Intellectual property

Patentability and inventorship

What are the most noteworthy rules and considerations relating to the patentability and inventorship of digital health-related inventions?

Except for certain non-patentable subject matter (for example, rules and methods of intellectual activities, genetic sequences, methods of diagnosing or treating diseases, or animal or plant varieties), in general, inventions that meet the patentability requirements can be claimed in a patent. Both method claims and product claims can be claimed for digital health-related inventions.

 

Digital health-related inventions (such as software, algorithms, business rules, databases and AI-generated content) that only claim rules and methods for intellectual activities are not patentable. However, such inventions can be patented if they also include technical features (that is, the invention uses technical means to solve technical problems and obtain technical effects).

Patent prosecution

What is the patent application and registration procedure for digital health technologies in your jurisdiction?

Digital health technologies may be eligible for patent protection in China as a patentable invention (method or device), utility model (device only), or design (device only). Under the PRC Patent Law, the term and examination procedure for these three kinds of patents are as follows:

  • invention patent: term is 20 years from the filing date, and procedure requires both preliminary examination and substantive examination;
  • utility patent: term is 10 years from the filing date, and procedure requires preliminary examination; and
  • design patent: term is 15 years from the filing date, and procedure requires preliminary examination.

 

The patent application and registration procedure for patentable digital health technologies is generally the same as for other patentable inventions, utility models, and designs. To file a patent application, the owner of the invention or the right to file a patent for the invention needs to engage a PRC patent agent. A patent application, disclosing the invention in a clear and complete manner, must be prepared and submitted to the China National Intellectual Property Administration (CNIPA), and official filings fees must be paid. For an invention patent application, a substantive examination of the patentability of the patent must be conducted by CNIPA.

Other IP rights

Are any other IP rights relevant in the context of digital health offerings? How are these rights secured?

Data, algorithms, and software are important categories of intellectual property for digital health technologies. In China, software, and to some extent, databases, are protected by copyright. By default, the copyright is owned by the author or company that generates or develops such software or database.

 

Proprietary know-how that has commercial value are protectable in China as trade secrets. Consequently, trade secrets are another means of protecting digital health technologies that are not suitable for other forms of IP protection.

Licensing

What practical considerations are relevant when licensing IP rights in digital health technologies?

Some key practical considerations for IP licensing transactions involving digital health technologies include:

  • Data rights and ownership: it is important to understand, as between the licensor and licensee, who owns the data generated under the licence agreement, how such data will be used, whether such data will be shared between the parties, who owns the insights or technology derived from the use of such data, and whether revenue resulting from the use of such data or technology will be shared.
  • Scope of IP being licensed and rights of access: it is important to clearly define what IP is being licensed, whether it includes all the IP that is needed for a party to exploit the technology, and whether it contains updates or new IP that is later created. For software licences, it is important to clearly define the versions and features of the software being licensed, and whether updates are included.
  • Exclusivity v non-exclusivity: it is important to understand which licensed rights are granted on an exclusive basis and which are granted on a non-exclusive basis, as it will impact what a licensee can do with the IP rights obtained and what a licensor can do with the IP rights that are licensed.
  • Termination provision: triggers for termination and the effects of termination are usually heavily negotiated provisions in a licence agreement, particularly if licensed rights are granted exclusively.  
  • Performance targets: the parties often need to determine what are their respective obligations for utilising the licensed IP, and what are the consequences if a party’s performance falls short of expectations.
  • Regulatory obligations: the parties should ensure to comply with any export control, HGRAC regulations and other data related regulations and may want to set out specific compliance provisions in the agreement.
Enforcement

What procedures govern the enforcement of IP rights in digital health technologies? Have there been any notable enforcement actions involving digital health technologies in your jurisdiction?

Civil litigation and administrative enforcement actions are the two most relevant options for enforcing IP rights in digital health technologies.

 

Civil litigations typically occur with the following steps:

  • The enforcing party investigates and gathers evidence of infringement.
  • The enforcing party files applications for preliminary relief, evidence preservation and property preservation with the People's Court, followed by a formal civil complaint and supporting evidence.  The defendant can submit a formal defence and rebuttal evidence. For enforcement of patents, the defendant can file a patent invalidation application with the Patent Re-Examination Board at any time.
  • An oral hearing is conducted and decision is rendered by the People’s Court.
  • Either party can appeal the decision by filing an appeal with the higher-level People's Court.

 

Administrative enforcement actions typically occur with the following steps:

  • The enforcing party investigates and gathers evidence of infringement.
  • The enforcing party files an administrative complaint with the CNIPA or its local office or other administrative authority.
  • The relevant administrative authority investigates and takes action to obtain evidence of infringement. The defendant can submit a formal defence and rebuttal evidence. Oral hearings may be conducted.
  • The administrative authority issues a decision.
  • Either party can appeal the decision by filing an administrative lawsuit with the People's Court.

 

Mindray Biomedical Electronics Co, Ltd v Shenzhen Huasheng Medical Technology Co, Ltd is a recent notable case involving digital health technologies, which was decided in July 2020. In the case, Mindray sued Huasheng to enforce its patent relating to ‘Body Map Operation Methods and Systems for Ultrasound Diagnostic Equipment’. The Supreme People’s Court ruled in the Mindray’s favour and awarded damages of 1 million yuan to compensate Mindray for its economic losses and reasonable enforcement costs.