In 2001, China experienced the second amendment of Patent Law and its Rules and Regulations for Implementation to provide more meaningful protection of intellectual property rights in China. Like many other events that occurred in China, the industry of China’s patent developed rapidly during each passing day since 2001’s Patent Law and its Rules and Regulations for Implementation was brought into effect. I would like to take this opportunity to provide you with a brief introduction of the current status of the industry of China’s patent since 2001.
I. Summary of Patent Application
1． Summary of Patent Application
(1) Summary of Patent Application in 2007
China’s patent applications have witnessed a rapid growth in recent years. Indeed, in the year 2007, the State Intellectual Property Office of People’s Republic of China (SIPO) accepted a total of 694,153 patent applications including inventions, utility models and designs, which represents an increase of 21.1% over the 573,178 patent applications accepted during the corresponding period of last year (2006). Among these, there were 586,734 domestic applications accounting for 84.5% of the total, which increased by 24.7% to 470,342 of the corresponding period of last year; There are 107,419 foreign applications accounting for 15.5% of the total, with an increase of 4.5% to 102,836 of the corresponding period of last year.
Among the three types of patent applications accepted in 2007, there were 245,161 invention applications with an increase of 16.5% to 210,490 of the corresponding period of last year. Among the invention applications accepted in 2007, there were 153,060 domestic applications accounting for 62.4% of the total invention applications with an increase of 25.1% compared with 122,318 of the corresponding period of the year before and there were 92,101 foreign applications accounting for 37.6% of the total invention applications with an increase of 4.5% compared with 88,172 of the corresponding period of last year. There were 181,324 utility model applications with an increase of 12.4% compared with 161,366 of the corresponding period of last year, and there were 267,688 design applications with an increase of 33.0% compared with 201,322 of the corresponding period of last year.
There are several characteristics of the patent applications in 2007 which are listed as follows: First, the numbers of all three types of patent applications continue to grow rapidly and have increased by 21.1% over last year. Second, the patent applications for inventions are mainly domestic applications whose increase rate is much higher than foreign originated applications. In 2007, the proportion of invention applications was 62.4% while that of foreign applications was 37.6%, and the former was nearly 25% higher than the latter; domestic patent applications for invention increased 25.1% over f the year before while foreign patent applications for invention increased 4.5%, and the former is nearly 21% higher than the latter. Third, the role that enterprises play in innovation has been revealed. Among the patent applications for invention in 2007, 48.3% were from enterprises with an increase of 2.1% compared with that of last year. Patent applications filed by domestic enterprises maintained over 80% of all the domestic employee’s patent applications.
Among the three types of patent applications accepted in 2007, there were 380,260 employee’s applications with an increase of 25.4% to 303,174 of the corresponding period of the year before while there were 313,893 non-employee’s applications, with an increase of 16.3% compared with 270,004 of the corresponding period of last year.
2. Summary of Applications During the Past Years
According to the overall statistic over recent years, until December 31, 2007, SIPO had accepted 4,028,520 patent applications of the three types, and among which, there were 3,314,591 domestic applications, 82.3% of the total applications and 713,929 foreign applications, 17.7% of the total applications. The numbers of the patent applications for inventions, utility models, and designs were 1,334,676, 1,471,191 and 1,222,653, respectively, and the percentages of the total applications were 33.1%, 36.5% and 30.4%, respectively.
Over a longer view, the numbers are even more amazing. As of December 2007, the total number of patent applications accepted surpassed 4 million. From the implementation of Patent Law in1985 to the beginning of 2000, it took nearly 15 years for the number of patent applications to reach the first 1 million. However, it took only four years and two months to reach the second 1 million, and two years and 3 months to reach the third 1 million and now only 1 year and 6 months to reach the fourth 1 million.
Compared to the first three increments of 1 million, the fourth 1 million shows the main characteristics in the following two aspects besides its rapid growth. The first is the increase in the percentage of domestic applications. The second is the steady increase of employee’s applications.
First, the proportion of domestic applications for invention has increased rapidly. Among the first three 1 millions, the percentages of domestic applications for invention are 47.8%, 50.7% and 53.4%, respectively. However, the percentage of domestic applications reaches 60.8% in the fourth 1 million. According to the particular year, the percentage of domestic invention applications gradually increased each year. The number of domestic invention applications made up 58% of total domestic applications in 2006, and this percentage rose to 63% in 2007. Among the patent applications for inventions accepted in China, the increasing rate of domestic applications was apparently higher than foreign applications.
Second, the proportion of employee’s applications has increased steadily. Among the first three 1 millions, the percentage of employee’s applications were 41.8%, 49.5% and 52.4%, respectively, while among the fourth 1 million, the percentage of employee’s applications reached 53.9%. A factor in this change is the increased proportion of domestic employee’s applications.
(3) Interpretation of the Information about Patent Applications
The three types of patent applications and granted patents sustained a rapid growth, which on one hand indicated that with vigorous propulsion of construction of national innovation system, independent innovation of domestic innovation bodies was active, and public awareness of patent protection was obviously strengthened. The positive trend of the increasing patent applications of domestic invention reflected the level of China’s continuous improvement of independent innovation and a certain increase in technical content of inventions. In 2007, the percentage of patent applications by domestic enterprises surpassed 80% of all the domestic employee’s applications, which demonstrated that our domestic enterprises are paying more and more attention to the protection of new achievements in independent innovation by legal means and their dominant position of independent innovation has further strengthened.
On the other hand, the patent applications in our country filed by foreign enterprises maintain a rapid growth and the increasing speed of some foreign countries’ applications is higher than domestic applications. This indicates that China’s socialist market economic system is maturing day by day, and the patent protection environment is further perfected, which have proved to be a strong appeal to foreign enterprises.
However, the quality of China’s patents is at a lower level and the combination with the market is still far from adequate, especially reflected in the number of patents contained in per unit of import and export sum in import and export trade. According to the latest statistics, the number of EU patent applications in EU export trade into China is 22.1 per 100 million USD while in China’s export to Europe the number of EU patent application is only 0.5100 million USD.
(4) Summary on Accepted PCT International Application
According to statistics, as the international patent application receiving office of Patent Cooperation Treaty (PCT), in 2007, SIPO has accepted a total of 5,401 PCT international patent applications, with an increase of 41.2% to the corresponding period of the year before; Of these, there are 5,221 domestic-originated international patent applications accounting for 96.7% of the total while there are 180 international patent applications from abroad, accounting for 3.4% of the total. Thus, PCT international patent applications filed in China maintain rapid growth.
Eastern coastal areas with developed economics in China including Guangdong, Beijing, Shanghai etc. are the main source of PCT applications in China. In 2007, Guangdong filed 2,646 applications, accounting for more than a half of all applications in China, ranking first; Beijing ranked second with 560 applications; Shanghai, Taiwan and Hong Kong’s PCT applications were 385, 270 and 246, respectively, ranking third to fifth, respectively. In addition, the number of PCT applications in Jiangsu, Zhejiang, Fujian and Liaoning Province also surpassed 100. 90% of the domestic PCT applications from the areas mentioned above and obviously from coastal area in distribution.
Enterprises are the principal resource of China’s PCT applications. Among the accepted domestic PCT applications in 2007, the applications by enterprises accounted for 70% of the total. Of these, HUAWEI filed 1,544 PCT applications and ZTE Corporation filed 430 PCT applications, ranking the top two, which indicated these leading domestic leading technology enterprises, such as HUAWEI and ZTE Corporation, have strengthened the international layout of patents.
China's PCT applications in technological fields are more concentrated. The applications in electrical fields comprise more than half of the total. Among them, the majority are related to electronic communication technologies, which indicated that this field is the most active area in technological innovation in China and some domestic enterprises have already obtained certain capability of independent innovation.
Among the accepted foreign PCT applications in 2007, most of them are from world-renowned international corporations. More and more foreign PCT applications designated State Intellectual Property Office as its receiving office, one reason is that part of research and development (R&D) activities of foreign enterprises have been transferred into mainland China and reflects that with the continuous improvement in comprehensive ability of the patent examination, the international influence of State Intellectual Property Office has gradually increased.
2．Summary of Patent Applications by Domestic Enterprises and Individuals
As mentioned above, the patent applications for inventions accepted in China both from home and abroad in 2007 maintained a tendency to grow, but the number of domestic invention patent applications increased significantly more rapidly than those abroad. In the early 1990s, the domestic invention patent applications accepted in China accounted for 40% of the total. In 2003 this percentage increased to 50%, and in 2007, this percentage exceeded 60%. This shows that China’s ability of independent innovation has been continuously enhanced and the quality of patent applications has been further upgraded.
Enterprises are becoming the main body of technological innovation, and awareness of creation and protection of intellectual property of enterprises has been significantly enhanced. In 2007, under the condition of steady rapid growth in China’s patent applications, structural changes have taken place in the types of patent applicants. Employee’s applications account for 70% of the domestic invention patent applications and invention patent applications of domestic enterprises has increased 29.1% compared with the corresponding period of the year before. The number of PCT applications rose dramatically to 5,401 with an increase of 38.1% compared with the corresponding period of the year before.
Among the three types of employee’s patent applications accepted in 2007, there are 276,107 domestic employee’s applications with an increase of 35.6% compared with 203,566 of the corresponding period of the year before and accounting for 47.1% of domestic applications. Among the domestic employee’s applications, there are 223,478 enterprises’ applications with an increase of 33.9% compared with 166,874 of the corresponding period of the year before, and accounting for 80.9% of the domestic employee’s applications. There are 32,680 applications from universities and colleges, with an increase of 42.4% compared with 22,950 of the corresponding period of the year before, and accounting for 11.8% of domestic employee’s applications. There are 14,119 applications from scientific research institutions, with an increase of 42.9% compared with 9,878 of the corresponding period of the year before, and accounting for 5.1% of domestic employee’s applications. There are 5,830 applications from state government offices, with an increase of 50.9% compared with 3,864 of the corresponding period of the year before, and accounting for 2.1% of domestic employee’s applications.
Among the invention patent applications accepted in 2007, there are 107,664 domestic employee’s applications with an increase of 32.1% compared with 81,485 of the corresponding period of the year before, accounting for 70.3% of all domestic applications for invention patent. Among the domestic employee’s applications for invention patent, there are 73,893 applications from enterprises with an increase of 30.9% compared with 56,455 of the corresponding period of the year before, accounting for 68.6% of the domestic applications for invention patent and accounting for 33.1% of all the three types of applications filed by domestic enterprises.
The proportion of employee’s applications in domestic patent applications has further increased. The percentage of domestic employee’s applications of the three types of patent applications is 47.1%, of which the percentage of employee’s invention patent applications is 70.3%, with an increase of 3.8% and 3.7%, respectively.
In recent years, besides the rapid increase of patent applications by domestic enterprises and individuals, the following major characteristics have been indicated as well.
First, the percentage of domestic applications for invention patent has rapidly increased. Among the first three 1 millions, the percentages of domestic invention applications were 47.8%, 50.7% and 53.4%, respectively, while in the fourth 1 million, the percentage of domestic applications reached 60.8%. Thus, among the invention patent applications accepted in our country, it is apparent that domestic invention applications grew significantly more rapidly than foreign invention applications.
Second, the patent applications are mainly comprised of designs and utility models, which contain relatively low technology content.
3．Summary of Patent Applications by Foreign Enterprises
It is increasingly obvious that foreign enterprises are competing in the Chinese market through intellectual property rights. Foreign enterprises’ patent applications in China are mainly invention applications that focus on high-tech fields including the field of radio transmission, mobile communications, television systems, semiconductors, genetic engineering, etc., They all have very obvious advantages in these areas and have gained the monopolistic status in some high-tech fields.
As for the number of applications, with the gradual growth in domestic applications for inventions in recent years, the State Intellectual Property Office has accepted more and more foreign applications for invention with a rapid increase. According to statistics from the State Intellectual Property Office, among the top 10 countries in quantity of patent applications in China in 2005, Japan and the United States ranked the top two with 36,221 and 20,395 applications, respectively. This represents a year-on-year increase of 19% and 26%, respectively. The applications from Korea, ranking the third, the Netherlands ranking the fifth and Italy the eighth, have increased by almost 40%. In 2007, the number of foreign applications for inventions increased from 88,172 in 2006 up to 92,107. Patent applications from foreign enterprises also increased rapidly, which indicated from one aspect that foreign enterprises have confidence in China's intellectual property system and have attached significant importance in the Chinese market.
In addition, there were 104,153 foreign employee’s applications, with an increase of 4.6% compared with 99,608 of the corresponding period of the year before and accounting for 97.0% of all foreign applications. This illustrates foreign enterprises’ attention to the Chinese market.
II. The Status of Patent Examination in China
1．Summary of Patent Examination
Information construction has made significant progress. On August 1, 2007, China's electronic patent examination and granting system successfully commenced; The test system of China's patent searching and service platform was built and began operation on April 26 last year, and its users’ needs have been completed; data cleaning and data processing were started in full scale and they launched and implemented 15 data processing projects including the China's Patents’ elementary data processing, further data processing, code conversion of China's patent specifications, and English translation of China's patent abstract; Information infrastructure construction has been strengthened and 15 projects of informational standard-setting work have been carried out; the Government website has completed the third revision, which further improved the patent search services and increased access speed.
The major development goal of patent work in the "11th Five-Year Plan" period was to maintain the appropriate examination period. We should rationally determine the patent examination period and examination tasks according to the growth of patent applications and development of patent examination capacity, together with the consideration of actual needs of the society. It is expected that during the period of the "11th Five-Year Plan", the applications for inventions, utility models and designs, these three patent applications will surpass more than 3.4 million, the invention patent applications of which will reach more than 1.4 million. By 2010, the goal is to keep the actual examination period of invention patent applications to approximately 24 months; utility model and design patent applications to approximately six months, the period of patent re-examination and invalidation cases to approximately 12 months. In the "11th Five-Year Plan" period, at least 700,000 invention patent application examinations should be finished, 890,000 utility model applications, 1,090,000 design applications, and 41,000 patent re-examinations and invalidations will be finished.
WIPO announced the data of international patent applications filed according to the "Patent Cooperation Treaty” in 2007 on February 21, 2008. In 2007 the number of applications reached a record high of 156,100. Northeast Asian countries enjoyed the highest growth rate in four consecutive years, accounting for 25.8% of the total quantity of international applications and South Korea and China consolidated their positions in top ten.
According to the report of the United Nations website, Mr. Idris, WIPO Director-General, said that it has attracted wide attention that northeastern Asian countries have achieved the increase of patent applications and the share in global patent activities. And this proved that the world innovation pattern has been transferred. He pointed out, "[i]t is very encouraging to see that there is clear evidence to show that the countries in this region can be handy to use the international patent system as a tool to stimulate business activity and economic growth."
Compared with 2006, the number of South Korea’s applications in 2007 was over 7,000 with a growth rate of 18.8% compared with the year before. South Korea’s applications in 2007 were more than that of France, and became the fourth-largest original dependent country of "Patent Cooperation Treaty". China's applications were over 5,400 with an increase of 38.1%, becoming the seventh largest original dependent country in place of the Netherlands. United States (over 52,000 applications), Japan (over 27,000 applications) and Germany (over 18,000 applications) continued to maintain the top three positions.
According to applicants of specific patent applications, Matsushita of Japan (2,100 applications) surpassed Philips of the Netherlands (2,041 applications) and ranked the first. Siemens of Germany (1,644 applications) maintained the third place. China's Huawei Company jumped to the fourth place with 1,365 applications.
WIPO denoted that more and more applicants are filing applications via electronic means. In 2007, more than half (53%) of the applications were filed by electronic means. Another 15% were filed by a combination of electronic means and paper documents, and the remaining 32% were still completely filed by paper documents.
2．Summary of Quantity of Granted Applications
(1) Summary of Quantity of Granted Applications in 2007
Patent examination and granting capability has been improved even further, and patent examination and granting work has exceeded the plan. There are a total of 475,000 patent applications of the three types that have been examined and determined, with an increase of 25.3% compared with the year before.
In 2007, State Intellectual Property Office granted 351,782 patent rights, with an increase of 31.3% compared with 268,002 rights granted during the same period of the year before. Indeed, 301,632 granted patents were domestic patents, with an increase of 34.7% compared with 223,860 patents during the same period of the year before; there were 50,150 foreign patents granted, with an increase of 13.6% compared with 44,142 during the same period of the year before. Moreover, among the granted patents were 182,340 employee’s patents, with an increase of 34.5% compared with 135,597 of the same period of the year before; there were 169,442 non-employee’s patents with an increase of 28.0% compared with 132,405 during the same period of the year before. Of the three types of patents, there were 67,948 invention patents, with an increase of 17.6% compared with 57,786 during the same period of the year before; there were 150,036 utility model patents with an increase of 39.4% compared with 107,655 during the corresponding period of the year before; there were 133,798 design patents with an increase of 30.5% compared with 102,561 during the same period of the year before. The proportion of the three types of patents in total granted applications were 19.3%, 42.7% and 38.0% respectively.
The main characteristics of the patent granting in 2007 are as follows: First, the three types of patents continue to increase greatly. In 2007, three types of granted patents increased 31.3% compared with the corresponding period of the year before, and the growth rate is 6.1% higher than the 25.2% of the year before. Second, the growth rate of domestic invention patents that have been granted was higher than that of foreign-originated patents. Among the granted invention patents in 2007, there were 31,945 domestic patents, accounting for 47.0% of the total number of invention patents, which is an increase of 27.4% compared with the corresponding period of the year before; there were 36,003 foreign patents, accounting for 53.0% of the total number of invention patents, which is an increase of 10.1% compared with of the corresponding period of the year before. Domestic growth rate was 17 percentage points higher than that of foreign, and the gap between the quantity of domestic and foreign granted patents became closer.
(2) Summary of Granted Patent Quantity over Each Year
By December 31, 2007, State Intellectual Property Office had granted 2,089,286 patents in total. Among these, there were 1,790,379 domestic granted patents and 298,907 foreign granted patents, which accounted for 85.7% and 14.3% of the total respectively; The quantity of patents were 364,451 invention patents, 988,264 utility models and 736,571 designs, respectively, and regarding the proportion of the total number, they are 17.4%, 47.3% and 35.3% respectively. According to the latest statistics, the vast majority applications of utility models were filed by domestic applicants, and the application of design took up higher proportion of domestic applicants than the foreign applicants.
In addition, in 2007 4,833 PCT international application searches were performed with an increase of 52.8% compared with the corresponding period of the year before.
The statistics recited above indicate that China's ability of the patent examination and granting process gradually improved and the patent examination and granting speed is accelerated. Applications and granting of domestic invention patents showed a sound development of growth, which indicates the continuous improvement of independent innovation ability of China and a certain increase in technology content of inventions and innovations.
(3) Summary of the Maintenance of Granted Patents
According to statistics released by State Intellectual Property Office of P.R.C., by the end of 2007, China had more than 850,000 valid patents, and when compared with that number in 2006, shows an increase of nearly 17%. Among these 850,000 patents, domestic patents accounted for more than 70% of the total. However, what should be pointed out is that despite the substantial growth in quantity of valid patents, the growth is mostly in the utility models and design patents. Since domestic applicants in utility models and designs occupy the dominant position, the granted patents that have been increased are mostly obtained by domestic applicants. The present data shows that though the quantity of domestic patents is large, the domestic patents maintain a shorter life expectancy and the quality needs to be improved. A new statistical analysis shows that among patents applied for and granted in China, when its survival period, also known as life-cycle is 10 years, the number of Chinese patents are 44.1%, while foreign patents are 83%, which is approximately double, and when the period is 20 years, Chinese patents comprise only 2.5%, while foreign patents comprises 17.8%, which is approximately seven times that of China. This is mainly because the patents of our country mainly focus on utility models and designs, and because the quality of domestic invention patents is not relatively as high as that of foreign patents and market-oriented applications are relatively insufficient.
3．Summary of Patent Examination and Granting Period
Since the implementation of the Patent Law on April 1, 1985, the number of Chinese patent applications has been growing year by year. By December 31, 2007, SIPO had accepted 4,028,520 patent applications in total. Because of the rapid growth in patent applications and the relative lack of examination capacity, the filings caused a comparatively serious backlog during the period around 2000. At that time, it would take four or five years from substantive examination to issuance. It proved to be an obvious contradiction between inadequate capacity and rapid growth of the applications. In recent years, SIPO has been taking various effective measures to improve the quality of patent examination and shorten the period of patent examination and granting, and it has achieved remarkable results. It was especially reflected in the substantial increase in the number of staff and the improvement of office automation and efficiency. Through these measures, SIPO patent examination capacity was significantly increased, the examination period was significantly shortened, and the speed of the patent examination showed a trend to accelerate. As for the period of substantive examination, starting from the year 2005, SIPO had surpassed the United States Patent and Trademark Office and became the patent examination office with the world's shortest average examination period. By 2006, the average period of invention patent examination has decreased from 53 months in 2001 to 22 months in 2006. This was a significant result, and the period for utility models is now shortened to 9 months while the design examination period was shortened to 6 months.
4. Summary of Patent Examination Quality Management
In recent years, with the large increase of the patent applications and the number of examiners, State Intellectual Property Office has put it into an important position to further strengthen the patent examination quality management. Over the past three years, State Intellectual Property Office has established a comprehensive administration system to manage the examination quality, developed a quality management system including substantive examination, preliminary examination and PCT examination. It also established a three-level quality management mechanism, including office quality supervision group, departmental quality supervision groups and divisional quality supervision groups. These have initially formed an all-scopes, whole-process and multi-level quality management system. This evaluation system of examination quality has been basically set up.
The Main Working Points of State Intellectual Property Office pointed out that patent examination quality administration should focus on such entities as patent search and examination, vigorously strengthen the supervision of the entities in the examination process and the quality control of the examination results. Initially establish quality evaluation system with whole-process and multi-level, with particular emphasis on the building of the external feedback system. Another focus is to build the paperless application source distribution administration system with the process optimization as an opportunity, and develop a patent business administration index system covering all the examination process. Furthermore, it is deemed important to constantly monitor the examination mechanism, and establish a precise, systematic and standardized examination control system. In addition, another area of emphasis is to establish a linked mechanism in which academic research, interpretation and revision of the standards, quality administration, personnel training and other links in the patent examination interaction, to promote the coordinated development of all works.
On the specific implementation, the work points mentioned above had been carried out well in the past year, and the quality system for the patent examination has been established and carried out. State Intellectual Property Office controls the examination quality of the departments through mark points; this brought great pressure on every substantive examination department. With the same method, the departments evaluate each subordinate section’s work and this also brought great pressure on the examiners. This system worked out very well. This year, the quality administration system will strengthen the examination and control to the case-review and the invalidation of the Patent Reexamination Board, and fully integrate the work into its overall quality administration system.
At present, China’s patent examination system has become a more complete quality administration system, basically guaranteed the promotion of the examination quality and the ability of patent examination. Mr. Tian Lipu, the president of State Intellectual Property Office believes that in future, the patent examination in China should make more efforts in the following four aspects to narrow the gap between China and the developed countries. China’s patent examination should take improving investigation quality as the main working goal and strengthen the cooperation and communication with the patent examination offices in main countries and regions in the world with the accordance of the rapid growth of scientific and technological development and the continuous emergence of new technology fields. The overall scale of the staff grows rapidly, and should further enhance the overall quality. With the accelerating pace of informational work, especially this year, the patent electronic examination and granting system and the Chinese patent search and service platform will be both put into trial operation, which will greatly improve the level of informational work, but it still needs to be enhanced. The international cooperation and exchange has been expanded, but the international influence should be further expanded. Furthermore, SIPO should continue to strengthen the tracking and research on the international issues involved intellectual property, and cultivate a group of high-quality for international exchange and cooperation, to adapt themselves to the new requirements of international cooperation under new situation.
According to the “11
th Five-Year Plan”, we should enhance the quality of patent examination. Comprehensively improve the quality of patent examination, process management and PCT international search and preliminary examination. On the basis of realizing the control of patent examination process, improve the stability of granting work and the social satisfaction. By the year of 2010, have the quality of the patent examination meet or exceed the level of the advanced Intellectual Property offices in the end of 2004.
5．Summary of Patent Examination Standards
On the standards of patent examination, with the exception of the utility models and designs that require no substantive examination, it is difficult to compare with the western countries and determine which is stricter in the standards of patent examination (or as grant standards) in the process of substantive examination. The examination standards are based on the guidelines of examination, the current version of the Guideline was implemented in June 1, 2006. In addition, there is an internal standard - the operating rules of examination, to be implemented soon. As for the latter, since it has not yet been passed, I will not give comments for the moment. On the announced guidelines of examination with legal binding force to both examiners and the party concerned, its standard and the standard of EPO are the same in many aspects. The main reason leading to this is that China has imitated the major European examination standards. Of an individual country, it was mostly affected by the practice of Germany, which directly linked to the special role of German patent system in the establishment of the patent system in China.
On the policy level, these standards are mainly embodied in the standards of novelty and inventive step.
On the judgment of novelty, China can make direct replacement according to technical means to expand the application scope of novelty, while Europe and the United States usually take the inventive step to evaluate the direct replacement of the usual means, which is relatively conservative on this issue. To determine the standard is outstandingly reflected in the evaluation standard of the inventive step. According to the guidelines of examination, the inventive step refers to prominent substantive feature and significant progress. The prominent substantive feature according to the rules refers to non-obviousness. Besides this, it further requests the significant progress, and from point of view of the laws and regulations, it is stricter. However, in the actual operation, once if there is non-obviousness, then it will be cognized of the inventive step, so actually the two have no substantive difference.
As for the examination standards, although the United States did not deny the standard of the inventive step of "teaching - suggestion - motivation" in the KSR International Co. v. Teleflex Inc. case in 2007, it rejected the rigid application of this standard. This judgment was an objection to over-objective criteria of the examination standard of the inventive step, at the same time it raised the standard of inventive step. As for the standard of inventive step, the judges of European Patent Courts held that the standard adopted by the United States Supreme Court in this case was identical to European standards. Thus we can conclude that there is no substantive difference between Chinese standard and that of Europe and the United States.
On the ratio of granting, it is also difficult to find any substantive differences between their standards.
When determining whether an application can be granted or not, this mainly related to the tendency of national policy, I will not give further analysis. It should be examined more strictly in its examination process, for example, China’s examination to storage device will be slightly stricter when handling Article 20 Item 1 and Article 21 Item 2.
III. The Examination Capacity of SIPO
1. Examiners and Their Training
(1) The Number and Constitution of Examiners
The scale of recruitment and the staff structure should be scientifically and rationally determined in accordance with the increase of patent applications, the needs of examination and the current allocation situation of human resource. An appropriate higher percentage of staff with social working experiences, professional and comprehensive knowledge, or high degree should be employed. By the last years of “the 11th five year plan”, there would be a total of more than 4,000 patent examiners (including Examination Assistance Centre); there will be 220 staff in examination of utility models and the process administration; there will be 150 staff in examination of designs and the process administration; there will be 350 staff in preliminary examination and the process administration; The staff will approach 400 in Patent Reexamination Board in charge of examination, request response and process administration. Correspondingly increase the number of staff for informational work, comprehensive management, document information, administration, business management and other relevant work. Rationally and stably allocate and develop employees of examiner assistants.
State Intellectual Property Office has been enlarging the number of examiners by the annual rate of 300-500 staff in recent years. During 2001-2006, all together 1385 examiners were employed. In 2006 only, 535 examiners were employed in all fields, which made the number of registered staff 2170 at the end of the year.
The organizing structure and staff numbers: examination-related departments in SIPO: the number of staff in preliminary examination department and in process administration is over 310, over 340 in the electric department, 180 in pharmacy & biology department, 326 in opt-electrical technology department, 210 in mechanical department, 265 in communication department, 172 in chemistry department, 270 in material project department, 123 in design department, 183 in utility model department; over 1300 in Examination Cooperation Centre, and 320 in the Reexamination Board. There may be some differences in the statistics of the exact number. With regard to the size of human resource, State Intellectual Property Office of PRC has become the third largest patent office in the world following the United States Patent and Trademark Office and the European Patent Office.
(2) The Methods and Content of Examiner Training
As the number of examiners increases, SIPO has been attaching more and more importance to the training of its promising staff. SIPO formulated
The Guidance to the Education and Training of Patent Talents at the end of 2005. The guidance provides training plans specific to different posts and trainings for examiners of each field and type are divided into five phases namely freshman training, post training, advanced training, continuing education and extended training. Each training phase is also divided into several modules. A relatively standardized curriculum syllabus and teaching materials with over a million words have been formed to improve the quality of training.
SIPO strengthened the training for examiners. By making the education and training system more standardized, institutionalized and rationalized, the comprehensive ability of examiners and the efficiency of each individual examiner are improved. Meanwhile, SIPO energetically carries out researches and explorations on the integration of human resources, and works diligently to make a better use of the capacity and examination ability of the human resources.
Training mechanism: a 4-month comprehensive training after admitted into the office and then internal training specifically after allocated into different departments. Periodic trainings are also held by the office or the committee at times.
2. Electrical Assisting Systems for Patent Granting
SIPO has carried out research and practices to optimize the procedures of patent granting, to further strengthen and improve the paperless process administration and construction of the assisting examination system, to perfect the searching system, to improve the conditions of office automation, and to develop a more advanced searching system and database, so that these improvements will enrich and improve the searching means for examiners and thus further enhance the examiners’ capacity and efficiency and shorten the examination period and improve the examination efficiency.
According to SIPO’s "11th Five-Year" plan on informational construction, SIPO will conduct adaptability adjustment and optimization design on the electronic patent granting process, establish a new China electronic patent examination and granting system covering patent applications, process management, examination, announcement, reexamination, invalidation, inquiry, administration and statistics, which is an electronic patent granting system of united, integrated business processes that is based on all coded documents. This patent examination and granting system will enable the whole legal process from filing a patent application to invalidation of patent rights become an electronic and network process covering all the process and omnidirectional work.
At present, SIPO possesses the following searching system: EPOQUE, cprs, paj, cnki, and etc. In addition, all the examiners have been equipped with powerful, superior large-screen LCD computer. Introductions of the searching systems are as follows:
EPOQUE: This searching system is an English searching system introduced from European Patent Office by SIPO, which now is the main tool for examiners to search for foreign patent reference documents in daily work. In this system, there are a total of 22 databases, and of which EPODOC database is an abstract database. EPODOC database is an internal database established by European Patent Office, and has embodied 54,773,788 documents so far. The patent documents with a summary include EP patent documents since 1978, WO patent documents since 1978 and the U.S. patent documents since 1970, British patent documents since 1920, German patent documents since 1969, French patent documents since 1971, Swiss patent documents since 1971 and Chinese patent documents since 1987.
PAJ: English Patent Abstract of Japan (PAJ) data searching system. From March 31, 1999, the Industrial Property Digital Library (IPDL) of Japan Patent Office (JPO) began to provide public with free services via the Internet to enable public to search and access Japanese industrial property documents conveniently and effectively. Recently, JPO decided to improve and increase the services: it simplified the data input pattern of Examination Decision Gazette (Reexamination Decision Gazette by JPO Reexamination Board) database; It changed the searching engine of English Patent Abstract of Japan (PAJ) (from the original N-GRAM mode to WORD-GRAM mode); It added the new computer software database (CSDB) searching. The above improvements and added service has been in use since March 24, 2003, and the inquiry email regarding the use of IPDL of JPO is
helpdesk@ipdl.jpo.go.jp . English Patent Abstract of Japan (PAJ) has recorded the English descriptive entry, English abstract and main figures of the specifications of Japanese patent applications that have been publicized but not examined since 1976.
CPRS: China's Patent Reference System, including all of China’s patent reference data of three types since 1985 and all the specifications of inventions and utility models since 1985.
CNKI: China National Knowledge Infrastructure, a database of Chinese full-text journals and is currently the world's largest Chinese full-text journals database with a continuous dynamic update system, containing more than 8,200 kinds of important domestic journals mainly on academic, technical, policy guidance, popular science and higher education, meanwhile including some fundamental education, mass popular science, mass culture and literary works covering natural sciences, engineering and technology, agriculture, philosophy, medical science, humanities, social science and other fields. The documents in full text are more than 22 million articles from more than 8,200 kinds of China's domestic comprehensive periodicals and professional journals with the full text.
3. About the Attempt to Authorized Examination and Granting System
This system effectively strengthened the examination capacity of SIPO. SIPO established a cooperation assisting centre for patent examination in May 2001. The centre is commissioned by SIPO to take the charge of a number of services including substantive examination of part of the patent applications, and provide enterprises with technical and legal advisory services related to patent application and protection and thus further speed up the patent examination and granting.
By the end of 2007, there had been 1,300 examiners in this center and its overall examination number had reached 40% of the total examined applications of SIPO. In addition, the center is also responsible for external patent-search and issuing search reports.
IV. Summary of China’s Patent Reexamination and Invalidation Cases
1．Summary of Reexamination Cases
(1) The Number of Accepted Reexamination Cases and concluded cases
Since 2002, the cases accepted and concluded by Patent Reexamination Board are as follows:
Year 2002: 961 cases, 785 of which were concluded;
Year 2003: 1,813 cases, 1,235 of which were concluded;
Year 2004: 2,768 cases, 1,447 of which were concluded;
Year 2005: 3,230 cases, 1,576 of which were concluded;
Year 2006: 2,894 cases, 2,663 of which were concluded; and
Year 2007: 2,562 cases, 3,514 of which were concluded.
From the above data, we can see a large increase in re-examination cases between year 2002 and year 2005, but from year 2005, we find a stable fallback in the number of the cases. It is expected that the number of re-examination cases will be kept approximately 2000 to 3000 in the next two to three years, and this is an enormous number. On the contrary, the number of concluded cases is increasing year by year rapidly, especially in the recent two years, the reasons of which are related to the substantial increase of examiners as well as the restriction control on reexamination cases in the past two years.
(2) Review Period of Reexamination
As for the examination period of reexamination cases, because there was a large increase of staff in Patent Reexamination Board, until the end of year 2007, there have been more than 300 full-time examiners while there were only 60 full-time examiners at the end of year 2002. And at present, case examination period has been taken into consideration as an important indicator to control, thus the period of examining and concluding a reexamination case is tending to decrease year by year, which is increasingly welcomed by requesters. At present, for most re-examination cases, usually a collegial bench will be set up within three months since the receipt of the Pre-examination Opinion Notification, and most cases can be concluded within one year after the collegial bench is set up. It can be anticipated that the examination period can be further shortened with the gradual increase in the staff of Patent Re-examination Board and with the improvement of individual examination capacity of the examiners.
2．Summary of Invalidation Lawsuits
(1) The Number of Accepted and Concluded Invalidation Cases
Since 2002, the invalidation cases accepted and concluded by Patent Reexamination Board are as follows:
Year 2002: 1,752 cases, 1,402 of which were concluded;
Year 2003: 1,813 cases, 1,617 of which were concluded;
Year 2004: 1,904 cases, 1,667 of which were concluded;
Year 2005: 2,087 cases, 1,643 of which were concluded;
Year 2006: 2,468 cases, 2,022 of which were concluded; and
Year 2007: 2,183 cases, 2,522 of which were concluded.
From the above data, we can see a large gradual increase in invalidation cases between year 2002 and year 2006, but we find a fallback in last year. It is expected that the number of invalidation cases will remain 2000 to 3000 in the next two to three years, and this is an enormous number. The number of concluded cases is increasing year by year rapidly, especially in the past two years, and in 2007 it was the first time that the number of concluded cases surpassed that of the accepted cases, which made a reverse and better condition for case backlogs. One reason for this phenomenon is related to the substantial increase in the number of examiners as well as the period restriction control on invalidation cases in the past two years.
(2) Review Period of Invalidation Cases
With respect to the examination period of invalidation cases, since the staff in Patent Re-examination Board substantially increased recently and case examination period has been taken into consideration as an important indicator, the period of examining and concluding invalidation cases show the tendency to decrease year by year, which is welcomed by requesters. At present, for most re-examination cases, usually a collegial bench will be set up within 3 months, and most cases can be concluded within nine months after the collegial bench is set up. The aim of Patent Re-examination Board this year is that most invalidation cases are concluded within six months after collegial bench is set up, which is a difficult task. However, it can be anticipated that the examination period will be further shortened.
(3) The Features Emerged in Invalidation Case Examinations
A few years ago, there was a relatively high increase in patent invalidation requests by foreign enterprises or individuals (mainly enterprises) to invalidate domestic and international patents, but during the two years since 2005, the requests remained generally the same.
At present, there are several features in invalidation cases as follows:
① Foreign enterprises and individuals as requesters who request invalidation mostly aim at invention patents which require high level technology but less often aim at utility models which require lower skills.
② Those cases with foreign enterprises and individuals as the requested party of invalidation are mostly involved with invention patents, which proves to be a positive link to the phenomenon that foreign enterprises and individuals apply more invention patents than utility model patents in China.
③ There has been a phenomenon that both parties are foreign enterprises and individuals engaged in invalidation case, which shows the trust of the two parties in the China invalidation system.
④ Since in some cases in China, some foreign enterprises and individuals instituted invalidation requests in the name of domestic individuals and businesses instead of their own, actually there are more invalidation cases concerned with foreign enterprises as requesters than shown on the current statistics.
V. The Status of China’s Administrative Litigation Cases of Patent Re-examination and Invalidation
1．The Introduction of Re-examination Administrative Litigation
(1) The Number of Accepted Cases
Year 2001: 2 cases for first instance, 1 case for second instance;
Year 2002: 11 cases for first instance, 5 cases for second instance;
Year 2003: 17 cases for first instance, 6 cases for second instance;
Year 2004: 17 cases for first instance, 21 cases for second instance;
Year 2005: 17 cases for first instance, 11 cases for second instance;
Year 2006: 40 cases for first instance, 21 cases for second instance; and
Year 2007: 38 cases for first instance, 20 cases for second instance.
(2) Period of a Case
While there is no accurate data, in recent years the period of a case has been gradually shortened. The first instance can be concluded inferentially in a year prior to 2004 when the time for second instance was slightly shorter and most cases could be completely concluded in half a year in recent two to three years. All these are closely related to the increases of administrative staff in court, the raising skills of the staff in judiciary administrative examination and the change of trial mode on administrative litigation cases of patent reexamination.
(3) Features of Case Hearing
One of the prominent features of administrative litigation cases of reexamination is that the percentage of instituting administrative proceedings is very low. In 2002, Patent Reexamination Board has concluded 785 re-examination cases and in the later years the number increases year by year with the conclusion of 3,514 cases in 2007. Accordingly there were only 11 administrative litigation cases instituted to first instance in year 2002 while there were 38 administrative litigations of first instance submitted in year 2007. So the ratio of the litigation against Patent Re-examination Board ’s decision is very low, and that is to say that the ratio of the decisions made by Patent Re-examination Board ’s decision which are brought into effect is very high.
Another prominent feature of administrative litigation cases of reexamination is that decisions of reexamination are maintained with a rate that exceeds 80 percent. This rate is even higher in chemical, biological, communications and other high-tech fields. The reason, in addition to the high quality of Patent Re-examination Board’s decision, is related to high specialty of reexamination cases, relatively strong technical background of the judges of Re-examination Board that they can more intensively grasp the technical issues while the judges of the court may lack the technical background and may not be able to intensively grasp the technical problems. In addition, there is another reason that is administrative litigation of reexamination case is a typical administrative case in trial of the court. The court in charge of trial is the specific administrative court, which is in strict compliance with the current relevant provisions of the Administrative Procedure Law, to give a great respect and support to the administrative discretion (of Patent Reexamination Board) on the professional problems and issues.
Another feature of administrative litigation cases of reexamination is that its difference in the trial pattern compared with common administrative cases, and that is examination is mainly focused on the objections forwarded by the plaintiff. The main purpose for doing so is to enhance examination efficiency and generally it will not bring harm to the substantive rights of the plaintiffs.
2．Introduction of Administrative Litigation of Invalidation Cases
(1) The Number of Accepted Cases
Year 2001: 31 cases for first instance, 1 case for second instance;
Year 2002: 167 cases for first instance, 46 cases for second instance;
Year 2003: 221 cases for first instance, 100 cases for second instance;
Year 2004: 289 cases for first instance, 216 cases for second instance;
Year 2005: 248 cases for first instance, 196 cases for second instance;
Year 2006: 335 cases for first instance, 218 cases for second instance; and
Year 2007: 478 cases for first instance, 258 cases for second instance.
(2) Period of a Case
Although there is no accurate data, in recent years the period of concluding an invalidation administrative litigation case has been gradually reduced and the time consumed on the case is generally the same to that on reexamination, which is closely related to the increases of administrative staff in court, the improved skills of the staff in judiciary administrative examination and the change of trial mode on administrative examination of invalidation patent cases.
(3) Features of Case Hearing
Compared to reexamination administrative litigation cases, one feature of invalidation administrative litigation cases is the much higher proportion of instituting administrative litigations. In 2002, Patent Re-examination Board has concluded 1,402 invalidation cases and in the later years the number increases year by year with the conclusion of 2,552 in 2007. Accordingly there were 167 administrative litigation cases of first instance instituted in year 2002 while there were 478 administrative litigations of first instance instituted in year 2007. We can reach the conclusion that the percent of the lawsuits against Patent Re-examination Board’s of invalidation decisions is relatively high, approximately a magnitude higher than the percent against reexamination decisions.
Compared to reexamination administrative litigation cases, another feature of invalidation administrative litigation cases is that the rate of maintenance of invalidation decisions is lower than that of re-examination decisions despite the majority of the invalidation decisions are maintained and there should be as much as twice in the rate of revocation of examination decisions. The reasons were related to that invalidation examination decisions are made by Patent Re-examination Board between the two parties opposed in interests, and the evidence involved in invalidation examination is also in large amount. Furthermore, in general, there exists a large gap in the examination ability of the judges in Patent Re-examination Board and that of judges of the court. In addition, it is also related to the fact that a considerable number of invalidation administrative litigation cases are heard by the civil courts in people’s courts with the characteristics of civil litigation trial while paying more attention to the recognition of entities in the issue.
At present, among the administrative litigations instituted against the invalidation examination decisions made by Patent Re-examination Board, nearly half of the cases are heard by the civil courts for trial, and the standard to determine the courts is that the administrative litigations involved with civil tort disputes are conducted by the civil courts for trial, while those without civil tort disputes are conducted by the administrative courts for trial. In fact there are advantages and disadvantages in either court, but it is obviously unreasonable without the same tribunal in accordance with the same rules and standards for a trial. In practice the biggest problem is that the plaintiff of administrative litigations will choose the court when instituting the litigation which also directly leads to the discrepancy in result of trials and brings problems to the plaintiff, the third party and the defendant. This problem has always existed since the implementation of the new patent law in 2001 and only recently have some of its drawbacks appeared. However, it is still difficult to solve this problem within the existing legal framework. Speaking from the origin of the problem, it covers the orientation and construction of the entire mode of patent invalidation examination, and there are many legal obstacles and different opinions between practical and theoretical circles, so it is difficult to solve. For this issue, you can also refer to the following relevant content of the introduction of the third amendment of the patent law concerning the mode of patent invalidation examination.
Another feature of reexamination administrative litigation is its difference in the trial pattern from common administrative cases, which is that examination is only conducted on the objections raised by the plaintiff. The main purpose for doing so is to enhance trial efficiency and generally it will not bring harm to the substantive rights of the plaintiff, which is typical in civil courts in the course of trials.
From the above data, we can see a high increase in the number of invalidation administrative litigation instituted in 2007 compared to that instituted in the past three years. One of the main reasons for this is the substantial reduction in the cost of litigation charged by the court, from the previous 1,000 yuan for each case to 100 yuan for each, to a certain extent, which rouses and increases the enthusiasm of part of domestic parties who are more sensitive about the proceeding costs. Moreover, these people in court trials often do not entrust agents to reduce the costs and the case is usually relatively unfavorable, so the chance for winning the case is very low. It is precisely because of this, there were cries that the current cost of administrative trials is too low, resulting in a waste of patent judicial resource and administrative resource. The fees for courts’ hearings should be increased.
VI. The Status of Litigation Cases of IPR Disputes in China
1．Summary of Litigation Cases of IPR Disputes in China
(1) Summary of the Situation in the Past Five Years
In the past five years, there has been a substantial increase in the number of the conclusions of criminal, civil and administrative litigations concerning intellectual property rights adjudicated by Chinese courts at all levels, reaching 71,633 cases. After the implementation in 2004 of the Legal Interpretation of Laws on Handling Criminal Cases of Intellectual Property Rights Infringement by the Supreme Court and the Supreme People’s Procuratorate, conclusions of the courts at all levels on intellectual property rights infringement cases increased year after year, at an average rate of 22.69% with sentences of 9,656 criminals of intellectual property rights in the past five years. There were a total of 2,962 criminal cases concluded concerning intellectual property rights in the past five years, which is 1.33 times more than that of the previous five years. With cracking down the criminal IPR infringements, we also put more efforts in the cracking down of illegal operation, production and sale of counterfeit goods cases concerning intellectual property crime with the conclusion of 3288 cases in total.
In recent years, the Supreme Court has announced in succession the interpretation of several issues on applicable law concerning the trials of unfair competition cases, computer network copyright dispute cases, violations of new plant varieties, etc. Over the past five years there were 62,218 civil cases of intellectual property rights concluded, with an increase of 1.5 times to that of the previous five years and the objective sum of litigations reaching 13.3 billion yuan, which increased by 70%.
Over the past five years, courts at all levels have concluded 3,165 administrative litigation cases concerning intellectual property rights, with an increase of 4.78 times more than that of the previous five years.
As for the foreign intellectual property rights cases, in recent years with deepness of China's opening to the outside world and the development of international economic and trade relations, foreign intellectual property rights disputes continued to grow substantially and the handling of relevant lawsuits has attracted more attention at home and abroad. During year 2001 to year 2007, there had been a total of 1,634 foreign IPR civil cases of first instance concluded by the regional courts with an average increase of 57.96% which is more than one time higher than the overall increase in intellectual property cases. Among them, there had been 668 cases concluded in 2007 with an increase of 89.24% compared with the year before. However, the foreign intellectual property cases still account for a small percentage of all the cases concerning intellectual property rights, and in the recent years the percentage is only 3%.
Recently, the Supreme People's Court announced
the Regulation on the Causes of Civil Litigation Cases, where "intellectual property rights disputes" was listed in the first level cause, in which marriage and family inheritance, property rights and creditor’s rights are also listed. The first level cause of "intellectual property rights disputes" is followed by three second degree causes including "IPR contract disputes," "IPR ownership and infringement disputes" and "unfair competition, monopoly disputes", and correspondingly set up a total of 33 third level causes and 86 fourth level causes. In addition, in the first level cause of "case causes applicable for special procedures", there have also been three third level causes concerning provisional measures before prosecution of intellectual property rights litigation cases such as "application for infringement termination before prosecution". It is interesting to note that compared with the original
Regulation on the Causes of Civil Litigation Cases (trying out", the new regulation clearly listed the contracts and tort disputes concerning business name (trade names), special indications and the computer network domain into the category of intellectual property rights disputes; listed all the contract disputes concerning intellectual property rights including intellectual property agent contract, the franchise contract for trade and etc. into the category of intellectual property rights contract disputes and listed trade secrets contracts as an individual item; the cases concerning compensation for damage of provisional measures application are listed in the category of intellectual property rights disputes, and disputes confirmed non infringement as a separate category of intellectual property infringement disputes. Considering the close relationship between Anti-unfair Competition Law and the protection of intellectual property rights, and the systematic feature of the Anti-monopoly Law to be implemented and the Anti-unfair Competition Law into consideration, the new regulation collectively prescribed the Anti-monopoly Law dispute and the Anti-unfair Competition Law disputes into the intellectual property rights disputes.
Over the past five years, the Chinese procuratorial organs have intensified efforts to crack down on IPR crimes and strengthened the judicial protection of intellectual property rights. According to the report to the national people’s congress delivered by Jia Chunwang, the Procurator General of Supreme People's Procuratorate in March 2008:
Over the past five years, the procuratorial organs had approved the arrest of 6,339 criminal suspects of counterfeiting registered trademarks, copyright infringement and other infringement of intellectual property rights, and prosecuted 7,448 people.
Over the past five years, the relevant departments in China have investigated and dealt with the various intellectual property rights infringement cases which make up more than 160,000 cases, put more than 8,400 cases on file with the conclusions of more than 7,300 cases. Over the past five years, the Commerce Department coordinating with the relevant departments has organized special rectification in the protection of intellectual property rights, implemented the "IPR Protection Network Project" and established 50 comprehensive report and complaint service centers in the country. They have investigated and dealt with more than 160,000 cases of various infringements of intellectual property rights, put more than 8,400 cases on files with the conclusion of more than 7,300 cases.
(2) Summary of the Status in Year 2006
While the final statistic report of 2007 has not yet been published, the following will be the introduction of the situation of cases concerning intellectual property rights in China in 2006:
In 2006, the region courts accepted a total of 14,219 intellectual property rights litigation cases and concluded 14,056 civil cases of first instance, respectively with an increase of 5.92% and 4.95% compared with the previous year. Among them, there were 3,196 patent cases accepted and 3,227 of them concluded, 2,521 trademark cases accepted and 2,378 of them concluded, 5,719 copyright cases accepted and 5,751 of them concluded, 681 technology contracts cases accepted and 668 of them concluded, 1,256 unfair competition cases accepted and 1,188 of them concluded, and other 846 intellectual property rights cases accepted and 844 cases concluded. They have accepted and handled a total of 2,686 civil IPR cases of second-instance and concluded 2,652 of them, respectively with a decline of 13.74% and 12.07% compared with the previous year. There were 42 retrial cases newly accepted, 3 cases less than the previous year, and 42 cases concluded.
In 2006, with regard to the intellectual property cases concerning overseas and Hong Kong, Macao, and Taiwan, the number of these cases accepted by the courts in China greatly increased. There were 353 foreign intellectual property rights cases of first instance concluded in China with a growth of 52.16% to that of the previous year; 229 intellectual property rights cases of first instance for Hong Kong, Macao and Taiwan concluded with an increase of 34.71% to that of the previous year. In addition, from January to October in 2006, the courts in China accepted and handled 752 civil IPR cases of first-instance concerning enterprises with foreign investment and concluded 447 cases. Among them there were 533 civil IPR cases of first-instance concerning foreign-invested ventures accepted and 308 cases concluded, 219 cases concerning Hong Kong, Macao, Taiwan-invested enterprises accepted and 139 cases concluded. This kind of cases with foreign elements accounts for a considerable proportion.
The people's courts conscientiously fulfilled judicial rehearing function of the cases concerning patent and trademark granting and the administration and law-enforcement cases concerning intellectual property rights, regulated and supervised the executive administration organs’ action according to the laws. In 2006, the region courts newly accepted 1,396 intellectual property rights administrative cases of first instance and concluded 1,436 cases; Among them, there were 458 newly accepted patent cases, with an increase of 36.72% compared with the previous year; 235 trademarks cases, with an increase of 12.44% compared with the previous year; 10 copyright cases, with an decrease of 67.74% compared with the previous year; 690 technical supervision cases, and three other cases.
On the criminal judicial protection of intellectual property rights, in 2006, the region court concluded 2,277 criminal cases concerning intellectual property rights infringement with 3,508 people involved in the judgments that had been in effect, 3,507 people of who were sentenced guilty. In the concluded cases, there were 769 cases concluded as intellectual property rights infringement with 1,212 people involved in final judgments, with an increase of respectively 52.28% and 62.21% to that of the previous year; there were 437 cases concerning crime in production and sale of counterfeit goods (involved with infringement of intellectual property rights) with 766 people involved in final judgments; there were 1,066 cases concerning the crime of illegal operation (concerning infringement of intellectual property rights) with 1,525 people involved in final judgments; and there were 5 cases concerning other violations of intellectual property rights with 5 people involved in final judgments.
2．Summary of IPR Infringement Cases in Beijing
Beijing is the venue that accepts and handles China's intellectual property right disputes with the largest number, the judges at all levels of courts in Beijing have the highest skills in the generally accepted view in China, and it plays a decisive role in the intellectual property judiciary field in China. According to the released information on Beijing Intellectual Property Rights Trial Forum, in 2007 the courts in Beijing handled 2,940 intellectual property rights dispute cases of first instance, with a growth of 10.9% in accepted cases compared with the previous year. Among them, copyright cases accounted for 65% of the total number of cases, competition cases accounted for 5% and the rest are trademark and patent cases. There were 710 intellectual property rights disputes of second-instance of various types accepted and handled by the courts in Beijing, 704 of which were concluded. The numbers of accepted and concluded cases both reached a record highest and there were no cases which surpassed the time restriction for no reason in the whole year, with the rate of conclusion of cases of first instance reaching 92.6%, more than 9,100 judgment documents have been bulletined on the Internet, two intellectual property rights cases were selected into top 10 national intellectual property rights cases publicized by the Supreme Court.
3. The Feature of China’s Patent Infringement Cases
At present, domestic patent infringement cases showed the following major characteristics:
(1) It often combined with patent invalidation disputes. As a litigation strategy, no matter whether it will be successful, the accused infringer typically tends to request invalidation with the Patent Re-examination Board, even if it is unsuccessful, it can also significantly delay the time when it will take the responsibility of patent infringement. Thus, to a certain extent, it brings favor to the infringing parties, impair the power of the patent right protection for the victims, which is not conducive to the resolution against patent infringement.
(2) It lacks intervention of high-level agents. This is related to the lack of the patent attorneys or attorneys-at-law both proficient in patent knowledge and litigation skills as well as with a deep technical background and legal background. It also related to some incorrect ideas of the parties (mainly domestic clients) such as stinting on legal fees, distrusting attorneys and neglecting the function of attorneys. In many cases of practice, the attorneys handled the cases improperly or even made a critical mistake that adversely affected the outcome.
(3) The litigation data shows the trend to increase. At present the courts in different regions have accepted many patent infringement dispute cases with the object of nearly 100 million yuan, which is a great increase compared to that of the past. In October 2007, Wenzhou Intermediate People's Court judged in the first instance that the defendant including the joint venture and product distributors of Schneider, the low-voltage electrical giant in the world, compensate Chint Group for more than 330 million RMB, which is the patent infringement judgment with the largest amount of compensation in China so far (the judgment has not yet been enforced). As for trademark and copyright infringement cases, there has been no such large recovery. Regarding the reasons of the increase of the recovery, besides the growth of extra-value brought by patent technology as a result of the expansion of industry scale, it is also related to the blind claim of the parties of some cases.
(4) There exist many new and difficult problems in the process of recognition of infringement, and the approaches of different venues are not unified. For example, after the request of the plaintiff’s independent claim is declared invalidated, how to deal with the procedures and what influence will be brought in on whether to infringe the dependent claims; recognition standards of abuse of procedural rights and how to regulate the abuse of procedural rights of patentees.
VII. Brief Introduction of the Third Amendment of Chinese Patent Law
1．Changes of Patent Invalidation Reexamination Mode
In the existing system of patent law, the examination mode of patent invalidation is that the invalidation request must be made to the Patent Reexamination Board by a requester, and examined with the patentee and requester as the two parties, and the Patent Reexamination Board examines it between the two parties. This procedure is administrative procedure, and should be applied with respect to the relevant laws (the Patent Law), regulations (Implementation Regulations of Patent Law) and rules (Guidelines of Examination) as the basis for examination. If the decision made by the Patent Reexamination Board cannot be accepted, the proceeding can be instituted to Beijing No. 1 Intermediate People's Court with the Patent Reexamination Board as the defendant and the other party in the invalidation examination process as the third party. This litigation belongs to administrative litigation of first instance. If the decisions made by the Court of First Instance cannot be accepted, the appeal may be instituted with Beijing Higher People's Court, which belongs to administrative litigation of second instance. In the draft for examination and approval to the State Council submitted by the State Intellectual Property Office in the end of 2006, this kind of examination mode of patent invalidation was not mentioned to change. However, during the review process conducted by the Legislative Affairs Office of the State Council, there existed an opinion with a large amount that the above examination mode of patent invalidation is time-consuming and energy-consuming, and has many defects, so many people hope to amend it. To this end, in consultation with many parties, in the Patent Law (Revised Draft) of February 2008 by the State Intellectual Property Office, Article 46, Item 2 of the Patent Law was amended as follows:
Article 46, Item 2 of the current Patent Law:
Where the patentee or the person who made the request for invalidation is not satisfied with the decision of the Patent Reexamination Board declaring the patent right invalid or upholding the patent right, such party may, within three months from receipt of the notification of the decision, institute legal proceedings in the people's court. The people's court shall notify the person that is the opponent party of that party in the invalidation procedure to appear as a third party in the legal proceedings.
The amendment in the Patent Law (Revised Draft) of February 2008:
Where the patentee or the person who made the request for invalidation is not satisfied with the decision of the Patent Reexamination Board declaring the patent right invalid or upholding the patent right, such party may, within three months from receipt of the notification of the decision, institute appeal proceedings in the people's court according to Civil Proceeding Law of PRC.
If the changes mentioned above can be achieved, the current examination mode of patent invalidation in China will be changed tremendously. First, there will be an examination level reduced from the original three levels of first level administrative examination as the first level and administrative litigation examination as the second level into the two levels of first instance and the appeal level. The efficiency will be greatly improved. At the same time, the administrative examination proceeded currently in Patent Reexamination Board will be defined as a quasi-judicial examination with preliminary nature. The role of the Patent Reexamination Board has been changed from the current typical administrative attribute to quasi-judicial attribute. This benefits brought by this change are obvious, but it also has to face many legal obstacles. The review conducted by the Patent Reexamination Board with administrative attribute will become regarded as first level of judicial examination, which proves to be a great breakthrough from current existing legal system, and there exists many inconsistencies with the relevant regulations of the current Organization Law of People's courts, so whether the goal can be achieved is still a doubt. The author agrees with this change, but it still requires a slight change, that is, on the basis that the examination conducted by the Patent Reexamination Board is regarded as the first level of judicial examination, there should be a limited third instance system, that is to enable the Supreme People's Court the right to decide whether to accept the appeal to the second-instance judgment in order to better unify their differences and ensure the consistency in the implementation of laws. Of course, it will be another breakthrough from the existing judicial system, but it is worth considering the inventive step of patent, why should we be constrained by the existing legal framework and legal theories? If even the technological personnel are so detained and do not have the courage to break with the past, then will there be a large number of patents emerging in our world?
2．The Establishment of Absolute Novelty Standard
At present, China has taken the combined standards of novelty. As for the standards from a general point of view, it is not conducive to genuine inventions and innovations, and if a certain product or a particular method has been used and sold in foreign countries publicly so that the public of other countries can make use of it while it gets granted in China, it will be unfair to the public of China. Judging from the current international trend, whether related to publications, public use or public sales, the use of absolute standard of novelty is a clear trend internationally. From both the actual domestic needs and the trend of harmonious development of IPR national regulations, it is necessary to adjust the combined standards of novelty to absolute novelty. It is precisely because of this, the modification in the draft submitted for examination and approval is as follows:
The current patent law:
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.
Draft submitted for examination and approval:
Novelty means that, the invention or utility model does not belong to existing technologies, nor did the identical invention or utility model applied by any other patent administration department of the State Council and made the application recorded in the documents that published in patent filing documents or patent publications after the filing date.
The existing technology said in the law refers to the technology published publications or used by the public or known by public by other means in China or overseas before the filing date.
It should be said that the change above is a trend with positive meanings and the understanding of public awareness to this issue is consistent. Therefore, if there is no unexpected event, the prospects for passing the modification are very bright.
3. On the Amendment of Design Patent
In draft of the patent law submitted for examination and approval, the perfection of design system is very noticeable. The design changes are mainly reflected in the following five aspects:
(1) Appropriate restrictions on the scope of design patents. The graphic and color printed on the plain printed matter or the combination only as a role of the logo shall not be granted design patent rights. This is mainly because the design on plain printed matter plays the role of a logo but not an improvement of product appearance. In addition, the design only playing a role as a logo will also increases unnecessary overlapping and duplication of trademark rights and copyrights rights.
(2) Enhance the design granting requirements. The existing patent law merely prescribes that the design to be granted patent right cannot be identical or similar to the previous design patents. It is regulated now that granted design patent should be a clear distinction from the existing designs or combinations of existing designs.
(3) Allow the applications for relevant designs. In reality, after a basic design is made, there will be a series of designs with the original one as the center and being close and similar to this design. The allowance to relevant design application is conducive to the applicants for protection of getting more similar designs. Therefore, it prescribes that a complete set of designs products can be filed an application for, and besides this, the similar relevant design can also be filed an application for.
(4) Establishment of a search report system. It prescribes that as for the design and utility model rights, if patentee exercises the right or institutes a litigation, he must provide search report of design or utility model to the relevant judiciary organs and patent administration department to avoid the adverse effects to the interests of the public because the current designs and utility models require only a preliminary examination and related patentees may abuse rights.
(5) It prescribes that in the application documents of design, a brief description can be used to interpret figures or photos to provide a more scientific, reliable way for recognition of protection scope of a design patent.
Among the changes mentioned above, it is very important to enhance the review standard of design.
The existing provisions are:
Any design for which patent right may be granted must not be identical with and similar to any design which, before the date of filing, has been publicly disclosed in publications in the country or abroad or has been publicly used in the country, and must not be in conflict with any prior right of any other person.
Draft submitted for examination and approval:
Any design for which patent right may be granted must not belong to existing designs, nor are there any identical designs that had been filed by other person to the patent administration department of the State Council and had been recorded in the published patent documents after the filing date. And for designers in the field of design, there is clear distinction from the existing design or from the combination of existing design features.
The existing design stated in the law refers to the design published in publications or used by the public or known by public by other means in China or abroad before the filing date.
The draft submitted for examination and approval prescribes that the design for which patent right may be granted must be distinct from the existing design or from the combination of existing design features for designers in the field of design, which actually increases the requirements of inventive step that is similar to inventions and utility models. One noticeable improvement compared with the granting standard of not identical with or not similar to the existing individual design in the current existing provisions.
4．On the Changes of Patent Agents
Following is the comparison of the modification:
The existing provisions:
Article 19 Where any foreigner, foreign enterprise or other foreign organization having no habitual residence or business office in China applies for a patent, or has other patent matters to attend to, in China, it or he shall appoint a patent agency designated by the Patent Administration Department Under the State Council to act as his or its agent.
Where any Chinese entity or individual applies for a patent or has other patent matters to attend to in the country, it or he may appoint a patent agency to act as its or his agent.
The draft submitted for examination and approval:
Article 19 Where any foreigner, foreign enterprise or other foreign organization having no habitual residence or business office in China applies for a patent, or has other patent matters to attend to, in China, it or he shall appoint a patent agency approved to establish by the Patent Administration Department Under the State Council to act as his or its agent.
Where any Chinese entity or individual applies for a patent or has other patent matters to attend to in the country, it or he may appoint a patent agency approved to establish by the Patent Administration Department Under the State Council to act as his or its agent.
In fact the provisions mentioned above are to abolish the patent agencies with foreign qualification. This is mainly due to: with the development of China's patent system and patent business, and our agent business is becoming more and more mature, more and more agent firms possess the ability to deal with foreign patent matters. In order to create a good environment for fair competition and to stimulate patent agencies to improve their operational ability to provide patent applicants with a better service, the foreign qualification will be abolished. This means that foreign applicants can entrust any agency commissioned by the State Intellectual Property Office in China, and that is not just limited to the designated firms with foreign qualification when filing patent applications in China.
