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Leveraging Chinese Patent Practice for Strategic Patent Procurement
Nancy SONG
Chinese Patent Attorney
Electrical Engineering Department
Linda Liu & Partners
Strategic patent portfolio management requires a portfolio manager to expedite prosecution for quicker allowance for some patent applications, and to extend the pending time for more flexibility for some other patent applications. In the year of 2019, foreign entities filed 157,093 invention patent applications before the China National Intellectual Property Administration (CNIPA), with a year-over-year growth rate of 6.1%. As China has increasingly become a popular jurisdiction for patent filings, it would be important for a global patent portfolio manager to be aware of the options available in China for achieving the two competing objectives. Discussed below are available avenues and noteworthy points on both of these topics.
Expediting prosecution
Patent Prosecution Highway (PPH)
Among the limited acceleration programs before the China National Intellectual Property Administration (CNIPA), the PPH is cost efficient and more widely applicable. In the first half of 2019 for instance, U.S. entities filed 11,308 PPH requests before the CNIPA.
As a major advantage, the PPH in China can significantly advance the issuance of the First Office Action (First OA) from the CNIPA. The First OA typically takes from 1 year up to 3 years to issue, whereas under PPH it usually takes 1-3 months after the approval of a PPH request (the approval of the PPH request takes approximately 1-2 months). There is no official fee for filing PPH requests in China, and the attorney fee is usually small, e.g., $200 - $300, as long as the allowance record with the Office of First Filing (OFF) is not complicated.
It is commonly known that utilizing the PPH requires full correspondence between at least one pending claim and the at least one claim found allowable by the OFF. Notably, in China, there are more stringent timing requirements as to when a PPH request can be filed, in particular bound by the official deadline for making voluntary amendments before the First OA issues. In most cases, claims found allowable by the OFF are different from the pending claims in China either formally or substantially. In this instance, the applicant must amend the Chinese pending claims to correspond to the allowable claims of the OFF by the official deadline for making voluntary amendments. In other words, one or more claims must be found allowable by the OFF prior to such an official deadline.
Accordingly, if you have a favorable PCT search opinion indicating at least one claim as allowable, you of course can file a request for PPH in time in the China national phase application. In other cases, e.g., if you have received the allowance from USPTO via Track One, you may be in a good position to file a request for PPH in time.
The official deadline for making a voluntary amendment is tied to when the Request for Substantive Examination is filed. Therefore, it is possible to manipulate the deadline of filing a PPH request by the foreign counsel and the Chinese counsel. The counsels may effectively coordinate as to when to place the corresponding application in condition for allowance at the OFF and when to request substantive examination before the CNIPA. For instance, the foreign counsel and the Chinese counsel can coordinate to ensure that the Request for Substantive Examination is not filed so early at the CNIPA that there is not enough time to achieve allowance in the corresponding application.
If you have received the OFF's allowance even before the Chinese application is filed, there would be no concern about the timing requirement for PPH. But a common question that is often asked is whether the PPH in China only advances the First OA. Informal statistics based on hundreds of cases have shown that where PPH was requested, the number of OAs was reduced and the allowance rate was increased. The earlier issuance of the First OA plus the reduction in the number of office actions effectively shorten the pending period before allowance for cases on the track of PPH.
Telephone interviews
Telephone interviews with the CNIPA seem to be a myth for many foreign practitioners. Many have asked whether telephone interviews are useful before the CNIPA, or whether such interviews are at all accepted by the examiners. The answer is yes. In fact, telephone interviews are often conducted by proactive firms, and they are found to be very helpful to expedite prosecution for both PPH and non-PPH cases.
After the release of the amended Examination Guidelines of the CNIPA (effective November 1, 2019), which encourages the examiners to be more open to telephone interviews, the examiners have become even more willing to discuss not only formal issues, but also complicated inventiveness issues by telephone. The Guidelines also encourages the examiners to use face-to-face interviews and video conferences as long as they facilitate prosecution. Accelerated subsequent prosecution after the First OA and expedited allowance within about one year are achievable through proactive communication with the examiner, in particular via multiple telephone interviews.
Extending the pending time
While many companies are interested in speedy allowance, there are other occasions that require slowing the process down—for instance, when it is unclear to the company how the competitor's product might look like. In Chinese practice, filing divisional applications is not as flexible as in the U.S. and is mostly bound by the pending period of the ultimate parent application in China. Thus, in the interests of extending the pending time, it may be worthwhile having the ultimate parent application pending for a longer period.
The amended Examination Guidelines as of November 1, 2019 has added an option of Deferred Examination. The request for a deferred examination has no official fee. The applicant may request to defer by 1 year, 2 years, or 3 years at the time of filing the Request for Substantive Examination. Notably, according to the official information session hosted by the CNIPA, the request for deferred examination cannot be changed or withdrawn once it is made. Moreover, the request only effects delay in commencing the substantive examination by the substantive examiner; other official deadlines which are calculated based on the deadlines for Substantive Examination would not be changed. Similarly, the due dates for other official fees would not be changed or delayed. Therefore, if the applicant has a clear intention to keep the family pending as long as possible, it may request a deferred examination.
The extended pending time would in turn allow for an extended time period during which the applicant could file one or more divisional applications based on the parent application at the CNIPA. After receiving the Notification of Granting a Patent Right in the parent application, one or more divisional applications can still be filed within two months from the deemed reception date of mailing the Notification, regardless of whether one decides to proceed with the registration of the parent patent or not.
As time progresses, the landscape of the competitors may become clearer to the applicants, and so many would start to think about the so-called "targeted continuation" filings, where the claim language is broadened for instance or explicitly maps the terminology used by the competing products.
In one example, the applicant may have used the term “computer terminals” in its application. It subsequently becomes aware of one or more competitors’ products using "virtual processors" with essentially the same idea. The applicant may wish to consider claiming "virtual processors" in a targeted Chinese divisional application.
However, it is noteworthy that the CNIPA has strict requirements for literal support, sometimes even verbatim. Although certain examiners are more flexible than others, Chinese practice is in general far less flexible in changing terminologies after the first filing, as compared to patent practices in other jurisdictions, for example, the U.S..
For an applicant that has a large market in China or such market prospect, it is always advisable to keep in mind the strict literal support requirements when drafting the first application. It may be helpful to brainstorm with the stakeholders, in an attempt to include as many variations and/or alternatives of the devices and their terminologies under a similar innovative concept as possible. It may also be helpful to present in the application the innovative concept in a hierarchical manner from the broadest, the medium-level, to the narrowest, so as to provide a comprehensive literal coverage in the first filing. This would allow the Chinese counsels more leeway to pursue particular claim languages that cover one or more potential competitors’ products, by selecting the appropriate support from the first filing.
Example
Some applicants already have been implementing the aforementioned strategies. In a typical example, a deferred examination is requested in the ultimate parent application in China to keep the parent application pending as long as possible, so that multiple divisional applications can be filed based on the parent application.
As the examination of the counterpart applications progresses in other jurisdictions, the option of filing a PPH request based on a favorable result of the OFF may become available for expediting one or more of the divisional applications in China. As such, both expedition and extension are leveraged in the same family of Chinese applications, responsive to specific market needs of the applicants.
Closing
As the purchasing power of its 1.4 billion population continues to be unleashed, China has grown into one of the largest markets in the world. For innovators who consider China as one of their major markets where their invention would be commercially exploited, with the enhancement of patent enforcement, strategic patent procurement would lay a solid foundation for sound protection.
(The author hereby acknowledges the contribution of Ms. Chi Pu of Spruson & Ferguson, Australia in editing the English language expression.)
