Patent law of the People's Republic of China

Types of patent protection

Patents in China are granted by the State Intellectual Property Office (SIPO). There are three types of patents: invention patents, utility model patents, and design patents. Invention patents are substantively examined, while utility model patents are subject only to a formal examination.

Enforcement of patents

In common with other forms of intellectual property right in China, patents can be enforced by administrative authorities or in civil or criminal litigation.

Administrative patent enforcement

The legal basis for administrative patent enforcement is found in the Patent Law, the Enforcement Regulations for the Patent Law, and SIPO's Regulations on Administrative Patent Cases.

Two types of illegal patent acts can be handled by administrative authorities - ordinary infringement complaints regarding the making/importation, use, and sale/offering for sale of patented articles; and patent counterfeiting (which encompasses several acts similar to false marking). Administrative enforcement is traditionally the most commonly used option by patent owners and is handled by provincial or city-level intellectual property offices (formerly and still colloquially known as Patent Bureaux).

On accepting a complaint, which requires some prima facie evidence of infringement, the local Bureau can raid infringers' premises and confiscate infringing materials and tooling. Often, the Bureau will attempt to mediate settlement between the parties. However, it is also empowered to make its own decisions. Sanctions can include destruction of products/tooling and an order to stop infringement, but Bureaux cannot award damages to patent owners. In cases of patent counterfeiting, the Bureau can however impose a fine on the infringer. Administrative decisions can be appealed to the People's Court.

Civil litigation

Courts' jurisdiction over patent proceedings is clarified in the Supreme People's Court's Several Provisions on Issues Relating to the Application of Law to Adjudication of Cases of Patent Disputes. Cases are usually begun in the Intermediate People's Court, although serious cases can be tried in the Higher People's Court and even exceptionally the Supreme People's Court.

A degree of forum shopping is permitted as disputes can be heard either where the defendant is domiciled, or where the infringing act (e.g. sale of infringing goods) took place.

Interim injunctions are available (including the equivalent of an Anton Piller Order), but if relief is granted the plaintiff is bound to initiate proceedings within 15 days thereafter.

On a finding of infringement, the Court has a wide range of remedies available, including final injunctions, destruction of infringing goods/tooling, and compensatory damages (if the plaintiff cannot prove his loss, the maximum statutory damages available are RMB500,000 per infringement).

Criminal proceedings

China's Criminal Code enables Public Security Bureaux under the People's Procuratorate to take action in cases of serious infringement. Private prosecutions are possible in limited circumstances.

Patent interpretation

Patents are construed both literally and according to the doctrine of equivalents. In China, an equivalent is an element of an article which is "insubstantially different from" an integer of the patent's claim: a technical feature which can be conceived easily by the patent's addressee that performs substantially the same function as the claim's integer, in substantially the same way, achieving substantially the same result. The "all elements" rule applies, such that for an article to be an infringement it must contain features identical or equivalent to all elements of the patent claim.

Patent validity

Any person can contest a patent's validity. There is a post-grant opposition procedure available through SIPO, or otherwise actions can be initiated at the Patent Review Board (PRB). Appeal lies to the Beijing IP Court now. Before 2014, it was Beijing Intermediate People's Court.

Patent litigation proceedings are bifurcated, meaning that issues of infringement are tried separately (and in a separate venue) to invalidity. Normally infringement proceedings will be stayed (on application by the defendant) pending outcome of the invalidation hearing.

Novelty

With the Third Amendment to the Patent Law, China now applies a standard of absolute novelty. That is, an invention is not new (and therefore unpatentable) if it has been published or publicly disclosed anywhere in the world at the priority date.

Inventiveness

To be considered inventive, an invention must have, in the eyes of the notional addressee, prominent substantive features that mark a notable progress in the state of the art; alternatively, that the addressee cannot obtain from existing technology all the necessary technical features of the invention.

SIPO's examination guidelines, which are often followed by the Courts also, recommend the "problem-solution" approach to assessing obviousness:

1. Identify the closest prior art; 2. Identify the technical problem to be solved; 3. Identify the differences between the prior art and the invention; 4. Would those differences be obvious to the skilled addressee trying to solve the technical problem?

The notional addressee is an ordinary technician skilled in the field of the invention.

Industrial applicability and excluded matter

An invention possesses industrial applicability if it can be made or used in such a way as to generate effective results. Excluded subject matter is in line with TRIPS, that is scientific discoveries, methods for mental activities, methods for the diagnosis and treatment of disease, animal and plant varieties, and a catch-all for other undesirable inventions.

Software is explicitly included as a method for mental activity. However, SIPO's examination guidelines follow EPO practice and allow software inventions which produce a technical effect and are not merely software-as-such.