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Applying for a patent

Patentability
What are the criteria for patentability in your jurisdiction?

An invention or utility model must meet the following requirements to be patentable (Article 22 of the Patent Law):

  • Novelty – the invention or utility model is not existing technology or disclosed in another patent application filed in China before the date of filing, but published after the date of filing.
  • Inventiveness – the invention has prominent and substantive features and represents notable progress, or the utility model possesses substantive features and represents progress.
  • Usefulness – the invention or utility model has practical applicability.

A design must meet the following requirements to be patented:

  • Novelty – the design is not attributable to any existing design.
  • Distinctive – the design is distinctively different from existing designs or a combination of existing designs.
  • No conflict with other rights – the design cannot conflict with the existing legal rights of other parties (eg, trademark rights, copyrights, enterprise name rights, portrait rights and well-known trade dress rights).

In addition, an invention, utility model or design that is the subject of a patent application must meet the following definitions, respectively (Article 2 of the Patent Law):

  • Invention – a new technical solution relating to a product, process or an improvement thereof;
  • Utility model – a new technical solution relating to the shape, structure or a combination of shape and structure of a product which is fit for practical use; and
  • Design – a new design of a product’s shape, pattern, a combination of shape and pattern or a combination of colour and shape or pattern which creates an aesthetic feeling and is fit for industrial application.

What are the limits on patentability?

The following subject matter cannot be patented (Articles 5 and 25 of the Patent Law):

  • inventions or creations that are contrary to Chinese laws or social morality, or that are detrimental to public interests;
  • inventions or creations completed on the basis of genetic resources, where their acquisition or use breaches related laws and regulations;
  • scientific discoveries;
  • rules and methods of intellectual activities;
  • methods for diagnosing or treating diseases;
  • animal and plant varieties; and
  • substances obtained by means of nuclear transformation.

Designs that comprise patterns, colours or a combination of the two on printed flat works where the main purpose of the design is to identify the source of the product on which the design is used cannot be patented.

Animal and plant varieties are protected under other laws, such as the Regulations on the Protection of New Varieties of Plants. Non-biological methods for producing animal and plant varieties can be patented.

To what extent can inventions covering software be patented?

Software inventions that comprise only rules and methods for intellectual activities are not patentable. However, software inventions that comprise both rules and methods for intellectual activities and technical features (ie, the invention uses technical means in order to solve technical problems and obtain technical effects) can be patented.

To what extent can inventions covering business methods be patented?

Generally, business methods cannot be patented because they are considered unpatentable rules and methods for intellectual activities.

To what extent can inventions relating to stem cells be patented?

The Patent Examination Guideline expressly states that the following inventions cannot be patented:

  • embryonic stem cells of humans and methods of preparation thereof, as they violate social morality;
  • embryonic stem cells of animals, because they are considered to be within the scope of unpatentable animal varieties; and
  • inventions that relate to stem cells obtained in ways that violate laws or social morality (ie, directly obtained from a human embryo).

Are there restrictions on any other kinds of invention?

No other restrictions are expressly set forth in the Patent Law or applicable regulations.

Grace period
Does your jurisdiction have a grace period? If so, how does it work?

China allows a six-month grace period in limited circumstances.

The novelty of an invention covered by a patent application is not affected by a public disclosure made six months before the application where one of the following occurs:

  • The invention was first exhibited by the applicant at an international exhibition sponsored or recognised by the government.
  • The invention was first made public by the applicant at a prescribed academic or technology-related meeting.
  • The invention was publicly disclosed by any person without authorisation.

Oppositions
What types of patent opposition procedure are available in your jurisdiction?

China has no patent opposition procedure. 

Apart from oppositions, are there any other ways to challenge a patent outside the courts?

Any entity or individual (including a patent owner) can challenge the validity of a granted patent by filing an invalidation application with the Patent Review Board, which is a separate body from the courts. A patent can be invalidated on the following limited grounds:

  • Confidentiality examination requirements for inventions made in China were not satisfied before filing of the patent outside China.
  • There is a lack of novelty, inventiveness or usefulness.
  • There was insufficient disclosure.
  • The description does not support the claims.
  • Amendments to the patent application documents exceed the original scope.
  • Independent claims fail to state the essential technical features of the solution to the technical problem.

Any entity or individual can submit observations specifying reasons why an application does not comply with the Patent Law to the Patent Office after the application has been published, but before the mailing date of the notice of allowance. Such observations are recorded in the application dossier and may be considered by the examiner during substantive examination. The entity or individual making the third-party observation will not be notified of whether the observations have been considered.

How can patent office decisions be appealed in your jurisdiction?

An applicant can appeal a Patent Office decision to the Patent Review Board. If the applicant disagrees with the Patent Review Board’s decision, it can appeal by filing an administrative litigation with a people’s court. 

Timescale and costs
How long should an applicant expect to wait before being granted a patent and what level of cost should it budget for?

The State Intellectual Property Office performs different examination procedures for inventions, utility models and design patents:

  • For invention patents, the State IP Office performs a preliminary examination within 18 months of the filing/priority date (earlier if so requested by the applicant), followed by a substantive examination commenced at the applicant’s request.
  • For utility models and design patents, the State IP Office performs only a preliminary examination.

An applicant can expect to wait between two-and-a-half years and five years to obtain an invention patent, and less than one year to obtain a utility model or design patent.

Patent filing costs include official fees, annual maintenance fees and patent agent/patent attorneys’ fees. The official fees vary depending on:

  • the length of the specifications;
  • the number of claims; and
  • whether there were delays in responding to office actions.

The following chart summarises the official fees and maintenance fees that applicants can expect to pay for each type of patent.

Patent type Official fees Maintenance fees
Inventions Between $750 and $5,000 Between $150 and $1,300 per year (approximately $13,500 over 20 years)
Utility models Between $250 and $2,500 Between $100 and $325 per year (approximately $1,850 over 10 years)
Designs Between $250 and $2,500 Between $100 and $325 per year (approximately $1,850 over 10 years)

The fees described above are based on information published by the State IP Office at www.sipo.gov.cn/zlsqzn/sqq/zlfy/200804/t20080422_390241.html

Enforcement through the courts

Strategy
What are the most effective ways for a patent owner to enforce its rights in your jurisdiction?

If a patent is infringed, the patent owner or any interested party can:

  • apply for pre-trial relief in the form of applications for preservation of evidence and property or a preliminary injunction (which requires a bond to be posted);
  • initiate legal proceedings in a people’s court, seeking an injunction and damages; and
  • initiate administrative proceedings with a local IP office, which can grant an injunction and issue fines, but cannot award damages or preliminary injunctions.

What scope is there for forum selection?

Patent owners can initiate legal proceedings in the people’s court located where the infringement took place or where the defendant is located.

Pre-trial
What are the stages in the litigation process leading up to a full trial?

Before filing a complaint, the following activities generally take place:

  • investigation;
  • evidence gathering;
  • applications for preservation of evidence and property;
  • applications for preliminary injunctions; and
  • preparation and filing of the complaint.

Next, various pre-trial hearings are held to review preliminary issues and present pre-trial applications (eg, for preservation of evidence), and for each side to present and challenge evidence. Pre-trial hearings can be fairly substantive and involved, and if several pre-trial hearings are held, the actual trial can be relatively short (particularly compared to trials in the United States).

How easy is it for defendants to delay proceedings and how can plaintiffs prevent them from doing so?

Both plaintiffs and defendants can request that a trial be delayed for the following reasons:

  • to give notice to new witnesses;
  • to investigate and collect new evidence; and
  • to carry out re-appraisal or re-inspection.

The party against which the delay is sought must show that the delay is unnecessary.

In patent infringement cases, defendants can delay the trial by filing a patent invalidation application with the Patent Review Board in order to invalidate the plaintiff’s patent or narrow the patent’s scope. If invalidation applications are filed, the trial court will decide whether to suspend the trial proceedings until the validity of the patent is determined.

How might a party challenge the validity of a patent through the courts in anticipation of a potential suit for infringement being issued against it?

A party cannot file an invalidation application with the people’s courts. The defendant to a patent infringement suit or a party anticipating a potential infringement suit can commence invalidation proceedings with the Patent Review Board at any time in order to invalidate the patent which it is, or anticipates being, accused of infringing.

Any party can request a people’s court to declare that its conduct does not infringe a patent (ie, a declaration of non-infringement) if the following conditions are satisfied:

  • the patent owner has issued a warning against the infringing party regarding the infringement of its patent rights;
  • the party that has been warned or an interested party has urged in writing that the patent owner exercise its right to sue; and
  • the patent owner has failed to withdraw the warning or does not file a suit within one month of receiving the above response, or within two months of the above response being sent.

At trial
What level of expertise can a patent owner expect from the courts?

Most judges have no technical background. Expert testimony and reports from judicial appraisal centres and court-appointed experts can be used to help judges identify and understand the technical facts of a patent case. At the end of 2014, China established three IP courts in Beijing, Shanghai and Guangzhou. The three IP courts established a network of technical investigation officers, who assist judges in investigating, understanding and identifying the technical issues in patent cases.

Are cases decided by one judge, a panel of judges or a jury?

A single judge or a panel of judges decides civil cases, depending on the complexity of the case. A three-judge panel decides most patent cases.

If jury trials do exist, what is the process for deciding whether a case should be put to a jury?

Jury trials do not exist in China.

What role can and do expert witnesses play in proceedings?

Expert witnesses are used to help judges investigate relevant technical facts in patent cases, not non-technical facts. Both the plaintiff and defendant can question expert witnesses. The people’s courts determine the acceptability of an expert witness.

Does your jurisdiction apply a doctrine of equivalents and, if so, how?

China applies the doctrine of equivalents. In addition to considering the literal scope of a patent claim, the patent scope is determined by considering features that are not specifically covered by, but are equivalent to, the technical features of a patent claim. Equivalent features are those that:

  • use substantially the same means, perform substantially the same function and produce substantially the same effect as the claimed technical features; and
  • could have been contemplated by a person with ordinary skill in the art without inventive labour before the date of the alleged infringement.

Is it possible to obtain preliminary injunctions? If so, under what circumstances?

Patent owners or interested parties may obtain preliminary injunctions (although it is rare for one to be granted in a patent case) from a people’s court if the following are sufficiently demonstrated:

  • the patent owner or an interested party has a valid patent right or an interest in the valid patent right;
  • the party that the injunction is sought against is performing or is going to perform infringing acts;
  • the acts will likely cause irreparable harm; and
  • guarantee

How are issues around infringement and validity treated in your jurisdiction?

In China, determination of patent validity and patent infringement is bifurcated, with the Patent Review Board determining patent validity and the people’s court determining patent infringements.

Any party (including the patent owner) can bring an invalidation action against a granted patent by filing an invalidation application with the Patent Review Board. A patent may be invalidated based on the following limited grounds:

  • Confidentiality examination requirements for inventions made in China were not satisfied before filing of the patent outside China.
  • There is a lack of novelty, inventiveness or usefulness.
  • There is insufficient disclosure.
  • The description does not support the claims.
  • Amendments to the patent application documents exceed the original scope.
  • Independent claims fail to state the essential technical features of the solution to the technical problem.

A patent cannot be invalidated solely on the basis that the listed inventors are not the actual creators of the invention.

The patent owner or an interested party (eg, a licensee) can bring a patent infringement claim against a defendant by filing a complaint with a people’s court. The party bringing the claim must demonstrate that it is the patent owner or an authorised interested party.

There is no requirement to file an invalidation application with the Patent Review Board before filing a patent infringement claim or vice versa.

A defendant to a patent infringement claim before a people’s court will often file an invalidation application with the Patent Review Board. In such cases, the people’s court will decide whether to stay the infringement proceedings until final determination of the invalidation action. If the people’s court decides not to stay the infringement proceedings, both the infringement proceedings and the invalidation proceedings will continue. The Patent Review Board will continue the invalidation action regardless of the court’s decision. As a result, there is a possibility that the rulings of the people’s court and the Patent Review Board will be inconsistent (ie, the people’s court may find that the patent was infringed, while the Patent Review Board finds that the patent is invalid). In such cases, a party can appeal or request a retrial by presenting the invalidation decision as new evidence.

To mitigate the possibility that the Patent Review Board’s invalidity ruling will not be rendered in time to be considered in court, defendants can rely on the prior art defence. Under the prior art defence, defendants are not held liable for infringement if they can prove that all of the technical features claimed in the patent that they are accused of infringing are the same as, or not substantively different from, the features of an existing technology and are thus covered by the prior art. Through the prior art defence, the people’s courts can (although this right is limited) find that a patent has not been infringed without making a determination on validity (which is reserved for the Patent Review Board) if it considers the patent covers technology already existing in the prior art.

Will courts consider decisions in cases involving similar issues from other jurisdictions?

As China’s legal system is a civil law system, no tradition or statute requires the people’s courts to follow prior decisions involving similar issues in China or in other jurisdictions. However, many judges follow and consider the reasoning behind landmark Chinese decisions and decisions from other jurisdictions, and may consider arguments based on reasoning from landmark decisions. 

Damages and remedies
Can the successful party obtain costs from the losing party?

A successful patent owner can be awarded court fees and seek reasonable costs incurred in stopping the patent infringement, including reasonable attorneys’ fees.

What are the typical remedies granted to a successful plaintiff?

In patent infringement cases, the people’s courts can grant successful plaintiffs the following remedies:

  • preliminary injunctions;
  • final injunctions;
  • reasonable fees for pre-grant use between the publication date and patent grant date (available only for invention patents);
  • damages for post-grant infringement; and
  • court fees and reasonable costs incurred for stopping the patent infringement, including reasonable attorneys’ fees.

How are damages awards calculated? Are punitive damages available?

Under the Patent Law, damages are determined as follows:

  • actual losses due to infringement;
  • gains of the infringer from infringement (if actual loss is difficult to determine);
  • an appropriate multiple of a reasonable royalty fee (if actual loss and gains are difficult to determine); or
  • statutory damages of between Rmb10,000 and Rmb1 million (if actual loss, gains and royalty fees are difficult to determine).

In the fourth Patent Law amendment (draft for review), statutory damages are amended to between Rmb100,000 and Rmb5 million.

Punitive damages are not available under the Patent Law, but under the fourth Patent Law amendment (draft for review) enhanced damages of up to three times the damages originally awarded are available for wilful infringement. 

How common is it for courts to grant permanent injunctions to successful plaintiffs and under what circumstances will they do this?

The people’s courts usually grant permanent injunctions to successful plaintiffs.

Timescale and costs
How long does it take to obtain a decision at first instance and is it possible to expedite this process?

Under the Civil Procedure Law, a first-instance decision in a civil case between two Chinese parties should be obtained within six months of the date on which the case is accepted. In practice, the actual timing varies and can greatly exceed six months. There is no formal way to expedite the trial process.

How much should a litigant plan to pay to take a case through to a first-instance decision?

Costs to obtain a first-instance decision include:

  • investigation and evidence-gathering costs;
  • court fees (in patent infringement cases, these depend on the amount of damages claimed, typically 0.5% to 2% of the damages claimed);
  • expert or appraisal centre fees (if used); and
  • attorneys’ fees.

Costs vary depending on:

  • the complexity of the case;
  • the technology in question;
  • the amount of damages involved;
  • the evidence-gathering mechanisms employed;
  • the difficulty gathering evidence; and
  • whether experts or an appraisal centre is used.

Appeal
Under what circumstances will the losing party in a first-instance case be granted the right to appeal? How long does an appeal typically take?

Each party has a single automatic right to appeal to the people’s court at the next level. Any second-instance appeal must be granted by the people’s court at the next level. Appeal decisions typically take six to 12 months after the date on which the appeal is accepted (excluding time not calculated as part of the trial period, such as the time needed for judicial appraisals).

Options away from court
Are there other dispute resolution options open to parties that believe their patents to be infringed outside the courts?

Patent owners or interested parties can commence administrative proceedings with a local IP office, which can:

  • investigate and collect evidence of infringement;
  • determine whether an infringement has occurred;
  • order infringers to stop infringing acts, including stopping of manufacturing, destroying of devices and models used to produce the infringing product, stopping the sale of infringing products or destroying infringing products that are hard to store; and
  • mediate the amount of damages owed to the rights holder in a patent infringement matter on the request of rights holder or interested parties.