the electronics the New York State Bar. patent division based in and mechanics section of the Ms Chen commenced Taipei, Taiwan. firm’s international division in practising in the IP field in Mr Hsieh counsels Taipei, Taiwan. 1996. She counsels on patent numerous domestic companies Before joining Tsai Lee and trademark prosecution and on patent applications and & Chen, Mr Hsieh worked enforcement and cross-border prosecution for Taiwan at United Microelectronics dispute resolution in Taiwan and China and provides Corporation on computer and China, and has advised invalidation and freedom-to- repair/maintenance extensively on the risks of patent operate opinions in China. He engineering, and was an protection and infringement qualified as a Chinese patent assistant teacher on the opinions, as well as litigation attorney in 2011. digital logic course at National and settlement negotiation. She Mr Hsieh has a master’s Taiwan Ocean University. Mr is a prolific writer and speaker, in mechanical engineering Hsieh has been practising and constantly provides clients from National Chiao-Tung Taiwan and China patent with updates on IP law and University, Taiwan. He has prosecution since 2004. He prosecution and enforcement extensive experience in has extensive experience practices relating to Taiwan assisting the automotive and in providing international and China. semiconductor industries and is clients with strategies on the Ms Chen has an LLB from the particularly knowledgeable on prosecution of Chinese patent Fu-Jen Catholic University School ultrasonic equipment, digital applications. He is particularly of Law, Taiwan and an LLM in image processing and quality knowledgeable on high- intellectual property from the management systems. tech areas, including circuit University of New Hampshire designs, semiconductors, School of Law (formerly the communications and Franklin Pierce Law Centre). computer software.

www.theipmediagroup.com China: Managing the IP Lifecycle 2013 17