Foreign filing licence
In accordance with the new Chinese patent law, for any invention or utility model made in China, if a patent application in a foreign country is desired, it must pass security examination before filing outside of China. This is similar to the foreign filing licence provisions in the US. The Implementing Regulations further prescribe that the applicant could choose to request a foreign filing licence in three ways: on or after filing a Chinese patent application; by filing a Patent Cooperation Treaty (PCT) application with SIPO; or by filing a separate request for a foreign filing licence without or before filing an application in China.
According to the Implementing Regulations, it may take up to six months for a final decision on the request. According to examiners at SIPO, requests for foreign filing licences filed at the same time as Chinese patent applications take priority and are processed earlier than requests filed through other routes. SIPO intends to issue a notification on foreign filing licence together with the filing receipt, which is available a few days after filing. Such notifications could contain a decision to grant or to deny the foreign filing licence or a note to the applicant that SIPO needs to review the request and the applicant should hold off from filing abroad.
Statistics published on China Intellectual Property News showed that the actual time taken by SIPO to decide on a request for a foreign filing licence is much shorter than that prescribed, with an average of only two weeks. In the past year, nearly 30 thousand requests were processed and 99.83 percent of requests were approved. Sixty percent of applicants chose to request a foreign filing licence at the time of filing Chinese patent applications, of which 90 percent received approval together with the filing receipts. Ninety-three percent of the applicants that seek a foreign filing licence on or after filing patent applications are Chinese, whereas among all separate requests for a foreign filing licence, 75 percent are foreign enterprises. It is interesting to note that where an applicant was notified to hold off from filing abroad, and subsequently was granted approval, SIPO took an average of four weeks from the initial notification to the final decision.
SIPO is one of the biggest and busiest patent offices in the world in terms of the volume of applications it deals with. Hundreds of thousands of patent applications are filed with SIPO every year, including invention, utility model and design patents. SIPO is striving to become a leading patent office in the world, not only in terms of volume of applications, but also in terms of quality and speed of examination. With the implementation of the so-called e-system, examination speed has increased dramatically. Experience shows that for relatively straightforward design patent applications, notice of allowance can be issued in three to four months from the filing date, in comparison with 10 to 12 months in the past. Office actions are also issued sooner than previously for invention applications.
In addition, SIPO aims at improving the quality of patents granted in China and hence seems to have taken the position that a Chinese patent has been relatively easy to get to date, and consequently, the rejection rate should be kept at certain level to prevent too many lower-quality patents from being granted.
This philosophy seems to be reflected in the examiners’ handling of office actions. According to the Guidelines for Examination, examiners should normally issue two office actions before a final rejection ending the prosecution of an application. If an applicant wants to continue prosecution after that rejection, it has to file a re-examination with the Patent Re-examination Board. The Guidelines for Examination also allow examiners to reject an application after issuing a first office action, if the applicant makes no amendment and does not present persuasive arguments.
In the past, if the examiner raised objections to several claims in the first office action and the applicant only made formal changes to the claims, it could still get another chance. However, this practice is no longer possible. Currently, the applicant has to either make substantive changes to the claims or give convincing arguments. Otherwise, the application will be rejected. Recent experience shows that if the applicant does not satisfy the examiner in all the issues raised in the first office action, some examiners choose to reject the application. So applicants are suggested to be prudent in light of this new trend.
Interestingly, certain practices at the State Intellectual Property Office have not changed much in the last year. One of the most frustrating things applicants usually encounter is the ‘new matter’ objection raised by Chinese patent examiners. According to the Guidelines for Examination, any amendment the applicant makes during prosecution of a patent application should not go beyond what is recorded in the original application document, including description, drawings and claims. It is to be noted that the commonly used term ‘original disclosure’ is not used in the guidelines. This means that Chinese practice applies a stricter standard than other countries.
The Guidelines for Examination further elaborate that not going beyond what is recorded in the original description and claims means that the amendment has to be directly and unambiguously determined by a person skilled in the art from the initial description and claims. The applicants are disadvantaged when facing examiners’ objections as no specification is perfectly drafted and examiners could often, if not always, find a way to challenge the uniqueness of the amendment. A typical example is that correcting typos is not always permissible. For example, if 100℃ is mistakenly recorded as 1,000℃ in the description or claims, the applicant is not able to change 1,000℃ to 100℃, even if a person skilled in the art would know that 1,000℃ does not work and is an obvious mistake.
Compared with the relatively lenient and liberal practice in some countries, this is an extremely strict practice and applicants often find that the examiners demand almost exact wording from the description when claims are amended in response to an office action. This practice has been adopted by all examination departments in SIPO and it seems that there is no sign of change in the foreseeable future. Therefore, applicants often find themselves with narrower claims in China than in other countries. However, foreign applicants are not discriminated against as Chinese applicants face the same problem. This may also reflect SIPO’s position that a certain rejection rate should be maintained.
Another hot topic is the prosecution of computer software-related inventions in China. Again, applicants have experienced frustration with Chinese examiners. First of all, computer software, software products, algorithms or computer games are not patentable subject matter per se. Computer-readable media are patentable only if they have physical features. In other words, a claim with a computer-readable product defined by software features is not allowed. It is suggested that these claims are either deleted or rewritten as system or method claims.
A typical wrong notion many foreign practitioner have is that as long as a claim has hardware features in it, it will not encounter a non-patentable subject matter objection. According to Chinese practice, when judging whether a claim is for non-patentable subject matter, the claim is considered as a whole as a solution to a problem. If the solution is regarded as technical, the claim claims a patentable subject matter. The term ‘technical’ is not explicitly defined. However, the Guidelines for Examination prescribe that if a solution involves the execution of computer programs in order to solve technical problems, and uses technical means in conformity with the laws of nature and achieves technical effects in conformity with the laws of nature, it is a technical solution.
But for a solution that is based on man-made rules rather than a law of nature, even if the claim includes hardware or product features, it will still be regarded as non-patentable subject matter. Examples include the use of computer programs to do banking transactions or to compile a music playlist reflecting the user’s taste. These solutions, including but not limited to business methods, are based on man-made rules rather than laws of nature, and hence will be rejected as non-patentable subject matter.
In practice, Chinese examiners have tended to reject such claims on the grounds that they are not technical solutions as defined in Article 2 of the new patent law, rather than using Article 25, which prescribes that mental activities are not patentable. However, this does not change the fact that computer program-related inventions, including but not limited to business methods, remain difficult to patent in China.
The practice at SIPO tends to be strict and it seems that it will remain this way in the foreseeable future.