Strategies for Filing Patents in China  

POSTED BY Bruce Story and Nathan Doudera AT 2:28 P.M. August 29, 2012

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This post is a follow-up to a previous post Should I File Patents in China?  

In Should I File Patents in China? we discussed the indecisiveness that companies often experience when deciding whether to file patents in China. We suggested five key issues that should always be considered when making a decision on foreign filing of IP, namely:

  1. Presence of competitors selling, making or licensing
  2. Size of relevant market
  3. Ability to enforce
  4. Future trends
  5. Firewalling

For companies that answer these questions and determine that it makes sense for them to file patents in China, there are additional considerations and strategies on how to file patents in China.

As mentioned in Should I File Patents in China? China has three different kinds of patents: Utility Model, Design, and Invention. A large part of determining a strategy for filing patents in China is selecting between Utility Model and Invention patents.

What are the differences between Utility Model and Invention patents?

The key points of difference between Utility Model and Invention patents are term of protection, time to publication, examination requirements, and fees.

 

Invention Patent

Utility Model Patent

Term of Protection

20 years

10 Years

Time to Publication

18 months after filing

Upon grant of patent

Substantive Examination

Within 3 years of filing date

No substantive examination

Fees

Application and Publication: 950 RMB
Substantive Examination: 2,500 RMB
Re-examination: 1,000 RMB

Application and Publication: 500 RMB
Substantive Examination: None
Re-examination: 300 RMB

Adapted from: “Patenting Landscape in China”, Published May, 2008, Evaluserve

While Utility Model patents have half the term of protection of Invention patents, they are much less expensive, do not require a substantive examination, and are granted in a much shorter period of time.

Interestingly, the balance between Invention and Utility Model patents is very different between domestic (Chinese) companies and foreign companies. In 2011, domestic companies filled 38% of patent applications in the form of Utility Model patents, and 28% in the form of Invention patentsi. For foreign patent applications, just 3% came as Utility Model patents, and 86% came as invention patentii. The remainder in each case was filed as design patents.

Why do domestic companies predominantly choose Utility Model patents, and why do foreign companies overwhelmingly choose Invention patents?

For many Chinese companies the main driver towards Utility Model patents is cost. They are looking for the most inexpensive way to protect their inventions, and Utility Model patents are considerably less expensive. A second driver is time to issue. Some reports suggest that upwards of 50% of patents in China are filed for litigation purposesiii. The quicker a patent is issued the quicker it can be asserted in court.

For foreign companies the main driver towards invention patents is quality of protection. Cost is less of a consideration for large multinationals that represent the bulk of foreign filed patents in China. While the Invention patent does afford a longer term of protection, it does not intrinsically provide a higher level of protection. In fact, Utility Models offer a comparable quality of protection, albeit for a shorter term. Additionally, Utility Model patents do not have to be examined, and thus are granted much sooner than Invention patents, offering a faster route to protection.

What is the best strategy to protect IP in China?

For a comprehensive IP strategy, foreign companies should not just look at the term of protection and assume that Invention patents offer all the protection they need. Companies should use the full range of IP protections including not just patents but also trade secrets and know-how, black boxes, and defensive publications.

For patents specifically, the best IP strategy for China balances the use of both Utility Model and Invention patents. Some companies have found it can be advantageous to file both a Utility Model patent and an Invention patent for the same technology. While both cannot be granted, the Utility Model patent provides early protection while the Invention patent is being examined, and can be abandoned when the Invention patent is granted.

 


ii ibid

iii ibid


TAGS: Bruce Story | IAM | Nathan Doudera | Process | Strategy | China