Saturday, January 5, 2013

What’s patent eligible and what’s not: patent eligible subject matter comparison – China

As a national strategy, China is trying to move from being a world manufacturing factory to being an innovation leader.  Since the introduction of the “Law of the People’s Republic of China on Progress of Science and Technology” in 2008, China has made staggering progress toward promoting the scientific and technological innovations, which is evidenced by dramatic increase of patent filings by Chinese nationals in China and abroad in the past several years.

In 2009, approximately 300,000 applications were filed in China with about equal number of utility patents and inventions patents.  In 2011, according to the World Intellectual Property Indicators 2012 published by WIPO, China’s State Intellectual Property Office (SIPO) received 526,412 applications overtaking the United States Patent and Trademark Office (USPTO) to become the largest patent office in the world.  In comparison, USPTO received 503,582 applications and JPO received 342,610 applications. 

There is no sign that the patent filing in China is slowing down.  Since 2008, China has introduced an array of incentives including cash bonuses, better housing for individual filers and tax breaks for companies that are prolific patent producers to encourage domestic and foreign patent filings.  According to the “National Patent Development Strategy (2011-2020)” published in November 2012 by SIPO, China’s goal for annual patent filings by 2015 is two million.

The patent filing in China by foreign applicants has also seen steady increase.  The reasons are twofold.  First, China is the most populous country in the world, which implies a big consumer market.  Second, a large and inexpensive talent pool in China coupled with the increased recognition to IP rights have accelerated R&D outsourcing to China by foreign companies. 

Obtaining patent protection in China is becoming an important corporate IP strategy.  Therefore, it is important for companies and inventors to familiarize themselves with the basics of Chinese patent law.  Understanding the patent eligible subject matter under Chinese patent law is a necessary first step.

There are three types of patents in China: invention, utility model, and design.  According to the Article 2 of the Patent Law of the People's Republic of China, invention-creations mean inventions, utility models and designs.  The invention patent is similar to the utility patent in US.  The design patent is similar to the design patent in US.  There is no US equivalent of utility model patent.

Similar to US, China grants patents to products (including both manufactures and compositions), devices, and methods or processes.  According to the Article 2 of the Chinese patent law, inventions mean new technical solutions proposed for a product, a process or the improvement of those; utility models mean new technical solutions proposed for the shape and structure of a product, or the combination thereof, which are fit for practical use; and designs mean, with respect to a product, new designs of the shape, pattern, or the combination thereof, or the combination of the color with shape and pattern, which are rich in an aesthetic appeal and are fit for industrial application.  Examples of patent eligible subject matter include mechanic devices, systems, surgical tools, implants, diagnostics tools, new chemical compounds, isolated genes (including human genes), pharmaceutical compositions, nontherapeutic cosmetic hair treatment methods such as giving permanent waves or dyeing, methods of sterilization that are not directly practiced on the animal or human body, methods of treatment and preservation of corpses, methods of measuring physiological parameters solely for the purpose of perfecting a medical instrument, etc.

Invention-creations that violate the law or social ethics, or harm public interests are not patent eligible according to Article 5 of the Chinese patent law.   For example, in biotech field, cloning of human beings, commercial use of human embryos and human embryo stem cells and their preparation are not patentable as they are considered to contravene social ethics.

China does not grant patents on inventions that are accomplished by relying on genetic resources that are obtained or used in violation of the provisions of laws and administrative regulations. (See, Article 5.)  This law protecting the generic resource in China was introduced by the Third Amendment of the Patent Law in 2008 in response to several high profile exploitations of Chinese genetic resource materials by both foreign academics and foreign companies in the early 2000s.  The term “genetic resources” refers to any materials of human, animal, plant, microbial or other origin contain functional units of heredity and having actual or potential value.  The term “inventions that are accomplished by relying on genetic resources” means inventions which are accomplished by exploiting the hereditary function of the genetic resources.  When an applicant claims an invention that is accomplished by relying on a genetic resource, the applicant must indicate the direct and original sources of the genetic resource in a special form for disclosure of genetic resource.  The form can be filed either with the filing of the application or during the prosecution.  The direct source must be provided.  However, if the original source is unknown to the applicant, the requirement for the original source may be exempted with an explanation from the applicant as to why she has no knowledge of the original source.

Similar to US, China does not allow patents on scientific discoveries, law of nature, physical phenomena, abstract idea, mental process, and mathematical algorithms and formula. (See, Article 25.)  Therefore, the discoveries, such as electricity, electromagnetic signal, light, relativity theory, string theory, or the first law of thermodynamics, are patent ineligible in both countries.

Rules and methods for intellectual activities and methods for the diagnosis or treatment of diseases are not patent eligible in China.  This differs significantly from the US law.  Specifically, business method, which is a hotly debated topic in US, is not patentable in China.  Regarding methods of treatment and diagnosis, these subject matters are not patent eligible: dosing regiments, immunization schedules, methods for determining risk of illness, methods for preventing diseases, assays or tests directly leading to diagnosis such as endoscopic and ultrasonic methods, gene screening diagnosis, acupuncture, radiotherapy such as prophylactic treatment, immunization schedule, methods of treating wounds, methods of contraception, artificial insemination, and embryo transfer.  However, these exclusions do not apply to methods not directly applied on the body. For example, methods of treatment and diagnosis applied to tissue and other biological materials isolated and separated from the body are patentable subject matter. Methods of analysis, treatment, and data collection as applied to the body for purposes that are not disease related are also allowed, as are products and compounds used for treatment and diagnosis of diseases.  Another exception is the first and second medical use inventions written in Swiss-type claim format such as "Use of substance X in the manufacture of a pharmaceutical drug for the treatment of disease or condition Y", which is patent eligiblee in China.

Animal and plant varieties are not patent eligible in China. This exclusion is mainly directed toward organisms, so the non-biological processes used for producing animal and plant varieties remain patent eligible.  The term “animals and plant” includes not only common definition of animals and plants but also transgenic or bioengineered animals and plants and living materials capable of developing into animals and plants.  The exception is microorganism including bacteria, fungus, and virus.  Microorganism isolated as a pure culture is patent eligible in China. 

China also does not allow patent on methods of nuclear transformation and substances obtained by means of nuclear transformation. “Methods of nuclear transformation” refers to the process of one or more nuclear things forming one or more new nuclear things through segmentation or polymerization, such as methods of magnetic mirror traps and close traps for realizing the nuclear fusion reaction and methods for realizing nuclear fission by various reactors.  However, the particle acceleration methods are included in this definition, which is therefore patent eligible.  “The substances obtained by nuclear transformation” primarily refer to various radioisotopes manufactured and produced by accelerator, reactor or other nuclear reaction apparatus.  Such isotopes are patent ineligible.  

There are significant overlaps on patent eligible subject matters between US and Chinese patent law.  However, as summarized above, there are subject matters that are patent eligible in US but not in China.  However, clever claim drafting can emolliate some of these restrictions.    

Thanks for reading.

Connie


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