Patent opposition strategies
Since many companies, including increasingly litigious Chinese companies, own large numbers of Chinese patents, the possibility of a foreign company being sued for patent infringement in China is rising all the time. According to the State Intellectual Property Office (SIPO) Annual Statistics Report, there were 4.19 million valid patents in China in 2013, with over 3.63 million of these owned by Chinese entities. Of this 4.19 million, 1.9 million were utility model patents and 1.2 million were design patents. The number of applications being filed is also exploding, with nearly 90% filed by Chinese entities.
Since many companies, including increasingly litigious Chinese companies, own large numbers of Chinese patents, the possibility of a foreign company being sued for patent infringement in China is rising all the time. According to the State Intellectual Property Office (SIPO) Annual Statistics Report, there were 4.19 million valid patents in China in 2013, with over 3.63 million of these owned by Chinese entities. Of this 4.19 million, 1.9 million were utility model patents and 1.2 million were design patents. The number of applications being filed is also exploding, with nearly 90% filed by Chinese entities. In 2013 more than 2.3 million patent applications were filed, with around 800,000 of these being for inventions, around 900,000 for utility models and around 660,000 for designs.
This sharp rise is causing great concern among businesses, especially with regard to utility model and design patents. This is because these are granted without substantial examination; that is, no sophisticated prior art searches and technical reviews are conducted by experienced examiners. Consequently, the scope of protection for some utility model and design patents may be unreasonably broad, which may lead to infringement being established far too easily.
Foreign companies need to seriously consider the risk that their products or services might fall within the scope of patents owned by others and that this may result in them being sued for patent infringement in China. One recommended path for foreign companies facing such a prospect is to try to have the patent in question invalidated. All requests for declarations of patent invalidity must be filed before the Patent Re-examination Board rather than the court handling the patent litigation. Either party may then appeal the decision before the Beijing IP Court established in December 2014 or the Beijing High Court. This report discusses various features of patent opposition in China and how to prevail before the Patent Re-examination Board.
Novelty and inventiveness
Lack of novelty or inventiveness is the most frequently used basis of invalidation for invention, utility model and design patents. Over 85% of invalidation decisions in favour of petitioners are made on the basis that the patent in dispute lacks novelty or inventiveness, as stipulated in Articles 22(2) and (3) of the Patent Law. Therefore, the petitioner should throw the majority of its resources and energy into searching for prior art references and then devising an invalidation strategy based on the results of this search.
In addition, the petitioner might wish to consider using SIPO’s search centre to carry out an invalidation search. Not only is this relatively cheap, but the search results tend to carry weight with the Patent Re-examination Board.
The novelty requirement states that all of a patent claim’s technical features should be found in a single prior art reference. The inventiveness requirement allows a combination of multiple prior art references, normally fewer than three.
The eligible prior art references must usually be in the same technical field as the disputed patent or in a technical field where persons of ordinary skill are likely to search the prior art for the solution to a technical problem. However, the eligibility of a prior art reference when this is part of a combination is not strictly limited – which differs from other countries. Cross-field prior art references are found occasionally in Patent Re-examination Board decisions. The All China Patent Agent Association’s materials for training new patent agents offer a useful example of a cross-field reference. In this instance, a reference about the Wheatstone bridge was cited in combination with a reference to deny the inventiveness of a claim for a vibrating membrane which had a balance mechanism using the same principle as the Wheatstone bridge. When conducting a prior art search or devising an invalidation strategy, petitioners may wish to consider the situation from a broader technical point of view in order to increase their chances of securing an invalidation.
Common knowledge in the art is often used to evaluate the inventiveness of a patent claim. Moreover, applications of common knowledge in the art need no clear teaching to be cited in any references; the petitioner is merely required to provide evidence of the common knowledge, which might include textbooks, technical manuals and popular technical journals. However, if the common knowledge is so obvious that there is no reason to doubt it, the petitioner is relieved of the obligation to provide evidence. Common knowledge is frequently used to deny the inventiveness of dependent claims. Therefore, no matter how obvious an additional feature in a dependent claim is, the petitioner should prepare evidence for it if it plans to rely on common knowledge in the art.
After the revision of the Patent Law in 2008, the novelty requirement turned into an absolute standard. Thus, any publication or public use anywhere in the world before the filing date will destroy the novelty of a patent claim. In addition, unlike patent laws in the United States, China’s Patent Law stipulates no grace period before filing a patent application, but only three exceptions for maintaining novelty:
- publication in an exhibition;
- publication in an academic conference; and
- unauthorised publication by a third party.
The scope of the first two exceptions is extremely limited and they cannot be claimed retroactively. Therefore, a petitioner may use any evidence of public use or sale outside of China before the filing date to invalidate a patent in China. In addition, it should make sure to notarise any evidence of public use or sales outside of China before presenting it during patent invalidation proceedings (while legalisation is not normally required before the Patent Re-examination Board, it is required in court proceedings).
Faced with a strong challenge from a petitioner – especially with regard to lack of novelty or inventiveness – patentees often try to interpret the claim or the terms of claim more narrowly in order to distinguish them from the prior art. This may be useful in litigation, according to the prosecution history estoppel, as it prevents the patentee from then claiming the scope which it has already given up during the invalidation proceedings with this constricted interpretation.
Other reasons for patent opposition
Enablement, new matters, support and clarity are other reasons frequently cited in requests for declarations of patent invalidity. Among these, the issue of new matters is particularly interesting. While the claims of many patent applications are amended during prosecution, applicants are not required to add new matter to the new claims at this time. Since 2007, SIPO has gradually been adopting a strict new standard to determine what constitutes a new matter. According to this, if a new feature is not described literally, it must be deducible directly and unambiguously from the original disclosure. This is much stricter than the requirements in other jurisdictions, such as the United States and Japan. In addition, because SIPO did not arrive at this new standard by revising the Guidelines of Patent Examination – which would have resulted in an official transition – it applies to all applications and patents, regardless of whether they were made before or after the new standard was adopted. Petitioners can take advantage of this strict new standard and invalidate amended claims which do not comply with it.
Another fruitful aspect is the requirement for support in chemical and biological fields. SIPO holds that inventions in these fields lack theoretical predictability from the existing knowledge available for persons with ordinary skill in the art. Consequently, it has adopted an extremely high support requirement, which is generally satisfied only by technical solutions disclosed in the working examples with the support of experimental data. Where a claim covers something of which persons with ordinary skill in the art have a reasonable suspicion according to the knowledge available to them, or something that possibly has different characteristics, the scope of the claim might be deemed too broad and thus unsupported by the specification. Following on from this, a petitioner may check whether sufficient working examples are disclosed in the specification in view of the broadness of the claims when trying to invalidate a chemical or biological patent and challenge any claims with a broad scope of protection.
When challenging the creativity of a design patent, it is good practice to present some prior designs in the art, rather than presenting only the prior designs that are most similar to the target design patent
Utility model patents and design patents
It is commonly held that a utility model patent enjoys a lower requirement of inventiveness and may be easier to validate if it shows some differences from the prior art. However, a petitioner invalidating a utility model patent is limited by the number of prior art references and the technical field in which these are found. The inventiveness analyses on invention patents and utility model patents are substantially the same. Moreover, because the application of common knowledge has no limit on quantity and the divisions between technical fields are often ignored by the Patent Re-examination Board, there is no significant difference between trying to invalidate an invention patent or a utility model patent.
When challenging the novelty of a design patent, online evidence can be extremely compelling. Some patentees do not realise that any disclosure before the filing date may destroy the novelty of their patents and thus may have already disclosed the patented design in various ways before the filing date (eg, advertisements, online news reports or availability for sale online). If this kind of disclosure can be discovered, it can prove useful. We have successfully challenged several design patents based on prior disclosure. One case involved prior disclosure by the patentee on its own website; another involved reports by several major news websites. Of course, these disclosures had pictures showing the patented designs and additional evidence proved that the date of disclosure was earlier than the filing date. If the online disclosure is made by the patentee itself or by an influential website such as JD.com, Taobao.com, Alibaba.com or Sina.com.cn, the evidence will be reliable, making it highly likely that the panel will accept it. After locating such evidence online, remember to have it notarised. Otherwise, the patentee may take steps to alter the website after receiving the Patent Re-examination Board’s invalidation request.
Under the revised Patent Law, a design patent must exhibit a degree of creativity, in addition to novelty. Like the inventiveness criterion for invention patents and utility model patents, creativity allows the petitioner to combine two or more prior designs to illustrate that the claimed design is obvious in view of the prior designs and thus is not patentable. While the creativity requirement makes it considerably easier for a petitioner to invalidate a design patent, it is still unclear what kind of teaching is required to enable a person skilled in the art to combine two prior designs. A popular viewpoint is that there should be explicit teaching in the prior designs. The outstanding question is how to evaluate the visual effect and determine whether it differs significantly from each of the prior designs, but may be obtained by combining them. Despite this, the requirement gives petitioners a new and useful way to challenge a design patent’s validity based on lack of creativity compared to prior designs.
When challenging the creativity of a design patent, it is good practice to present some prior designs in the art, rather than presenting only the prior designs that are most similar to the target design patent. Creating such a context helps to familarise the panel with the art and informs them about the density of design patents in this area. The requirement of creativity varies according to different arts. If the target design patent relates to an art in which the design options are limited, then a slight difference from the prior design may suffice to meet the requirement of creativity. However, if there are numerous design options for the product in question, then slight differences will be insufficient. For example, when challenging a faucet design patent, by presenting prior faucet designs the petitioner may be able to let the panel know that there are so many design options in this area of art that the freedom of design is not limited – therefore, slight differences do not render the design creative over prior designs.
The revised Patent Law also makes it easier to invalidate a design patent based on a conflict with a prior right. One common situation is where a claimed design uses a trademark or a copyrighted work owned by others before the filing date of the design application. The owner of the prior right or a party of interest – usually a licensee with a right of action – can file a request for a declaration of invalidity for the design patent based on a trademark or copyright. Before the Patent Law was revised in 2008, the Patent Re-examination Board would not accept such requests unless the petitioner could present an effective judgment issued by the courts or an effective decision of an administrative agency of the government. This requirement became a serious burden for petitioners and prevented rights holders and parties of interest from invalidating design patents that conflicted with prior rights. Now that this requirement has been removed, petitioners can file invalidation requests based on conflict with a prior right by presenting evidence of the prior right’s validity and the substantial similarity between it and the related part of the claimed design. This has become an efficient and effective way to invalidate design patents filed in bad faith.
The procedure before the Patent Re-examination Board is similar to that before the courts. After a request for a declaration of invalidity of the patent is accepted, it will be forwarded to the patentee, which then has one month to file a response. The board will then appoint a panel of three examiners (five for particularly complex cases), including a chair, a chief examiner and an assistant examiner. The panel will make a decision directly based on the materials filed by both parties or conduct an oral hearing before deciding the case. A petitioner should explicitly require an oral hearing in the invalidation request in order to ensure that it has the opportunity to set out all of the reasons why the patent should be invalidated.
Because the Patent Re-examination Board accepts no additional reasons or evidence filed after the one-month period from which the invalidation request is filed, the petitioner should submit all of its arguments and evidence in the initial request – although patentees seldom do the same in their response. Including a detailed analysis in the request will help the panel to understand similarities between the technical solutions provided by the patent and prior art, and facilitate any oral hearing.
However, a petitioner should be aware that a patentee may be able to gain an advantage from seeing such a detailed analysis. Certainly, it will give it time to prepare counterarguments, which it is not obliged to disclose until the oral hearing. A petitioner should bear this in mind and prepare for the hearing accordingly.
Foreign companies need to understand the potential infringement risk presented by the large number of patents in China, especially utility model patents with a broad scope of protection and design patents with no significant design features. Patent opposition is an effective way to deal with the risk of patent infringement in China for both defensive and offensive purposes. If litigation has been raised against the foreign company, it is advisable to initiate an opposition before the Patent Re-examination Board. There are specific steps to take in patent opposition in China, as described in this article, and foreign companies should be familiar with them in order to prevail.
Chang Tsi & Partners
7-8th Floor Tower A, Hundred Island Park
Bei Zhan Bei Jie Street, Xicheng District
Beijing 100044, China
Tel +86 10 8836 9999
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Martin Meng manages the patent department at Chang Tsi & Partners. He has over a decade of experience as a patent and IP attorney, assisting foreign and domestic companies in IP prosecution and enforcement. Mr Meng focuses on patent infringement litigation, invalidation of patent rights, prosecution of patent applications and drafting of patent applications. He is also experienced in assessing patentability and enforceability and handling invention, utility model and industrial design patents across many sectors.
Howard Hao is a patent attorney and the deputy manager of the patent department. He provides consultation services on a wide range of patent issues, including inventions, utility models and industrial designs. Mr Hao has filed over 600 patent applications and responded to over 500 office actions relating to medical equipment, engines, automotive technology, machine tools, metal materials and mechanical and electrical control systems.