This entry is dedicated to Patents, Utility models and Design rights.
Patents are the primary vehicle for protecting technology in most technology-based businesses. The basic idea behind the patent system in China is the same as that in the EU: in exchange for publishing details of an invention, the State grants the inventor a monopoly over his/her invention (i.e., the right to stop another party from unauthorized use of the invention) for a fixed period. The relevant patent legislation in China is the
Patent Law,
(
http://english.sipo.gov.cn/laws/lawsregulations/201101/t20110119_566244.html
)
the
Regulations for Implementation of the Patent Law
of 2001
,
and the
Measures on the Administration of Patent Agencies
.
(A very useful web-site to help the foreign investor understanding IPR in China is the following:
http://www.chinaipr.gov.cn/
).
In particular, China’s
Patent Law
provides protection for inventions (both products and processes), utility models (creations or improvements to the form, construction or fitting of a product, but not processes; also known as “minor patents”) and designs (the shape, pattern or their combination, or the combination of the color with the shape or pattern, of a product).
Under the Chinese
Patent Law
, any foreign individual or enterprise without an office in China and wishing to apply in China for a patent must use an authorized Chinese patent agent to file the application on his/her behalf. Patents are filed at the State Intellectual Property Office (hereinafter SIPO) in Beijing. The provincial and other local offices of SIPO are responsible for the administrative enforcement of patents. (SIPO’s law and regulations are available at the following web-site:
http://english.sipo.gov.cn/
).
The term of protection for an invention patent is 20 years from the original filing date; for utility and design patents, it is 10 years from the original filing date. However, the right to take action on a patent commences from the date that the grant is officially published in SIPO’s journal. After the publication of an application for an invention patent, the applicant may require any entity or individual exploiting the invention to pay a fee. With respect to utility model and design patents, the publication and grant date are the same. Therefore, when the subject of the utility and design patent is published, the patent holder has an immediate right to take action on the patent.
Chinese law provides a useful distinction from personal inventions by calling this type a
“service invention
.
”
It should be noted that in China there is a “claw-back” provision under which, subject to certain conditions, a former employer has a right to claim ownership of any patent issued in respect of an invention made by a former employee within one year of his/her departure. This may even apply to inventions that were initiated during an employee’s time with a former employer but not completed until after the previous employment.
China’s
Patent Law
provides that the right to apply for a patent, and the issued patent itself, may be assigned to a third party. However, SIPO must approve any assignment of patent rights by a Chinese individual or entity to a foreigner. Such assignment must also comply with related regulation on technology transfer.
Utility models, sometimes referred to as “minor patents,” are available in many countries, including France and Italy as well as China
.
It may be a good idea to apply to register a product as a utility model if an invention patent is not attainable. It may also be an advantage to apply for a utility model following a patent application as this could mean that you gain protection after (typically) one year pending the grant of the invention patent, which typically takes three to five years (up to six years in difficult cases). Once an invention patent is granted you may choose for it to replace the utility model patent.
Protection for utility models is similar to that for “full” or “invention” patents, and the patentability rules for both types are based on three elements:
“Any invention or utility model…must possess novelty, inventiveness and practical applicability”
(Article 22).
While the “novelty” and “practical applicability” criteria are the same for invention and utility model patents, the “inventiveness” requirements differ, making the grant of utility models less demanding. A further difference is that invention patents give protection for a maximum of 20 years, utility models for 10, each subject to the payment of annual fees.
Under China’s Patent Law
“Where two or more applicants file applications for patent for the identical invention-creation, the patent right shall be granted to
the applicant whose application was filed first”
(first to file principle).
Designs are covered by the Chinese Patent Law. As in other countries, this form of rights deals with the shape or other visible attributes of a product and applications must be novel. (But note that the amendments to the Patent Law will alter the “novelty” test for designs. Legal advice will invariably be needed on this point). The law’s design rights provisions are similar to those for utility models, with protection for a maximum of 10 years. The ‘right of priority’ for previous filings of designs overseas requires filing in China within six months.
The licensing of patents to other businesses is provided for under the Patent Law. Such agreements must be registered with SIPO, which must also approve the assignment of patent rights to foreigners.
This entry was intended to introduce Patents, Utility models and Design Rights in China. However the theme is not complete yet, and in the next entry I will explore others aspects.
(Some of these articles are extracted from my work titled M&A and Takeovers in China, so if you are interested in this topic, please visit:
http://www.kluwerlaw.com/Catalogue/titleinfo.htm?ProdID=9041140484
).
Cristiano Rizzi