Focus on China:Successful Preparation and Prosecution

Samson G. YuKangxin Partners, P.C.

Beijing, Chinasamyu@kangxin.com

www.kangxin.com

Development of Patent Filings in ChinaDevelopment of Patent Filings in China

Growth of Patent Applications Received by SIPO

203573252631

308487353807

476264

573178

694153

0

100000

200000

300000

400000

500000

600000

700000

800000

2001 2002 2003 2004 2005 2006 2007

Total

Domestic

Foreign

Patent Applications Received by SIPO in 2007 Total (including domestic and foreign): 694,153 increased by 21.1 ％

- Invention: 245,161 (36.7%) increased by 16.5% filed by Chinese entities: 153,060 increased by 5.1 ％filed by foreign entities: 92,101 increased by 4.5 ％

- Utility Model: 181,324 (28.2%) increased by 12.4 ％ - Design: 267,668 (35.1%) increased by 33.0 ％

Invention

Design

Utility Model

Invention

Utility ModelDesign

Patent Granted by SIPO in 2007

• Granted patents in total: 351,782, increased by 31.3 ％• Patents for invention: 67,948, increased by 17.6 ％• Patents for utility model: 150,036, increased by 39.4 ％• Patents for design: 133,798, increased by 30.5 ％

• Granted patents for foreign entities: 50,150, increased by 13.6 ％ • Granted patents for Chinese entities: 301,632, increased by 34.7 ％

Design

Invention

Utility Model

Invention

Utility ModelDesign

Development of IP Litigation in ChinaDevelopment of IP Litigation in China

Proliferation of IP Litigation in ChinaIncreased averagely yearly by 15% in recent years

0

2000

4000

6000

8000

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12000

14000

16000

18000

2001 2002 2003 2004 2005 2006 2007

AcceptedCasesConcl udedCases

IP Cases Distribution in 2001-2007

Distribution of IP Civil Cases in 1st Instance in 2001-2007

copyright38%

TM14%

patent24%

unfaircompetition

11%

technologycontract

7%

other6%

Foreign-related IP Cases• Chinese court totally ruled 1,646 Foreign-related IP cases in 1st instance in 2001-2007• Increased yearly by 57.96% averagely

0

100

200

300

400

500

600

700

2005 2006 2007

Forei gn-rel atedcases

IP Administrative Cases

– 2003-2007 totally ruled 3,156 IP administrative cases in 1st instance

– Increased by 4.87 times than the case number of 1997-2002

– 2,067 patent cases– 1,015 trademark cases– 83 copyright cases and the other cases

Compensation Significantly Increased in Recent Cases

• Chint Group vs. Schneider– Sep. 29, 2007, in Wenzhou, Zhejiang, involved $81 million in

compensation– Chint Group, a Chinese low-voltage product company won a

n utility model patent infringement lawsuit, Court found Schneider earned $126.2 million by selling five models of devices, which fall in the protected scope of Chint’s patent, from 2004 to 2006, and made a profit of $82 million, which is ruled by court for compensation to Chint Group

• Tuopu vs. Beijing Tailong– Jun. 20, 2006, Henan province, Zhengzhou intermediate cou

rt ruled, Beijing Tailong compensate Tuopu $4.4 million

Methods to Calculate Damages

• Principle of compensation– compensatory rather than punitive– full compensation of damages in IP cases

• Methods of calculation– loss of IP owner– gains of infringer (shifting burden of proof)– referring to royalty (1-3 times in patent

infringements)– statutory damages (around $70,000)

Current Patent System in ChinaCurrent Patent System in China

Patent Prosecution in China

• First File• 18 Months Publish• Substantive Examination Required

Category and Definition of Patents• Patent for Invention

– Any new technical solution relating to a product, a process or improvement thereof

– Examination as to substance is required • Patent for Utility Model

– Any new technical solution relating to the shape, the structure, or their combination of a product

– Preliminary examination only – Search report rendered by SIPO prior to litigation

filed• Patent for Design

– Any new design of the shape, the pattern or their combination, which creates an aesthetic feeling and is fit for industrial application

– Preliminary examination only– Search report rendered by SIPO prior to litigation

filed

Substantive Examination

• Initiated under Request by Applicant• Time Limit for Submission of the

Request– 3 years from the earliest priority date– Deemed withdrawn if request untimely

made or fee no fully paid– Restoration possible if surcharge is paid

within two month from the issued date of the Withdrawn Notice

Patentability Requirements

• Any invention or utility model for which a patent right may be granted must possess novelty, inventiveness, and utility

• Software becomes patentable only when it combines with hardware, or is described as a method (logic flow chart)

• Business method per se is not patentable yet• Source code per se is not a patentable subject

matter• Medium storing computer software is not

patentable• “a computer-readable recording medium

storing a program”

Novelty Requirements

• No identical invention or utility model has been publicly disclosed in publications in China or abroad;

• Or has been publicly used or made known to the public by any other person in China;

• Nor has any other person filed previously with the Chinese Patent Office an application which described the identical invention or utility model and was published after the date of filing.

• Worldwide publication or domestic use

Inventiveness Requirements (1)

• An invention that has prominent substantive features, and represents a notable progress

• Interpretation of “prominent substantive features”–  the invention is non-obvious over the prior art

to a person skilled in the pertinent art;– An invention shall be regarded as obvious or

having no prominent substantive features if it is capable of being made or obtained by means of logical analysis, deduction or experiment

Inventiveness Requirements (2)

• Interpretation of “notable progress”– The invention has a considerable progress

over the closest prior art in the pertinent art

– The considerable progress resides in overcoming drawbacks and shortcomings which are associated with the prior art, or lies in a certain tendency of emerging technology development represented by the invention undergoing the examination; usually, any advantageous effects of the invention are indicative of the notable progress

Utility Requirements

• The invention or utility model can be industrially made or used, and produce effective results

• The invention is industrially applicable, and generates positive effects

Requirements under Art. 26 (3)

• The description shall set forth the invention or utility model in a manner sufficiently clear and complete so as to enable a person skilled in the relevant technology to carry it out– Indefiniteness requirements– Full disclosure requirements – Enablement requirements

Indefiniteness Requirements

• The lack of indispensable technical features– Make sure the technical solution required by the claim

is a complete one and distinguished from the prior art• The use of correct terms

– Many objections, e.g. non-statutory measurement units

– The inconsistence of the terms used in description and claims

– Features in description is missed in drawings or vise verse

• Other issues– A system claim contains a method– The examiner does not understand the invention– The examiner wants to narrow claims but lack of legal

basis

Full Disclosure Requirements

• Support for each element of a claim– Each element of independent claim

should have a full disclosure (computer program of a medical detecting method)

• Convincible technical effects – The technical effects should be

convincible for one skilled in the art– The objections, technical effects, and

advantages of the technical solution required in claims must be disclosed

Enablement Requirements

• The derivation should be given for an equation unless it is commonly known

• A broad claim needs more embodiments to support

• A system claim comprises in its characteristic portion a method

• The advantage of the technical solution sought for protection should have support in description

The Completeness Requirements• Eight portions of the description

– Title of the invention– Technical field of the invention–  Background of the invention–  Summary of the invention

ObjectivesTechnical solutionsAdvantages & technical effects

– Description of drawings– Embodiments

• Title of the InventionTechnical field is narrowly defined

• Background(1) Containing unnecessary prior art or the

background is too long to be logically clear

(2) Containing problems of prior art which cannot be solved by the present invention

• Summary of the InventionAdvantages should be supported by the

description combining the technical features with the technical problem to be solved

Embodiments(1) Too simple or incomplete, unclear technical solution(2) Only one embodiment but a generic concept in claims required(3) Failure to incorporate the prior art, which is helpful to understand the present invention or is necessary(4) Process embodiment without device embodiments which implement this process

AbstractLack of one or more items such as the title of

the invention, the technical field to which the invention pertains, the technical problem, and the principal use or uses of the invention

Claims:(1) An independent claim cannot reach the object or the technical solution is inconsistent with the subject matter required in claims

(2) Independent claim shall require a scope matching with the description, not too narrow or broad(a) the scope shall be the embodiments and all changes

and/or varieties one skilled could reasonably anticipate(b) for an apparatus claim, it would not be defined by f

unction and/or effective features only(3) A dependent claim includes technical features dispensable for reaching its advantages, which renders that the claim is improperly narrowed(4) Data structure, signaling structure or algorithm (5) Functional limitations are not used properly (6) Terms such as “algorithm”, “program”, “commercial method”, “data structure”, “signaling”, “frame (structure)”, or the like appear in claims

Special Requirements for Chemical Inventions

• As an invention of new use of a known compound, experimental evidences need to be given in the description to prove its use and effects– the lack of technical data is insufficiency– supplementary data filed late is not accepted

Cope with Rejections

• In the Original Description– more examples– enough technical data– statement for the mechanism of

the invention• In the Response to Office Action

– legal requirements burden of proof

– filing prior art document– level of the skilled person– mechanism of the invention– filing divisional application

Responding to Office Actions

• Arguments on novelty and inventiveness– Arguments shall focus on the claims with

reference to the prior art, not those only disclosed in specification but not required in the claims

– Attention should be paid at the difference between the present invention and prior art and further, the unexpected technical effects from the difference

– A reference discloses all technical features except for distinguished ones that are disclosed by the other reference

Amendments in Examination

• When to Make Voluntary Amendment:– Substantive Examination Request is

Made– Within 3 Months after Receipt of the

Notification on the Entry into Substantive Examination Stage

• How to Make– may not go beyond the scope of the

original disclosure• After the two occasions, amendments

are allowed only as Required by the Office Action

Allowable Amendments

• Amendments are made on the basis of PCT applications

• Amendments might be directly and undoubtly rendered from the original specification, drawings, and claims

Unallowable Amendments

• Amendments on the basis of priority documents

• Adding a new independent claim which has broader scope than the original one that has been amended in response to office action, while the new claim is supported by the specification

• Deletion of technical feature from an independent claim without suggestions from office action

Amendments After Patent Granted

• Only obvious errors of the SIPO can be corrected at the request of the patentee

• In Reexamination– the scope of claims is not allowed to be

broadened– the class of claims should not change, and – the number of claims should not be increased

• In Invalidation– Scope of claims is not allowed to be enlarged– Addition of any new claim is not allowed– Only deletion and/or combination of claims is

allowed– Technical features in the description are not

allowed to be introduced into claims

Divisional Application

• Time Limited for Filing Divisional Applications:– Within 2 months from date of receipt of the Notice

of Granting the Patent or before the rejection comes into effect

– Applicant is entitled to file divisional application • within three months upon receipt of a rejection

regardless whether or not a Request for Re-examination is filed with the PRB; or

• during the re-examination procedure, or • under judicial review procedure

• Filing a divisional application based on another divisional application on the applicant’s own initiative is restricted

• No new matter is allowed to be introduced

Amending Claims by Disclaimer

• As Required in the Examination Guide, Two Alternative Preconditions are Set for Disclaimer:– Applicant must prove the Invention cannot

be practiced with the “Disclaimed” range, or

– Applicant must prove the invention after excluding the “Disclaimed” range possess novelty and inventiveness over prior art

Double Patenting

• Controversial Views on Double Patenting• COURT: only one patent right can be granted

to one invention for its whole patent life, • SIPO: the identical invention shall not have

multiple co-existing patent rights in valid state

• The last version of Examination Guide confirms partially overlap is not “identical”

• The applicant makes a statement that the previously granted patent is abandoned since the filing date of the previous application

• Strategy• co-file utility model and invention with

different scopes of Claims• file divisional application to overcome the

deficiencies in parent application

Final Rejection

• A rejection would be made after at least two office actions, especially:– If the applicant’s response to the first office

action includes amendments, and/or– Substantives arguments have been provided

in the response

• Applicant’s strategy– Take advantage of the chance in response to

first office actions by amendments and/or arguments

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