On December 21, 2023, the China State Council issued Implementing Regulations of the Patent Law (Regulations) with an effective date of January 20, 2024. These Regulations complete legislative efforts on changes to the patent system introduced by the 4th amendment to the Patent Law that was promulgated four years ago, including harmonization of patent procedures with major jurisdictions in the world, and specific rules regarding joining international treaty(s). This article provides an overview of key changes to the Regulations that are potentially relevant to foreign applicants.
Abolition of 15-day rule
Similar to what happened to EPO (see our article), the grace period of 15 days, under which the date of receipt of any official communication from the China National Intellectual Property Administration (CNIPA) is deemed to be 15 days from the date of dispatch of the communication, will be abolished if the Chinese patent application is filed by electronic means. In practice, most patent applications filed in China are filed electronically, and this abolition means a shortened response period for any office action. However, one advantage of the new arrangement is that it simplifies and harmonizes the calculation of CNIPA deadlines.
Protection of Partial Design
The 4th amendment to the Patent Law makes it possible for the first time to protect a partial design by a Chinese design patent and, on this basis, the Regulations provide detailed rules on how the partial design should be represented. In particular, the part of an article to be protected must be indicated by a combination of dotted and solid lines or by other means. In addition, the part for which protection is sought must be indicated in the brief description, unless it is indicated in the view of the whole product by a combination of dotted and solid lines.
The requirement of solid and dotted lines in the representation of the partial design marks a significant step in the Chinese design registration system in harmonizing with the corresponding systems in other major jurisdictions such as the EU, the UK and the US. Foreign applicants will no longer need to remove dashed or dotted lines from the representations when extending a foreign design application to China. In addition, there will be much more certainty as to the coverage of a priority claim to a foreign application that includes partial designs represented by dotted lines, so that the partial design and any disclaimed portion of the article in the foreign application could be recognized in China with respect to the subsequently filed Chinese design patent application.
With the promulgation of the 4th Amendment to Patent Law, applicants for design patents now have the ability to file in China via the Hague Agreement Concerning the International Registration of Industrial Designs. The Regulations further set out some details of making an application under the Hague Agreement. In particular, an international application for a design for which the date of international registration has been fixed in accordance with the Hague Agreement and which designates China is deemed to be a domestic application for a design patent filed with the CNIPA, and that the date of such international registration is deemed to be the filing date of the domestic application. After the International Bureau publishes the international application for a design, the CNIPA examines the international application for a design, and if there is no reason found for rejection after examination, the CNIPA makes a decision on granting the design patent. Whether the design patent is granted or not, the CNIPA notifies the International Bureau of the examination decision.
It is expected that foreign applicants will find the Hague system a more attractive option for obtaining international design protection now that China is part of the Agreement (see also our previous article). The availability of partial design as introduced above will further enhance the predictability and validity of Chinese design patents obtained through the Hague system.
Domestic Priority Claim between Invention / Utility Model and Design
In the past, it was possible to claim the priority of a foreign patent application or utility model application in a Chinese design patent application on the basis of Article 4 of the Paris Convention. However, for domestic priority claims, there was no provision in the law for a design patent application to claim the benefit of an earlier invention or utility model patent application. The Regulations now clarify that it is possible for a later Chinese design patent application to claim priority from an earlier Chinese invention/utility model patent application, based on the drawings in the earlier Chinese invention/utility model patent application. Such an arrangement will allow foreign applicants to decide on a more effective patent filing strategy in China, e.g. filing a first invention/utility model application in China for the purpose of obtaining a foreign filing license from China, while preserving the option of filing a later design patent application in China for the invention. It should be noted that, unlike the other two types of patent applications, if a later Chinese design patent application claims priority from an earlier Chinese invention/utility model patent application, the earlier application will not be deemed abandoned. However, if the earlier invention/utility model application is granted or claims priority from another application, it cannot be used as a basis for claiming priority by a later design patent application.
Addition or correction of priority claim
In line with the UK, EP and US patent laws, the Regulations now allow the addition or correction of a priority claim after the filing of the Chinese application, and a request to do so must be made within 4 months from the filing of the application or 16 months from the filing date of the earlier application, whichever is later. However, another requirement for making the request is that "the applicant has claimed priority", the exact meaning of which is not clear. For example, does it mean that if by accident no priority claim is made at all when the Chinese application is filed, then the applicant cannot request the addition of a priority claim? We hope that the CNIPA will provide more detailed guidelines on this in the future.
Restoration of Priority Right
The Regulations provide that if an applicant fails to file a Chinese invention/utility model patent application within the 12 months from the priority date, he or she may apply for the restoration of the priority date within 2 months after the end of 12-month period, provided that a justifiable reason can be provided. This is the first time in China that the Patent Office will accept a late filed patent application that still could enjoy a priority claim, and the 14-month period is now in line with other major jurisdictions such as the EP, UK and US. However, the criteria for requesting the reason include "justified reasons", and it is certainly not clear enough what level of fault of the applicant will be accepted, e.g. "unintentional", "despite all due care", or others.
Incorporating Content of a Priority Application by Reference
The Regulations provide that if any part of the specification or claim(s) of a Chinese invention/utility model application is inadvertently omitted or erroneously filed, but the application contains a priority claim of an earlier-filed application that existed on the filing date of the application, the correct content for the inadvertently omitted or erroneously filed part of the specification or claim(s) may be filed within two months from the filing date by incorporation by reference of the earlier-filed application. Such a remedy for inadvertent omission of content has long been provided by the US, EPO and UK patent laws, and it is reassuring to see that China is finally offering the same to applicants. Incorporation by reference can be particularly useful where a Chinese translation of a foreign priority application contains errors or content that was omitted in the translation at the time of filing, and the content of the priority application can now be used to correct the errors or omissions in the Chinese specification or claim(s).
It is now possible for a Chinese patent to be endorsed with an "open license", meaning that the patent holder agrees to license its patent to anyone who asks. The new system is therefore similar to the “license of right” in jurisdictions such as Germany and the United Kingdom. When making a declaration for an open license, the patentee will have to specify terms of loyalty and the duration of the license, just as in a normal patent license. This differs from the UK and German systems where the royalty is subject to normal commercial negotiation between the patentee and the licensee.
Furthermore, the 4th Amendment to the Patent Law provides that the annuity for a patent under an open license may be reduced or waived, but the Regulations do not yet contain specific guidelines as to how the annuity may be reduced or waived, so patentees may wish to wait and see whether the details will be released through further administrative regulations by the CNIPA.
Rewards and Renumerations for Inventors / Designers
Compared to previous versions, the Regulations now increase the minimum reward to an inventor for an invention patent from RMB 3,000 to RMB 4,000, and the minimum reward for a utility model or design patent from RMB 1,000 to RMB 1,500, provided that the employer and the inventor/designer have not previously agreed on the reward. In addition, in case the employer has not stipulated the remuneration in its internal regulations or entered into a contract with the inventor/designer of a patent, the Law on Promotion of Transformation of Scientific and Technological Achievements (which sets a much higher remuneration standard as compared to the Regulations) will come into play. Therefore, it is always advisable for employers to include IP remuneration and reward clauses in the employment contract or any other binding contract with the inventor/designer.
Patent Term Adjustment and Patent Term Extension
The 4th amendment to the Patent Law introduced the Patent Term Adjustment (PTA) for unreasonable delay during the prosecution of a patent, and the Patent Term Extension (PTE) for time lost due to delays caused by the regulatory approval process. The Regulations now further explain how to calculate the days of PTA, which is the number of days between the date of grant of the patent and the date on which the patent has been filed for more than four years and substantive examination has commenced for more than three years, but less the number of days of "reasonable delays" and "delays caused by the applicant". Reasonable delays include any delay caused by a dispute over ownership of the patent application and any delay caused by re-examination proceedings. Applicant-caused delays include failure to respond to Office actions within the original time limits, deferred examination, and incorporation by reference to a priority application.
On the other hand, for the PTE there are certain limitations to the request of the compensation. In particular, if a new drug is covered by a number of patents at the same time, the patentee may only request that compensation for the term of the patent right be granted for one of the patents. Likewise, where a patent involves several new drugs at the same time, a request for patent term compensation can only be made in respect of one new drug in respect of that patent. The term of PTE shall be determined in accordance with the number of intervening days between the filing date of the patent application and the date on which the new drug is granted marketing approval in China, minus five years.
For more information about the Regulations, please don't hesitate to contact your usual attorney at Marks & Clerk, or any one of our attorneys.