Interpretation of and Advice on the Draft Revision to the Patent Examination Guidelines (2021.8) (I)

Intellectual Property Team, Watson-band

The newly revised Patent Law of the People’s Republic of China (revised in 2020), which came into effect since 1^st June, 2021, has brought with a significant change in the patent system in recent ten years. The newly revised Patent Law has introduced a new system incorporating partial design, patent term compensation, drug patent linkage, open license and punitive damages. Supporting statutes including Implementing Rules of the Patent Law and the Patent Examination Guidelines are still under revision. After seeking public comments on the draft revision to the Implementing Rules of the Patent Law of the People's Republic of China in last December, China National Intellectual Property Administration finally released the Draft Revision to the Patent Examination Guidelines (Draft for Comment) on 3^rd August this year.

The Patent Examination Guidelines sets forth supporting provisions and specific operational approaches for the Patent Law as well as its Implementing Rules. This article will elucidate significant revisions in the guidelines from the operational aspect, and make some advice accordingly.

Note that since the Implementing Rules of the Patent Law (Revised) in support of the Patent Law of the People's Republic of China (Revised in 2020) has not yet been passed, the relevant clauses of the Implementing Rules of the Patent Law referred to in the Draft Revision to the Patent Examination Guidelines and in this article are the ones that have not come into effect.

Examination based on the principle of good faith specified in Article 20 of the Patent Law

Article 20.1 of the Patent Law provides that the principle of good faith shall be followed when filing a patent application and exercising patent right. The patent rights may not be abused to harm the public interests or the lawful rights and interests of others. Article 11 of the Implementing Rules of the Patent Law of the People's Republic of China (Revised) provides that any fabrication, forgery, plagiarism, piece-together or any other misconduct belongs to a violation against Article 20.1 of the Patent Law. To this end, investigations on any obvious violations against the principle of good faith during preliminary examination, substantive examination and examination on request for invalidity declaration respectively have also been included in the draft revision to the Guidelines.

First, in the stage of preliminary examination (on both utility model and invention patent) and substantive examination (on invention patent only), examiners shall examine to decide whether the application has violated the principle of good faith as provided in the Implementing Rules of the Patent Law.

During preliminary examination, a notice will be issued to applicants for response if examiners identify any obvious violations against the principle of good faith. Although what is accounted “obvious” is not specified in the Guidelines, plagiarism and piece-together can be easily identified by virtue of patent Big Data.

During substantive examination, examiners shall read the application documents to identify any circumstances of fabrication and forgery. Some circumstances of violation of the good faith principle are listed in the Guidelines as examples, including fabricating data, technical effect and other technical contents, or realizing simple function via complicated structures which obviously does not comply with the common sense of technical improvement; forging documentary to prove that the grace period of novelty is not lost; plagiarizing or piecing together prior arts or prior designs; submitting multiple pieces of obviously the same application, etc. However, it is understandable to worry that normal applications may also be hurt mistakenly due to subjective judgement regardless of the above circumstances set out in the Guidelines. For instance, an invention by combination is obtained by combining certain known elements of prior arts, meaning that its inventive step lies in ‘combination’ rather than the known elements. This has brought with a problem: How to distinguish ‘combination’ from ‘piece-together’? Decisions based on whether and what effects such ‘combination’ has brought with are inevitably subjective. Therefore it is recommended to further delineate the examination rules in the Guidelines, offer guiding cases on a case by case basis and clarify the circumstance where examiners have the burden of proof, so that applicants have a clear anticipation about how to respond to such examination opinions and what evidence to submit.

Second, the revision has incorporated the violation of the good faith principle into the scope of the examination under authority in patent invalidation examination, meaning that in the event of violation of the good faith principle by the patent, the panel may examine and declare the patent invalid, even if the invalidation applicant has not based its invalidation request on violation of the principle of good faith. The revision demonstrates China’s resolute opposition against untruthful inventions and fraud such as forgery and fabrication, which shall never be granted the patent right.

Therefore, in drafting the patent application documents, applicants should pay attention to avoiding any violations against the principle of good faith as specified in the Guidelines, which has set more requirements for the drafting of patent specification. For instance, specification should provide as much as detailed descriptions on the specific means of implementation; with respect to inventions in chemistry, biology and medications where the identification of technical effect is based on the experiment results, experimental methodologies, measures as well as  detailed experimental data shall be provided, and the experiment records and other process documents should be retained for subsequent submission as evidence; for inventions of improvement over prior patents, it is necessary to describe the improvement points and illustrate the relation between the improvements and the technical effects, to avoid that the patent application is deemed as a fabricated invention without technical effect due to drafting defects.

Participation in the invalidation proceedings by parties to patent dispute cases

Pursuant to the prevailing implementing rules of the Patent Law, patent invalidation declaration proceeding can be suspended due to patent right ownership dispute cases, preservation measures against the patent by the court or upon the request of any party concerned, and be resumed when dispute has been resolved or preservation period has expired. The draft for comment of implementing rules of the Patent Law now disclaims patent right ownership dispute and preservation of patent right as excuses to suspending patent invalidation proceedings. Any party to the patent right ownership dispute can apply to participate in the invalidation proceedings as a third party. In practice, the patent invalidation proceedings won’t be suspended during patent right ownership dispute or patent preservation period. If the patent is declared invalid before the conclusion of the ownership dispute or during the preservation period, it means that the foundation of right for the dispute no longer exists and the court may order to dismiss the case to avoid wasting judicial resources.

Accordingly, the Draft Revision to the Patent Examination Guidelines provides that the party to the patent right ownership dispute is permitted to participate in the patent invalidation proceedings and specifies relevant rules. It also provides that the participation in the patent invalidation proceedings by the party to the patent right ownership dispute is limited to receiving documents only. This means that the interested party only has the right to get informed of the invalidation proceedings, rather than the right of substantial participation in such proceedings (such as filing a statement of opinion). Here the author considers that there may be a possible scenario in which patent right is declared invalid as a result of the omission of the patentee and the failure of the party to the patent right ownership dispute to raise any opinions. Under the circumstances, rights and interests of the party may be jeopardized. Therefore it is proposed to entitle the interested party to substantially participate in the invalidation proceedings as a third party and file a statement of opinion with the panel for its reference.

Applicants for patent right evaluation report

Article 66 of the Patent Law (Revised in 2020) provides that the patentee, pertinent interested party or the alleged infringer to a dispute case concerning utility or design patent may issue a patent right evaluation report on its own initiative.

To this end, the draft revision to the Guidelines also grants the potential alleged infringer (any entity or individual which/who is likely to be an accused infringer) the right to apply for a patent right evaluation report, apart from the patentee and pertinent interested party pursuant to the preexisting Patent Law. However, in accordance with the revision, not every individual seems to be entitled to apply for such report, which is incongruous with ‘any entity or individual can be the applicant for patent right evaluation report’ as provided in the Proposals for Revisions to Implementing Rules of the Patent Law (2020.12) (See Article 56 in Revised Draft for Comment). This disparity can only be clarified after the official issuance of the Implementing Rules.

In accordance with the Draft Revision to the Patent Examination Guidelines, the potential accused infringer applying for a patent right evaluation report shall submit documentary evidence such as a lawyer’s letter, which refers to a letter sent to the potential alleged infringer from the patentee or interested party to request stopping infringement upon its patent right, or other documents proving the existence of the patent infringement. Where the patentee or interested party sends a lawyer's letter to the potential alleged infringer but does not file a patent infringement lawsuit despite reminders from the potential accused infringer, the potential alleged infringer may apply with the CNIPA to issue a patent right evaluation report and submit it in the lawsuit on affirmation of non-infringement.