How to Deal with Procedural Issues Often Encountered by Foreign Applicants for Chinese Patent

Helen Hua Jiang

With China's opening to the outside world and in the process of global economic integration, the Chinese market increasingly appeals to overseas investors. To achieve their competitive edge in the marketplace, more and more foreign enterprises choose to apply for Chinese patent for their latest inventions as part of their long-term market strategy. According to the State Intellectual Property Office's (SIPO's) recent statistics, by the end of this August, the number of patent applications filed by foreign applicants had reached 62,594, representing an increase by 31% as compared with that in the same period of the previous year. To help foreign enterprises and their attorneys correctly understand the major provisions of the Chinese Patent Law, the Implementing Regulations of the Patent Law, and the SIPO's Guidelines for Examination, and familiarise themselves with the practical requirements in the course of patent application, I have written this article to present my personal views and make recommendations concerning some of the issues foreign applicants should pay attention to when appointing Chinese patent agency to prosecute their patent applications.

I. How to Reduce Additional Claim Fees

As Section 1, Chapter Two of Part V of the SIPO's Guidelines for Examination provides, when the claims are in excess of 10, the additional fees are payable for each additional claim. To date, the rate of the fees charged by the SIPO is RMB 150 yuan  (equivalent to $18.10 according to the current foreign exchange rate) for each additional claim starting from the eleventh claim. If there are quite a number of additional claims, the resulting additional application fees, together with the fees payable to the patent agency, would be a considerable sum of money.

According to the current practice of the Chinese Patent Office, the additional claim fees are charged on the basis of calculation of the number of initial claims made in an application at the time of filing. The Patent Office would not increase or refund the part of additional claim fees because of any change in the number of claims during the substantive examination. That is, the applicant does not have to pay for the fees charged for any additional claim, nor can he/it request refund of any paid additional claim fees for any reduced number of claims.

Therefore, at the time of filing an application with the Patent Office according to the Paris Convention, the applicant should reduce the number of claims as many as possible, with enough room made for possible future amendment under Articles 33 and 26 of the Patent Law. The patent agent, on seeing that there are too many claims in the application document filed on the basis of the text of priority, should point to the applicant, and make suggestion concerning, the consequent considerable sum of additional claim fees when preparing the application document.

However, regarding a PCT international application in the national phase in China, the Patent Office calculates and charges the additional claim fees according to the number of the claims disclosed in the pamphlet published internationally; hence, it is impossible for the applicant to reduce the additional fees by filing new claims of a reduced number. In fact, when a PCT application enters the national phase, the applicant may amend the claims in the international phase pursuant to Article 19 of the PCT, or in the phase of international preliminary examination pursuant to Article 34 thereof, and introduce them to the national phase in China as the basis for the substantive examination. He/It may also amend the description and claims of the application pursuant to Article 28 of the PCT, (if the application enters the national phase pursuant to Chapter I of the PCT) or Article 41 of the PCT (if the application enters the national phase pursuant to Chapter II of the PCT). However, these amendments would not free the applicant from the obligation to pay the additional fees for the claims included in the PCT publication. That is to say, in the course of entry into the national phase, the applicant cannot reduce the additional application fees by virtue of amending the claims or reducing the number of claims. For this reason, given the different law provisions likely to be encountered when the claim fees are calculated, the applicant, when drafting the PCT application, should duly limit the number of the original claims if the nature of the invention allows it under the premise of meeting the sufficient disclosure requirement and leaving enough room for future amendment. In the national phase in China, the applicant may take the opportunity allowable under the law to make amendment on his/its own initiative at the time of, or after, entry into the national phase to amend the claims and even the description for the examination to be conducted thereof.

II. Duly Taking Opportunity to Amend Application Document on One's Own Initiative

After an invention application is filed, the applicant is required to file a request for substantive examination within three years from the date of filing (or from the date of priority if the right of priority is claimed). After receiving the applicant's request for substantive examination and accepting it as fulfilling the requirement, the Patent Office will send a Notification of Entry into Substantive Examination, and send the application to the relevant filing section to be substantively examined by the examiners. If the applicant, at the time of filing, also requests substantive examination, the Patent Office will issue the Notification of Disclosure and Entry into Substantive Examination after it finishes the preliminary examination of the application. This means the formal examination of the application is over, and the applicant may expect an office action directed to his/its application from the Patent Office.

In the course of applying for invention patent, the applicant may amend the application documents on his/its own initiative twice pursuant to Article 33 of the Patent Law and Rule 51 of the Implementing Regulations of the Patent Law. The applicant may amend the description and claims within the scope of disclosure contained in the initial application at the time of requesting the substantive examination or within three months from the date of receipt of the Notification of Entry into Substantive Examination (or the Notification of Disclosure and Entry into Substantive Examination). After receiving the amended documents, the Patent Office will conduct the search and examination on the basis of the amended description and claims.

As for an application entering the national phase in China through the PCT route, if the applicant filed amendment as made according to Article 19 or 34 of the PCT in the international phase, he/it may, at the time of entry into the national phase, decide whether to introduce the amendment in the national phase in China to serve as the basis for the examination of the Chinese application. If he/it decides to do so, then he/it is required to submit the Chinese translation of the document of amendment filed in the international phase together with the Chinese translation of the full text of the pamphlet published under the PCT, and indicate in the seventh item of the PCT/CN/501 form that the amendment made under Article 19 or 34 are the basis on which the application will be examined in China.

Besides, in respect of a PCT application, the applicant, in addition to the said two opportunities to make amendments on their own initiative, may, when entering the national phase, amend his/its application document on his/its own initiative pursuant to Article 28 or 41 of the PCT.

If an applicant amends, in the course of application, his/its application document more than once at the points of time allowed under the law, the Patent Office will conduct the substantive examination on the basis of the final amendment.

Making due use of the right for the applicants under the law, drafting high-quality description and claims of the patent applications, referring to the foreign search and examination results of the application, and making full use of the opportunities to amend the description and claims on one's own initiative will reduce the additional application fees, and help shorten the time of examination.

III. Patentability Standards Combining Absolute and Relative Novelty Requirements

In China, the Patent Office adopts the patentability examination standards that combine both the absolute and the relative novelty requirements. Article 22, paragraphs one and two of the Patent Law provides that "any invention or utility model for which patent right may be granted must possess novelty, inventiveness and practical applicability. Novelty means that, before the date of filing, no identical invention or utility model has been publicly disclosed in publications in the country or abroad or has been publicly used or made known to the public by any other means in the country, nor has any other person filed previously with the Patent Administration Department under the State Council an application which described the identical invention or utility model and was published after the said date of filing".

It is thus shown that like other countries and regions, China also adopts the absolute novelty standard for disclosure by publication. An identical technology disclosed in publication in any language in and outside of China prior to the filing date (or from the date of priority if the right of priority is claimed) of a Chinese invention or utility model patent application is a prior art which is detrimental to the novelty of the said China application, and would render the Chinese application not patentable for lack of novelty. On the other hand, China adopts the relative novelty standard for disclosure by way other than publication. An identical technology disclosed prior to the date of filing (date of priority) by way of sale, use or oral account is detrimental to the novelty of the said China application only if the act of disclosure takes place in the territory of China. In other words, someone's identical invention is publicly known by sale, use or otherwise other than publication in a foreign country should not be recited as a prior art detrimental to the novelty of the later China application. The Guidelines for Examination also provide that any technical content disclosed on the date of filing is not deemed to be a prior art.

It is worth noting that Article 24 of the Patent Law enumerates three circumstances of disclosure that are exception to novelty-detrimental disclosure of inventions prior to the date of filing, and for this reason an applicant is given a six-month grace period. According to this Article, "an invention-creation for which a patent is applied for does not lose its novelty where, within six months before the date of filing, one of the following events occurred:
(1) where it was first exhibited at an international exhibition sponsored or recognised by the Chinese government;
(2) where it was first made public at a prescribed academic or technological meeting; or
(3) where it was disclosed by any person without the consent of the applicant".
The applicant should file his/its patent application within six months from the date on which one of the said circumstance arises, and declare that the disclosure is not detrimental to the novelty in the Request of the application, and submit relevant proofs within two months from the date of filing at the latest.

However, in practice, few foreign applicants can enjoy the grace period, as an exception to the loss of novelty, under Article 24 of the Patent Law because they seldom provide evidence that meets the restrictive requirement of the Guidelines for Examination for the scope of exhibitions and academic conferences. As is interpreted in Section 5, Chapter Three of Part II of the Guidelines for Examination, exhibitions refer to international exhibitions sponsored, or exhibitions held abroad that are recognised, by the Chinese Government. Most foreign applicants find it difficult to provide evidence showing that an exhibition was sponsored or recognised by the Chinese Government. It is even narrowly interpreted in the Guidelines for Examination that the "stipulated academic meetings" refer to "academic or technical meetings sponsored by the relevant competent department under the State Council or a national academic society or organisation". These are the circumstances that are substantially not applicable to foreign applicants. For that matter, they should be cautions in handling matters of disclosure prior to the date of filing (or date of priority). Some applications for which exception of the loss of novelty may be requested in the home country, other countries or regions possibly do not meet the requirement for the grace period in China. But, since China adopts the relative novelty standard for "disclosure by ways other than publication", some acts of prior disclosure do not affect the novelty of these applications in China. As a case in point, an exhibit on display at an exhibition in a foreign country does not constitute a prior art, so it is not necessary to request exception to the loss of novelty in the application filed in China. In other words, under some circumstances where it is necessary to request exception to the loss of novelty in a foreign country, to be it is not necessary to do so in China for the acts of disclosure do not affect novelty.

As for the matter of novelty, Article 22 of the Patent Law has set forth express provision on the effect of conflicting applications. Where a person files an application for patent (application A) for an identical invention-creation, with its date of filing prior to that (the date of priority) of the applicant's Chinese application (application B) and its date of disclosure later than the date of disclosure of application B, application A is a conflicting application detrimental to the novelty of application B. If the said application A is a PCT application whose date of filing is prior to that of application B, only after the PCT application of application A has entered into the national phase in China and been published by the Patent Office does it become a conflicting application detrimental to the novelty of application B. In other words, if the PCT application of application A does not enter into the national phase in China within the time limit provided for in the PCT, it does to come to effect in China, and the international publication of application A does not constitute a conflicting application, nor does it affect the novelty of application B.

A conflicting application is taken account of in the evaluation of the novelty of later application, without any effect on its inventiveness.

IV. Filing of Divisional Application and Time to File It

Article 31, paragraph one of the Patent Law provides that "an application for a patent for invention or utility model shall be limited to one invention or utility model. Two or more inventions or utility models belonging to a single general inventive concept may be filed as one application". Rule 35 of the Implementing Regulations of the Patent Law and the Guidelines for Examination of the Patent Office have interpreted, in more detail and in more specific terms, the principle of examination of unity. The examiners of the Patent Office are strict in their application of the requirement of unity of patent applications. For this reason, it is often the case that some claims have to be deleted and divisional application filed therefor as required by the examiners in the application proceedings. Besides, some applicants file, as is made necessary by their overall patent strategy, divisional applications on their own initiative even if the unity of their applications are not challenged.

Under Rules 42 and 43 of the Implementing Regulations of the Patent Law, an applicant may file a divisional application any time before the grant of the patent, or within two months from the date of receipt of notification of the grant at the latest. When considering filing a divisional application, an applicant should draw his/its attention to the following matters:

1. He/it should not change the class of application when filing divisional application. It is possible in some countries or regions (e.g. the Taiwan region) to change an invention into utility model patent application when it is difficult to obtain the invention patent, or vise versa. Different law provisions are set forth in the Mainland. Only a divisional invention patent application is permitted to be filed on the basis of a mother invention patent application, or only a divisional utility model patent application is permitted to be filed on the basis of a mother utility model patent application.

2. The applicant of a divisional application must be also the applicant of the mother application. In case of change in the name of the applicant caused by assignment, it is necessary to submit an assignment certificate signed by both the applicant of the mother application and the applicant of the divisional application. In case of change in the names of the applicants caused by change of name or merger or otherwise, it is necessary to submit documents certified by a notary office that prove the change of name.

3. Where a mother application is grant the patent and two months has passed after the grant, the mother application is rejected and the rejection takes effect, or the mother application has been withdrawn on the initiative of the applicant or is deemed to have been withdrawn and has not been restored, no divisional application should be filed. If an applicant receives a rejection notification, he/it may file a divisional application within three months from the date of receipt of the notification no matter whether he/it requests the Patent Reexamination Board (PRB) for reexamination or not.

4. Whether a divisional application can be filed during the reexamination remains an issue of debate. If the patent is eventually granted after the reexamination proceedings, the applicant files a divisional application during the reexamination, that is, after three months from receive of a rejection notification. The divisional application is deemed to meet the time requirement set forth in Rule 42 of the Implementing Regulations of the Patent Law, and it is acceptable to the Patent Office. However, where the reexamination proceedings ends with a rejection decision being upheld, the ways the Patent Office treats the matter are not consistent: after the rejection is upheld in the reexamination, the divisional application is deemed to be filed after three months from the date of receipt of the rejection decision; hence it is deemed not to have been filed. Whether a divisional application may be filed in the process of court hearings after the applicant brings an administrative action in the people's court out of dissatisfaction with the PRB's decision to have upheld the rejection is not expressly provided for in the law. In the practice, however, the examiners of the Patent Office will not deal with the divisional application until the court renders its judgement in the administrative lawsuit. If the court decides to uphold the PRB's rejection decision, the Patent Office will notify that the divisional decision is deemed not to have been filed on the account that, after the rejection is upheld after the reexamination and the administrative lawsuit, the rejection decision is retroactive to the date on which the three-month period starting from the issuance of the rejection notification expires, and that a divisional application filed after the expiration fails to meet the requirement set forth in Rule 42 of the Implementing Regulations of the Patent Law; hence it should be not accepted. This writer takes a different view in this regard. As a matter of fat, the provision of Rule 42 of the Implementing Regulations of the Patent Law that "where an application for patent has been rejected, withdrawn or is deemed to have been withdrawn, no divisional application may be filed" should be construed as a provision regarding the legal status of the mother application when the applicant files a divisional application. Whatever happens to the mother application should not affect the examination of the divisional application derived from it. After the applicant requests reexamination, the application is under examination, and the rejection decision should not be deemed to have taken effect. For this reason, the applicant has the right to file a divisional application under the law. The result of the reexamination to uphold the rejection is a conclusion made regarding the mother application. There is no reason for it to be retroactive and to have an effect on an existing divisional application. This narrow reasoning is contrary to the intended legislative purpose. It is believed that will be attached importance to this issue and addressed in the discussions on the amendment of the Guidelines for Examination. However, given this factor of uncertainty, applicants who consider filing divisional applications are advised to do so within the three-months time limit starting from the date of grant.

5. The divisional application in China differs from the partial continuation/follow-up application in the United States in that the former is filed only within the scope of disclosure contained in the original application, without addition of any new content to it. The divisional application enjoys the same date of priority and date of filing as those of its mother application. A divisional application may be filed out of an initially-filed mother application, and, as well, out of another divisional application, as long as it is filed in the time provided for in Rule 42 of the Implementing Regulations of the Patent Law.

By filing a divisional application, an applicant may also miss the aforesaid opportunity to make amendment on his/its own initiative, and it is also necessary to introduce a remedial measure to make such amendments.

According to the principles set forth in the Paris Convention, foreigners filing patent applications in China are entitled to the same treatment as the Chinese nationals. In the course of substantive examination of patent applications, foreign enterprises and persons are subject to exactly the same standards as the Chinese entities and citizens. But, due to the special characteristics of their own, they will run into issues, such as right of foreign priority and assignment, that should be specially addressed when going through the formalities. Their internalisation of the Chinese Patent Law and some of its practical requirements is highly necessary for them to work out a sound patent strategy and acquire enforceable patent rights.

The author: Attorney-at-law and patent attorney for the China Patent Agent (H.K.) Ltd.