Interpretation of and Advice on Revised Draft of Guidelines for Patent Examination (2021.8) (II) 

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.

Priority restoration and incorporation by reference

Incorporation by reference and priority restoration are provisions of the Patent Cooperation Treaty (PCT) concerning priority remedy, to which China makes reservations till now, meaning that such provisions are not applicable in China. These two remedies have been incorporated into the draft revision to the Implementing Rules of the Patent Law – which has not yet taken effect—to stay in step with most countries around the globe.

In accordance with the Paris Convention for the Protection of Industrial Property, the subsequent application claiming priority shall be filed within the period of priority, which normally lasts for 12 months (for both invention patents and utility model patents) or 6 months (for design patents only) from the filing date of the previous application. In China, the application failing to meet such time limit shall otherwise not enjoy the right of priority as well as remedies. The worst consequence of losing priority is that the patent application will not be granted for lacking novelty or inventive step due to the publication of the prior literature in respect to the same invention during the priority period. Revisions include remedies for missing the priority period, providing that the subsequent r application filed with the CNIPA after the expiration of the 12-month or the 6-month priority period is entitled to priority restoration within 2 months from the expiring date of the priority time limit (14 or 8 months from the priority date), which can be regarded as a 2-month grace period for priority. The Draft Revision to the Patent Examination Guidelines adds some operational provisions accordingly, including requiring the applicant to submit a request for restoration of rights with a statement of reason and pay restoration fees.

Although the application missing the priority time limit is entitled to restoration once the revised Implementing Rules of the Patent Law takes effect, the applicant should still pay attention to the monitoring of such time limit because only a 2-month grace period is available to priority. If the time limit of the priority expires due to lacking timely early warning, the subsequent 2-month restoration period will also elapse soon, for which no further remedies are available.  

Incorporation by reference refers to adding the contents of the previous application (i.e. priority) without changing the filing date after filing the subsequent application, including the entire or part of contents of claims and specification. At present, China still makes reservations to incorporation by reference. An applicant who attempts to add the contents of the previous application into the subsequent application shall reset the filing date of the subsequent application to be the date of submitting the supplemented documents, meaning that the filing date of the subsequent application is postponed, which may cause the subsequent application to lose priority due to exceeding the 12-month priority time limit, resulting in the same serious consequence of not being patented.

To keep in line with most other countries, the revised Implementing Rules of the Patent Law recognizes incorporation by reference, entitling the applicant to add the entire or part of claims and specification by reference to the previous application within 2 months from its filing date or a prescribed period of time. Incorporation by reference practically refers to: 1) adding the entire claims or specification, indicating that the claims and/or specification of the previous application are completely excluded from the subsequent application, which is a rare but possible situation. For example, to satisfy the 12-month priority time limit, the applicant only submits claims for the subsequent application and claims priority, without submitting the claims in the official language of the filing country and the specification (translation) due to limited time. Therefore the applicant needs to submit the complete claims and specification; 2) adding part of contents of the claims or specification, possibly as a result of omitting certain contents of claims or specification of the previous application due to translation errors, which is more common than the first circumstance. The omitted parts may be added to the subsequent application by incorporation by reference. In both cases, the applicant does not have to modify the filing date of the subsequent application and therefore need not worry about losing priority.

The Draft Revision to the Patent Examination Guidelines adds corresponding examination rules with respect to incorporation by reference. The examiner mainly examine whether the contents of the application documents added by reference to the previous application documents are included in the copies of the previous application documents and their Chinese translations. If the supplemented claims or specification are not included in the copies of the application documents and their Chinese translations, incorporation by reference will not be permitted and the examiner will request the applicant to correct; if the applicant insists on such incorporation, the filing date shall be reset to be the date of submitting additional documents.

Similar to priority restoration, there is a time limit for incorporation by reference, which is either within 2 months from the filing date of application, or within a fixed period of time specified by the Patent Office. However, even if some contents of the previous application are missing in the subsequent application, examiners are not obliged to check and thus will not notice it. Unless obvious mistakes have been made—for instance, the claims or specification are missing—the Patent Office would not issue an Office Action to request the applicant to make incorporation by reference. It is the applicant who can notice and proactively request to add the missing contents through incorporation by reference. Therefore, in practice, the applicant may check relevant documents after filing the application and timely correct any missing contents or mistakes caused by mistranslation or other factors through incorporation by reference, which offers the applicant a chance of post-event remedy for any mistakes with the application documents as a result of rushing into filing. It is thus recommended that the applicant should set up a reminder of the 2-month time limit for incorporation by reference, re-check relevant documents after filing the application and rectify any omissions or mistakes through incorporation by reference whenever necessary.

Inclusion of an examination on inventive step during preliminary examination on patent applications for utility models

Different from invention patents, a utility model patent may be granted after the preliminary examination, which only involves determination of whether such utility model has novelty and generally does not touch on inventive step. Benefiting to some extent from the absence of an examination on inventive step, a large quantity of utility model patents lacking inventive step are granted. Meanwhile, abuse of patent right by certain patentees has disturbed normal production and commercial activities, and has led the relevant public to equate utility models with low-quality patents.

The Draft Revision to the Patent Examination Guidelines adds the examination on whether the utility model application obviously lacks inventive step. Compared with the substantive examination on invention patents, the examination on inventive step of utility model applications adopts relevantly lower standards, but contributes to a large extent to improving the quality of utility model patents and safeguarding fairness and justice.

Pursuant to Article 22.3 of the Patent Law, criteria for inventive step of invention and utility model patents differ in whether there is any technical inspiration in prior arts. Though being subject to lower standards of inventive step compared with invention patent examination, examination on utility model applications imposes more restrictions on the technical fields and the number of reference documents. Although the Draft Revision to Patent Examination Guidelines does not specify whether reference documents should be searched, and what can be accounted “obviously” lacking inventive step during the preliminary examination on the inventive step of utility model applications, it could be anticipated that examiners tend to reject patent applications for utility models of simple technical solutions, particularly products which are common in everyday life. We cannot rule out the possibility that examiners may search reference documents on their own initiative. Therefore we can expect to see a further increase in Office Actions issued to utility model applications in the preliminary examination stage as well as a prolonged examination period for even more than a year, which will result in a decrease in the rate of granting of utility model applications.

Relevant operations concerning deferred examination

Deferred examination means that the applicant requests to defer the examination on the application for invention or design patent. Revisions concerning deferred examination in the Draft Revision to the Patent Examination Guidelines involve the following three aspects:

i) The period of deferral of design patent examination shall be counted by “month”, rather than by “year” as before like invention patent application. Subsequently, the period of deferral–which used to be 1, 2 or 3 years—is revised to be a maximum of 36 months from the effective date of the request for deferred examination.

ii) Under the present guidelines, the deferral request is irrevocable. The Draft Revision to the Patent Examination Guidelines entitles the applicant to withdraw the request for deferred examination and the application after withdrawal of the deferral request will be examined in order. This gives more flexibility to applicants, who can then determine the timing of starting examination based on the actual situation.

iii) Where an applicant applies for both invention patent and utility model patent in respect of the same invention-creation (one application for two patents) on the same date (the application date only), the examination on the invention patent application corresponding to the granted utility model patent shall be deferred usually for a period of four years. 

As to the revision in the point iii), the following two points need to be clarified in the Guidelines:

(i) Whether a notice of examination deferral will be issued by the Patent Office to the applicant when a deferral decision is made? In our opinion, the applicant should have the right to know the deferral of examination.

(ii) When does the 4-year period of deferral begin, from the filing date of the substantive examination request by the applicant, or the date of issuance of the deferral notice? Pursuant to the Guidelines, the deferral of examination on invention patent can only be initiated when the utility model patent application for the same invention has already been granted. It is thus reasonable to believe that the initiation of examination deferral may be subject to the date of granting of the utility model patent.

In fact, it is not hard for careful applicants to find that in recent years, despite the early granting of the utility model patent, the substantive examination on invention patent application of the same application date is delayed. It could be inferred that the Patent Office has already implemented deferred examination internally. If this revision point is approved, it will surely impose significant impacts on the granting progress of invention patent in such one application for two patents. To be more specific, if the utility model patent of the same application is granted after 1 year from the filing date, whereas the Patent Office decides to defer the examination on the invention patent in the same case for 4 years, it means that the examination on invention patent may begin at the fifth year after filing at the earliest. Considering that the substantial examination will take at least one year, it can be predicted that the invention patent in the one application for two patents can hardly be granted in 6 years after the filing date, and the actual time of granting may be even later.

Given the abovementioned situation, the applicant needs to reconsider whether to adopt the one application for two patents strategy and weigh the potential risks. The applicant adopts the one application for two patents strategy with the initial attention to avoiding double patenting, since the applicant is allowed to abandon the previously granted utility model patent when the invention patent is granted. However, according to our practical experience, claims of the invention application usually need to be revised during substantive examination to satisfy novelty and inventive step requirements for granting. In that case, the double patenting concerns no longer exist since the revised claims of invention patent differ from those of the utility model patent, and there is therefore no need to abandon the utility model patent when the invention patent is granted. Hence we advise the applicant to build up its patent portfolio of utility model and invention patents from different perspectives. For instance, the applicant may file utility model patent for product structure, while invention patent to protect functions, procedures, methods of use and manufacturing methods, etc.. Moreover, the applicant should not file one application for both utility model patent and invention patent on the same day (uncheck the one application for two patents option in the application form) so as to avoid any deferred examination on the invention patent by the Patent Office. By this means, on the one hand, the utility model patent could be granted as soon as possible; on the other, the invention patent could enter into substantive examination without deferral by the Patent Office. Even if the protection scopes of the two patents may overlap by nature, in the course of substantial examination on invention or upon receipt of notice from the Patent Office requesting modification of application to avoid double patenting, the applicant may revise the claims of invention patent to make them different from those of the utility model patent so as to overcome the double patenting problem and get the invention patent granted.