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General Patent Term Compensation in China: Development and Implementation

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The fourth amended Patent Law of China came into force on June 1, 2021. The new law has added two new provisions relating to patent term compensation in Article 42.  These two new provisions introduce “general patent term compensation” and “pharmaceutical patent term compensation” which correspond to PTA (Patent Term Adjustment) and PTE (Patent Term Extension) of the U.S. patent practice, respectively.  This article discusses and provides practical suggestion on the implementation of “General Patent Term Compensation.”


     Article 42 (2) provides that if an invention patent is granted after four years from the date of filing the patent application and three years from the date of requesting substantive examination, the patent administration department under the State Council shall, at the request of the patentee, compensate the patent term for unreasonable delays during the prosecution of the invention patent, unless the unreasonable delays were caused by the applicant.

     The specific criteria and requirements of the general patent term compensation still need to be stipulated in detail by amending the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination.  Now after one year has passed since the newPatent Law became effective, the amendments to the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination have not yet been done. Nevertheless, to protect patent rights and the best interests of patentees, it is advisable that if a granted patent meets the requirements set forth in Article 42 (2) of the Patent Law, the patentee should strategically submit a request for patent term compensation even before the amendments to the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination are completed.

     First, the patentee needs to timely submit a request for patent term compensation within three months from the date of publishing the issuance of the patent.  The China National Intellectual Property Administration (CNIPA) has set forth in Article 5 of the Interim Measures for Handling Examination with respect to the Implementation of the Amended Patent Law (hereinafter referred to as the Interim Measures) regarding the implementation of patent term compensation during the transitional period (i.e. before the amendments to the Implementing Regulations of the Patent Law take effect): “For invention patents granted from June 1, 2021, the patentee may, in accordance with Article 42 (2) of the amended Patent Law, submit a request for patent term compensation in paper form within three months from the date of publishing the issuance of the patent and pay the relevant fees later in accordance with the subsequent notice of payment issued by the CNIPA.  The CNIPA will review the request after the amended Implementation Regulations of the Patent Law is adopted and comes into effect.”

     Therefore, to determine whether a patent is eligible to submit a request for patent term compensation, it is necessary to calculate whether the patent meets two conditions. Nevertheless, since the amendments to the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination are still ongoing, there are different understandings and interpretations to the Patent Law’s two conditions among patent practitioners. The two conditions are as follows:

     Condition 1: “four years” from the filing date to the date of publishing the issuance of the patent

     The term “filing date” may have different meanings under different circumstances.  As far as patent term compensation is concerned, it is generally agreed that the filing date for patent applications first filed in China is the actual filing date on which the application is filed with the CNIPA.  However, for divisional applications and PCT applications in China national phase, things become a little bit complicated and controversial.

     The draft amendments to the Guidelines for Patent Examination for public comments propose that the filing date of PCT applications in China national phase is the date of entry into China national phase, and the filing date of divisional applications is the date of actually filing the divisional applications. The reason for this proposition is that the examination process only begins after a PCT application in China national phase or a divisional application is filed with the CNIPA.  This proposition seems consistent with the U.S. patent practice (See 35 U.S.C. Section 154 (b)(1)(B)).

     However, such a proposed interpretation has raised controversy because it may be disadvantageous to the patentees, specifically in view that the 20-year term of a Chinese patent based on the national phase of the PCT application is calculated from the filing date of the PCT international application, and the 20-year term of a patent based on a divisional application is calculated from the filing date of the parent application. Consequently, some practitioners propose that concerning the patent term compensation, the filing date of the PCT application in China national phase and the filing date of the divisional application should be interpreted as the “filing date of the PCT international application” and the “filing date of the corresponding parent application” respectively, so as to be consistent with the definition of the filing date set forth in Article 42 (1) of the Patent Law.

     In view of such controversy and uncertainty, it is advisable that before the draft amendments to the Implementation Regulations of the Patent Law and the Guidelines for Patent Examination are finalized, the approach to pursue the best interests of patentees may be to go with the latter interpretation, that is, to calculate the “four years” from the filing date of the PCT international application for a China national phase application and the filing date of the parent application for a divisional application.

     Condition 2: “Three years” from the date of requesting substantive examination to the date of publishing issuance of the patent

     It is generally agreed that the date of requesting substantive examination shall be the date of filing the request for substantive examination and payment of the substantive examination fee.  However, the draft amendments of the Guidelines for Patent Examination propose that, with regard to the patent term compensation, the date of requesting substantive examination shall be the effective date of the request for substantive examination, which is the date of the official notice of entry into the substantive examination stage being issued. The reason for this proposition is that, due to the principle under China’s patent practice of “first to publish and then to examine” for an invention patent application, in the absence of early publication, the effective date of the request for substantive examination will fall after 18 months of the filing date, and the substantive examination will not begin until 18 months later.  This draft amendment is obviously disadvantageous to the patentees.

     Comparing with the U.S. patent practice, the examination period under 35 U.S.C. Section 154 (b)(1)(B) begins to run from the date of filing the application because patent examination in the U.S. is automatically initiated by the patent office without a separate request by the applicant, and the examination can start before publication.  In other words, the filing date of an application in the U.S. is the date of requesting substantive examination.

     Similarly, to pursue the best interests of patentees, before the draft amendments to the Implementation Regulations of the Patent Law and the Guidelines for Patent Examination are finalized, it is suggested calculating the “three years” in the more advantageous way, i.e., to interpret the date of requesting substantive examination with respect to patent term compensation as “the date of filing the request for substantive examination and payment of the substantive examination fee” which is consistent with the definition under the Patent Law.

     Finally, regarding calculation of the compensation period, according to the new Article 42 (2) of the Patent Law, it is worth noting that the calculation of the general patent term compensation shall exclude the unreasonable delay caused by the applicant.  The draft amendments to the Guidelines for Patent Examination list five types of possible unreasonable delays caused by the applicant, namely: (1) delays caused by the applicant’s request for extension of time, (2) requests for restoration of rights, (3) requests for delay in examination, (4) delays caused by invoking incorporation by reference, and (5) delays caused by early entry into China without requesting early processing.  In addition, the draft amendments to the Guidelines for Patent Examination also lists four types of delays which are not unreasonable, namely: (1) suspension proceedings, (2) preservation measures, (3) administrative litigation, and (4) reexamination proceedings where the patent application is allowed after amending the application documents.  However, the definition of “unreasonable delays caused by the applicant” and how to deduct the time from the compensated patent term will only be clear after the promulgation of the amendments to the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination.

     In sum, in order to protect the best interests of patentees, we suggest that it will be a good practice to request general patent term compensations according to the broad interpretation to Article 42 (2) of the Patent Law during the transitional period before the draft amendments to the Implementation Regulations of the Patent Law and the Guidelines for Patent Examination are finalized. The relevant provisions on “general patent term compensation” should be interpreted in favor of the patentee in accordance with the above-mentioned criteria. 

     For granted patents that meet the above-mentioned "four years" and "three years" conditions, the patent term compensation request should be filed within three months from the date of publishing the issuance of the patent, so as to avoid losing the opportunity to make the request. In the meantime, it should also be noted that since calculation of the compensated days and the definition of “unreasonable delay caused by the applicant” may be interpreted and stipulated differently in the final draft of the amendments to the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination, even though the request has been timely submitted, the patentees should be prepared for the uncertain outcome in terms of whether the request for compensation of patent term will be approved and how many compensation days can be obtained.

      OBWB China team will continue to monitor and report any further developments of the draft amendments to the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination.