Compared to 2008, the year 2009 was a relatively quiet although still busy year for intellectual property in China. The Third Amendment to the Patent Law took effect on October 1, 2009, in the year’s most significant development. Many IP-related laws, regulations and judicial interpretations were revised during 2009, but few were finalised.
Third Amendment: patents
On October 1, 2009, the Third Amendment to the Chinese Patent Law took effect.
The new law requires that the Implementing Regulations and Guidelines for Examination are also revised. The drafting process began in 2008. Numerous drafts of the Implementing Regulations were made available to the public for consultation. A draft version of the Guidelines for Examination was also published in 2009, which was proposed in one of the draft versions of the Implementing Regulations. However, by the time the new Patent Law took effect, the Implementing Regulations had not been approved by the State Council. So the Guidelines of Examination could not be finalised by the State Intellectual Property Office (SIPO). The new Implementing Regulations were finally approved at the end of 2009 and published in January 2010, and came into force on February 1, 2010. The Guidelines for Examination were published shortly after the new Implementing Regulations and came into force on the same day.
On a practical level, the lack of detailed regulations between October 1, 2009 and February 1, 2010 made prosecution at the SIPO difficult for both practitioners and examiners.
For example, one of the most significant changes in the Patent Law affects design patents and the Implementing Regulations are supposed to set out requirements for application documents. Specifically, multiple similar designs for the same product are allowed to be put in a single application. However, there is no clear provision in the Implementing Regulations that defines when designs are similar. Such a definition was proposed in earlier draft versions, but was not present in the final regulations. The new Patent Law also prescribes that a design application must include a brief description of drawings, unlike in the old provision in which this was optional. In addition, the brief description should be used to determine the scope of design patents.
Some draft versions of the Implementing Regulations prescribed what should be included in the brief description, notably the distinguishing features of the present design from the prior art design. This would have been dangerous if passed, as it leaves little room for patent owners and attorneys in future litigation to interpret the protection scope of the design. Fortunately, the final version only requires that key design features should feature in the brief description.
The Patent Law also significantly changes the patentability standard for designs. Firstly, an ‘absolute novelty’ standard is adopted. Secondly, the concept of conflicting applications now extends to design patents. In addition, an inventive step-like standard is added, which prescribes that a design application should be different from prior a design or combination of features in a prior design.
The Guidelines for Examination are supposed to outline how the patentability standard for design is practised. However, since the Implementing Regulations were not finalised in 2009, only the previous Guidelines for Examination could be used. In a draft version of the Guidelines, extensive changes were made to the relevant section. However, as there was a gap between the effectiveness of the Patent Law and that of the Guidelines, it will be interesting to follow any litigation over the validity of a design patent filed before the Guidelines took effect.
Besides the changes to design patents, the new law prescribes that the direct source and the original source of the genetic resource shall be indicated in a patent application. If the applicant cannot provide original source, it must give reasons. This provision is designed to protect China’s genetic resources. Furthermore, the law prescribes that if an invention relies on certain genetic resources that were acquired or used illegally, the patent application will be rejected. It is worth noting that disclosing genetic sources is not part of the sufficiency requirement for a valid patent. Instead, the Implementing Regulations prescribed that applicants will complete forms, which are not part of the original disclosure.
The new Patent Law abandoned the so-called ‘first filing requirement’, which means for inventions made in China, it is no longer necessary to file the first patent application in the country. However, for multinational companies that have operations in China, this does not necessarily mean more flexibility. According to the law, although the applicant could choose to first file outside of China, it must disclose its technical solution to the SIPO for security examination before filing overseas. In addition, the new law says that if an applicant violates this provision, it will not get a Chinese patent.
Other revisions incorporated in the new law include strengthening the enforcement system and new provisions on compulsory licensing, Bolar exceptions and others. The details of the draft Implementing Regulations are still being finalised and read by the State Council.
It is interesting that the SIPO began implementing some of the draft provisions, such as the requirement for a brief description in design applications, disclosure of genetic resources and security examination, before the new Implementing Regulations came into effect, simply because it would not work otherwise.
Third Amendment: trademarks
The Third Amendment to the Trademark Law has been in development for years. Many draft versions have been made available to the public. However, compared with the revision of the Patent Law, progress on trademarks has been much slower. This is partially due to the fact that the Chinese Trademark Law is less compatible with other major jurisdictions than the Patent Law. It is thought that the Third Amendment will increase compatibility.
On a positive note, in 2009, the prosecution time for trademark applications was reduced from three years to 19 months. The Chinese Trademark Office (CTMO) aims to shorten the examination time to 12 months in 2010.
There were also discussions during the year about resuming the trademark agent qualifying examination. Since 2001, the trademark system has suffered from the abolishment of the qualifying examination. Resumption seems to be inevitable.
Pfizer’s Viagra patent litigation finally ended in 2009. On May 31, 2009, the Patent Re-examination Board (PRB) held that the patent was valid. The appeal period had expired, meaning the PRB’s decision was final. This decision was made almost one year after the oral hearing in the case.
The Viagra litigation lasted several years. The proceedings at the PRB were part of the second round of litigation. In the first round, 13 Chinese generic companies attacked the validity of the Viagra patent at the PRB in order to apply for the FDA’s approval to produce generic versions of Viagra. Then the PRB’s decision at the time determined that Pfizer’s Viagra patent was invalid based on insufficiency. But this decision was overturned at the Beijing No.1 Intermediate Court and again at the Beijing Higher People’s Court. The case was remanded back to the PRB to examine the validity of the Viagra patent based on other grounds that were not addressed in its first decision, such as claim support and inventive step.
The past year has been a busy year for IP legislators and practitioners, although not many laws and regulations were passed. It is very clear that more changes are on the way.