On December 21, 2023, China’s State Council promulgated the long-awaited “Decision on Amending the Implementing Regulations of the Patent Law of the People’s Republic of China”.The amended regulations make adjustments to an array of aspects, including inter alia, partial design patents, national priority for designs, patent term extension (PTA & PTE), and the patent open licensing regime, to align with the Fourth Amendment to the Patent Law (2021). On top of that, the CNIPA releases on the same day the “2023 Patent Examination Guidelines” to offer practitioners explicit guidance from a practical perspective. The amended regulations and the new examination guidelines will enter into force as of January 20, 2024.
This article intends to dissect the main modifications of the implementing regulations to help readers better understand and navigate the legislative changes.
- Partial Designs (Rules 30 & 31)
The amended regulations delineate the manner in which partial designs should be articulated in application documents. Specifically, applicants need to submit the views of the product as a whole, indicating the portion of the product for which protection is sought, and, if necessary, specifying the portion of the product for which protection is sought in a brief description. This practice serves a bifurcated purpose: 1) it broadens the eligible subject matters of designs by allowing a partial product design to be granted patent right, and in the meantime 2) it forestalls applicants from acquiring an unduly expansive scope of protection by filing for a partial product design.
- National Priority for Designs (Rule 35)
Aligned with the Fourth Amendment of the Patent Law, which provides that a design application may claim national priority, the amended regulations further clarify that the drawings accompanying an invention or utility model may serve as the basis for claiming priority in a subsequent design application. This is very welcome as it allows right holders to patent not only the internal or external structural features of a product as inventions or utility models, but also the exterior design features as design patents. It will offer right holders greater flexibility and more options in building a comprehensive and multi-dimensional patent portfolio around a given invention or creation.
- Delayed Examination (Rule 56)
The amended regulations specify that an applicant may file a request for deferred examination of a patent application. Initially introduced in the 2019 Patent Examination Guidelines, this mechanism was applicable to applications for inventions and designs and the request could not be retracted. The amended regulations allow the applicants to file delayed examination requests for inventions, utility models and designs, and offer them the flexibility to withdraw the requests if necessary.
- Patent Term Extension (Rules 77 to 84)
The Fourth Amendment to the Patent Law introduces the patent term extension regime to 1) compensate for the unreasonable delays in the patent grant procedure (known as patent term adjustment or PTA) or 2) compensate for the length of time needed to obtain administrative approval to market new drugs in China (known as patent term extension or PTE).
The amended regulations enumerate the prerequisite for an extension, the circumstances of reasonable and unreasonable delay, and the calculation method of term extension. Specifically, in the first scenario, the request for adjustment shall be made within 3 months from the date of granting, and shall be determined by deducting the number of days of unreasonable delay caused by the applicant and the reasonable delay from the interval between the date on which the application has been filed for 4 years and the request for examination has been filed for 3 years and the date on which the announcement of the grant of the patent right is made.
In a nutshell, the formula to calculate PTA is summarized as follows:
PTA = Date on which the announcement of the grant of patent right – Date on which the application has been filed for 4 years and the request for examination has been filed for 3 years – the number of days of unreasonable delay caused by the applicant – the number of days of the reasonable delay.
The regulations also employ a standardized method for calculating the compensation period for new drug patents by deducting five years from the number of days between the filing date of the patent and the date when the new drug receives marketing authorization in China, which shall be subject to the provisions outlined in Article 42.3 of the Patent Law. Specifically, the compensation period is capped at “5 years”, with the total validity period of patent right after the approval of the application for marketing authorization of the drug capped at “14 years”.
Likewise, the formula to calculate PTE is summarized as follows:
PTE = Date on which the new drug receives marketing approval – Filing date – 5 years
- Open Licensing Regime (Rules 85 to 88)
The fourth amendment to the Patent Law installs an open licensing regime to incentivise patent commercialization. The mechanism, which attempts to present patented solutions in an open and transparent manner, is expected to provide potential implementers wider access to patented technologies and thus facilitate its implementation and monetization among SMEs.
As early as May 2022, the CNIPA released the Patent Open Licensing Pilot Programme. By the end of June 2023, some 1,500 patentees from 22 provinces have participated in the pilot project, with 35,000 patents being screened and nearly 8,000 licenses being concluded. Although the amended regulations are short on details in terms of payment and management of royalties and dispute resolution among different parties, the CNIPA is expected to explore viable solutions through implementation of the regime in the future.
- Service Invention (Rules 92 & 93)
The amended regulations encourage the patentees (employer) to share with the inventors or designers (employee) the revenues yielded from the innovation by incentivizing the latter with equity, options, dividends, among others (Rule 92). In case there is no agreement or provision in the patentee’s bylaws expatiating on the amount of reward and remuneration that should be awarded to the inventor of a service invention, the statutory amount of reward for a granted patent shall be no less than RMB 4,000 for an invention and no less than RMB1,500 for a utility model or a design (Rule 93).
- Harmonisation with the Hague Agreement (Rules 136 to 144)
In response to the entry-into-force of the “Hague Agreement for the International Registration of Industrial Designs” in China (May 5, 2022), the amended regulations include a new Chapter XII, outlining provisions concerning filing requirements, examination procedures and priority issues for international applications for industrial designs. The international design application designating China will be published by the International Bureau of WIPO and be subject to CNIPA’s examination, with the international registration date being deemed as the application date of such design in China. If no grounds for refusal are found during the examination, the CNIPA will grant an international design application and notify the International Bureau.
- Dates of Service of Electronic Documents (Rule 4)
The amended regulations specify the filing date and the date of service for the documents filed and served through the CNIPA’s e-filing system. While the filing date of the electronic document remains unchanged as the date of entry of such document into the e-filing system, the date of service will be the date of entry of the said document into the electronic system recognized by the parties, rather than 15 days after the post of the hardcopy document.
In practical terms, electronically served documents will reach the parties’ electronic systems almost immediately upon transmission, which will shorten the examination period.
- New Examination Criteria for Utility Models and Designs (Rule 50)
The amended regulations impose more stringent examination criteria for utility models and design applications. It is worth noting that other than novelty, the presence of preliminary inventiveness has been added to the patentability assessment of utility models. In the case of designs, a patentable design application should be “clearly distinguishable from the existing design or a combination of features of the existing design”.
This approach is part of the CNIPA’s efforts to discourage the filing, granting and proliferation of low-quality patents in China.
- Patent Evaluation Report (Rules 62 & 63)
The newly amended Rules clarify that the eligible applicants for patent evaluation reports include the patentee, the interested party, and the alleged infringer, and add the provision that the applicant may request a patent evaluation report while going through the registration procedure, without waiting for the announcement of the granting of the utility model or design patent.
- Re-examination Procedure (Rule 67)
Though the amended regulations delete the provision concerning “prepositive examination” (Rule 62), an examination procedure preceding the formal re-examination, it is retained in the 2023 Patent Examination Guidelines. A notable change in the 2023 Guidelines: as of January 20, 2024, the re-examination request will be heard by a different examiner rather than the prior examiner who issued the rejection decision. The approach is more advisable as the applicants may stand a better chance to argue their case before a new examiner with a fresh set of eyes.
Additionally, the amended regulations broaden the purview of re-examination to encompass not only the rejection of a patent application but also the identification of “any other obvious non-compliance with relevant provisions of the Patent Law and these regulations”. This modification will allow the CNIPA to exercise stronger oversight over patent re-examination procedures and to elevate the overall quality of the granted patents.
Conclusion
The revised regulations have been hotly anticipated since the promulgation of the Fourth Amendment to China’s Patent Law. The adjustments to the various CNIPA practices and the harmonization with the Hague Agreement are very welcome as they will make China more appealing to the international IP community.
Author: Wang Rui, First published by IAM