The New Trend of Utility Model Applications in China
In the February edition of Osha Liang’s newsletter, we published an article that discussed the main characteristics of utility model protection in China, Japan and European countries where most utility model patents are filed. In that article, we discussed in detail about the eligible subject-matter, term of protection, and the examination procedure of utility model patents in China. We mentioned that a utility model application only needs to go through a preliminary examination procedure before a notice of grant is issued. In the preliminary examination, the examiner may only point out “evident substantive defects” and the average time of prosecution for utility model patents is less than one year.
However, in the past year, many utility model applicants and patent practitioners noticed that obtaining a utility model patent has become more difficult than before. According to the data provided by a well-known patent firm in China: since 2017, the chance of a utility model application being rejected for lack of “novelty” increased to 4.5%, whereas this data was only 0.5% before 2017[1]. Besides, we also noticed a significant increase in the number of applications being rejected for not meeting the “disclosure requirement”. For example, in a utility model application comprising electrical circuits, if the connection among the circuit elements has not been clearly illustrated in the drawings or described in the written description, it is very likely that the examiner will consider the subject matter to be insufficiently disclosed, not meeting the requirement prescribed in Article 26, Paragraph 3 of the Patent Law, that “[t]he written description shall set forth the invention or utility model in a manner sufficiently clear and complete.”
An information source also indicated that the examination time of utility model applications will be extended to 7-14 months[2]. Despite not being officially confirmed by the State Intellectual Property Office (SIPO), this information has been somewhat proven in real practice. On one hand, there is a higher chance for a utility model application to receive an office action, which inevitably increases the examination time. On the other hand, even though no office action is received, there is still a trend that the examination time will increase. Compared to the 7-14 months mentioned above, according to IP5 Statistic Report 2015 edition, the average examination time released by SIPO for a utility model application is only 2.9 months[3].
Due to their higher grant rate and shorter examination time, utility model patents have long been popular among Chinese corporations. As a result, the number of filings of utility model applications kept increasing sharply during the past few years[4]. However, the lower standard of examination and the need by some corporations of obtaining patents to get national subsidy have fostered some low quality utility model patents. To solve this problem, in 2016, SIPO launched Plan for the Implementation of Patent Quality Improvement Project[5]. The Plan stated: “Establishing a supervising system for granting patents, that avoids wrongful granting and provides the public patents with clear protection scope and stable rights, is the key to the improvement of patent quality.” To implement the Plan, the Utility Model Examination Department has also launched Approach to Recommend and Assess High Value Utility Model Patents to encourage the applicants to file utility model applications with high quality. In our opinion, the increase in the difficulty of granting utility model applications is closely related to the series measures SIPO has issued to improve the quality of patents.
Despite the increase in the examination time and difficulty of granting, utility model applications nonetheless have an examination time much shorter than the invention patent applications, and the granting of utility model patents is also much easier than the invention patents. Thus, as long as the applicants guarantee a sufficient disclosure by providing high quality claims and written description, utility model patents in China will still remain a powerful commercial weapon.
[1] See http://www.lindapatent.com/cn/info_news/736.html
[2] See http://www.sohu.com/a/228869698_99968724
[3] See IP5 Statistics Report 2015 edition, available at http://www.sipo.gov.cn/docs/pub/old/tjxx/wjndbg/201704/P020170424624536904346.pdf
[4] See https://oshaliang.com/newsletter/petty-patents-around-the-world/
[5] See http://www.sipo.gov.cn/ztzl/zscqqgjs/mtkd/1109933.htm
