China relaxes rules on software patentability – and the United States loses more ground

China relaxes rules on software patentability – and the United States loses more ground

Amended patent examination guidelines will come into force in China next month that look set to make it easier to obtain patent protection on certain software-related inventions in the country.

The final revised rules announced by China’s State IP Office (SIPO) on Wednesday follow the publication of draft proposals back in October which were widely seen as strengthening patent protection for software. The new examination guidelines – which also appear to loosen restrictions on business method patents, as well as on the post-filing submission of experimental data for certain life sciences patent applications – will be effective from 1st April.

A summary of the changes can be found on SIPO’s website and here, in Chinese. Helpfully, Huang Xiaolin, senior partner at Beijing-based law firm ZY Partners, has provided an English-language outline and analysis in a LinkedIn post.

According to Huang, the revised guidelines draw a distinction between ‘computer programs per se’ and ‘inventions related to computer programs’, with the latter being patent-eligible. Here is his comment on the current status of software patents under Chinese statute, and how the incoming rules are likely to impact examination practice:

In the past, a software-related invention could be drafted only as a process claim or a ‘means plus function’ claim, and the latter is usually construed in a very narrow manner according to embodiments disclosed in the specification. Medium, computer program product and ‘processor plus process’ [claims] are not statutory subject matter in China. Consequently, patent protection for software-related inventions is weak and limited.

This problem may be addressed by the revised guidelines. Software claims such as ‘a computer program product’, ‘a machine-readable medium’, and ‘an apparatus comprising a processor configured to execute instructions on a computer-readable medium to perform steps of...’ shall become patent-eligible. A comprehensive protection for software-related patents is now expectable.

China’s apparent embrace of software patents stands in stark contrast to the situation in the United States, which many would see as the traditional home of the software industry. The US Supreme Court’s Alice decision, other court rulings and legislative reforms that have arguably made it easier to invalidate patents, have thrown eligibility into doubt, significantly diminished the value of many existing software-related patents and, arguably, pushed business method patents towards complete extinction.

There are plenty of reasons why many software businesses will still prefer to base themselves out of the United States rather than China (concern about possible and probable state interference is the first thing that leaps to my mind while writing this). Nevertheless, it is increasingly looking easier and more worthwhile to obtain patent protection on software inventions in China, as compared to the United States. There may still be a big gap between them – what with the former’s issues with low damages, inconsistent enforcement and so on – but it seems that Chinese-issued patents are creeping up the value scale, while US-issued ones are losing ground. 

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