Development of China's Utility Model Patent System

State Intellectual Property Office of the P. R. China


Preface


Utility model patent system constitutes an important part of Chinese patent system. The purpose of the system is to protect small inventions and creations, which play an unique role in China's patent protection system.


Though starting at a comparatively late stage, China's utility model patent system has experienced rapid developments. The system is in compliance with the basic principles of the international conventions and consists with the practices of most countries.


The utility model patent system has made remarkable achievements in China. It promotes not only the implementation of the patent system, but also the economic, scientific and technological development of the country. Meanwhile, it also gives effective protection to foreign patented technologies and interests of foreign enterprises in China.


China attaches great attention to the quality of utility model patents and active measures have been taken for that purpose.


1. China's Utility Model Patent System Is Kept Improving


China's utility model patent system was established at the time when Chinese patent system was founded and it constituted an important part of the whole system. Since the implementation of Chinese Patent Law on April 1, 1985, it stated clearly that China provided protection for 3 kinds of inventions and creations including inventions, utility models and designs. Along with the improvement of Chinese Patent Law, China's utility model patent system also kept improving.


China's utility model patent system gives protection for small inventions and creations which complement the invention patent. The duration of protection for utility model is 10 years with the same legal effect as invention patent. The right holders can prevent others from any commercial use of the inventions which are protected by utility model without permission.


1.1 The Establishment and Development of China's Utility Model Patent System


When the system was firstly established, China was comparatively weak in capacity for science and technology innovation. The inventions and creations made by many SMEs were technically low, and the majority of the innovative outputs were small inventions and creations. Though these small inventions and creations were not as creative as invention patents in technological sense, they also contributed to the scientific technology advancement, economic and society development of the country and should be given appropriate protection. China's utility model patent system was set up to protect this kind of inventions and creations.


In 1985, the Implementing Regulations of the Chinese Patent Law prescribed that ¡°in patent law, ¡®utility model' means any new solutions relating to the shape, the structure, or the combination of a product, which is appliable for practical use.¡± According to the Patent Law in 1985, the duration of utility model patent was 5 years and could be extended for 3 years.


The revised Patent Law of 1992 further strengthened the protection of utility model, and its protection duration was extended to 10 years. At the same time, the renewal procedure of patent right was abolished. After this revision, the protection duration of utility model patent was in consistence with that commonly adopted by most countries.


The revised Patent Law since 2000 added utility model search report system targeting at novelty, inventiveness and applicability of the utility model after granting. This revision had taken full consideration of related principles in TRIPs agreement and provided a judicial remedy for utility model patent applicants and parties involved in disputes of patent right confirmation.


The revised Patent Law since 2008 allowed the same applicant to apply for a utility model patent and an invention patent with the same invention creation. The scope of preliminary examination was appropriately expanded and quality of patented utility models was further enhanced. Utility model search report was replaced by patent right evaluation report and the evaluation scope was enlarged.


In order to regulate utility model patentee's utilization of his right, the revised Patent Law prescribed that the people's courts or the administrative authorities might request the utility model patentee, who filed patent infringement case before them, to submit patent right evaluation report made by SIPO.


The revised Patent Law also introduced prior art defense system to patent infringement litigations. If the party charged with infringement could prove that the related technology implemented by himself was a prior art before the filling date, the court or the administrative authority could decide directly that the charges were not supported.


1.2 Features of China's Utility Model Patent Examination


China's utility model patent examination goes through two stages: preliminary examination and preliminary examination with evaluation (search) report. In accordance with Chinese patent law, utility model patent application can be granted a patent right if there is no reason for rejection was found during preliminary examination.


Preliminary examination system lasted from April 1985 to June 2001. Examination for utility model patents during the period included formal defects examination and obvious substantive defects examination. Formal defects examination consists of the completeness of application documents, fee payment, applicant's qualification, bibliographic data, requirements for publication and etc. Obvious substantive defects examination consists of subject matter as patentable, novelty, inventiveness, unity, the claims clarity and conciseness/support from the description, the description's clarity and completeness and etc. so as to ensure the quality of utility model patents.

 

Preliminary examination is stricter than formal examination system.


Preliminary examination with evaluation (search) report system was carried out since July of 2001, and it is the system in use today. In addition to the formal defects examination and the obvious substantive defects examination of the preliminary examination system, the utility model patent right evaluation report system was set up.

 

The report evaluates the stability of a utility model patent, compensates and perfects the preliminary examination system. Utility model patentees or stakeholders may request SIPO to make a utility model patent right evaluation report and give objective assessment to its stability. This can be used as an evidence of right stability when the people's court deals with patent infringement disputes.


2. China's Utility Model Patent System Is in Conformity with That of Most Countries


At present, there are 57 countries, regions or organizations implementing utility model system throughout the world. There is no specific international treaty for utility model except some general regulations in the Paris Convention. China's utility model patent system conforms to the principles like national treatment, independent protection and priority prescribed in the Paris Convention.


The fact of lacking a unified international treaty results in differences in protected subject matter, novelty, inventiveness and procedure for substantive examination among the countries with utility model system. China's utility model patent system though not completely the same with that of other countries, its practices are basically in conformity with the rest of the world.


Subject matter as patentable in China is basically the same with most of the countries.

 

Although countries (regions) give different names to utility model system, they share the objectives of protecting small inventions. Subject matter as patentable in most countries is limited to inventions in shape and structure of a product, device or apparatus, so as to define clearly the extent of protection for utility model and to facilitate infringement judgment and right utilization. China's utility model patent system provides the regulations on subject matter as patentable for the same purpose.


Like most countries, substantive examination is not carried out for utility model in China. Most of the countries adopt formal examination system instead of substantive examination for utility model. Substantive examination is only adopted in limited countries like Korea, Brazil and Poland. China implements preliminary examination system which contains obvious substantive defects examination plus formal defects examination and it is stricter than mere formal examination.


Patent right evaluation report system in China is in conformity with that in most countries. In most countries adopting formal examination to utility model, patentees or other stakeholders may request the patent authority to issue search report, documentation report and etc. China also established the patent right evaluation report system as an important supplement to the preliminary examination system.


Inventiveness standard in China is in conformity with that in most countries. Most of them apply a lower inventiveness standard for utility model than invention patent, while some countries even do not have any specific inventiveness requirement. The inventiveness standard of the utility model in China is that "¡­as compared with the prior art, ¡­the utility model has substantive features and progress". Although it is lower than that of the invention patent, namely "¡­the invention has prominent substantive features and represents a notable progress¡­", it still belongs to the common practices taken by most countries in the world.


Avoiding repetitive patenting to utility model in China is in conformity with that in most countries. Invention patent right and utility model patent right are not allowed to be granted to the same invention in most countries. China's patent law clearly defines that "for any identical invention creation, only one patent right shall be granted".


China's novelty standard for utility model is comparatively higher than most countries.

 

Most of the countries adopt relative novelty standard for utility model while China applies absolute novelty standard which is the same as invention patent.


3. China's Utility Model Patent System Made Remarkable Achievements  


China's utility model patent system not only gives incentives to the SMEs for creation but also promotes the implementation of the patent system in China. It facilitates the circulation of patented technology, contributes to economic development, science and technology progress. At the same time, it also gives effective protection to foreign patented technologies and interests of foreign enterprises in China. The present utility model patent system in China matches China's national development stage.


3.1 China's Utility Model Patent Applications Experienced Rapid Increase in Recent Years


In 1997, China's utility model patent applications surpassed 50,000, ranking No. 1 in the world for the first time. The utility model applications exceeded 200,000 in 2008, 300,000 in 2009, and 400,000 in 2010. In 2011, its applications reached 585,000, which was 42.9%increase over the previous year.


By 2000, China's applications for utility model patent accounted for 42%  of the world's total. With the sharp growth of China's utility model applications, it accounted for 83% of the world's total by 2010.


In 2011, SIPO granted in total 408,000 utility model patents, which were 18.6% growth over the previous year. By the end of 2011, the valid utility model patents granted by SIPO were 1,121,000.


Despite of the rapid growth and the large quantity of China's utility model patent applications, the per capital number of utility model applications in China is not high. In 2011, China's utility model patent applications per 10,000 persons only reached 4.5, which was much lower than that of Germany, Japan and Korea's historical peak.

 

Germany's utility model patent applications were about 7 per 10,000 persons in the mid 1970s. Japan's utility model patent applications per 10,000 persons were nearly 17 in the mid 1980s. The figure for Korea was about 14 in the mid and late 1990s. It is estimated that in the near future, China's utility model patent applications will still keep a relatively high growth rate.


3.2 China's Utility Model Patents Enjoy Good Stability


According to statistics, the Patent Reexamination Board of SIPO received 10,044 requests for invalidation of utility model patents between 2010 and 2011. In the same time, the number of granted utility model patents was 1,667,000. The requests for invalidation of utility model patents only took 0.60% of the total granted utility model patents. Among 9,532 requests for invalidation of utility model patents closed from 2002 to 2011, complete invalidations and partial invalidations accounted for 35.60% and 11.80% respectively. The invalid utility model patents were only 0.27% of the total granted utility model patents in the same time period. This showed clearly that China's utility model patents have good quality and stability.


In the last ten years, the proportion of the requests for invalidation of utility model patents to the granted utility model patents showed obvious decrease. In 2002, the number of invalidation request for utility model patents was 756, accounting for 1.31% of the year's granted utility model patents (57,484). In 2011, the number of invalidation requests for utility model patents was 1,323, accounting for only 0.32% of the year's granted utility model patents (408,110). The figure indicated that the quality of China's utility model patents was improving and China's utility model patent system was operating soundly.


3.3 China's Utility Model Patent System Effectively Protects Foreign Patented Technologies in China


In recent years, the amount of foreign applications for utility model patents in China is increasing rapidly. There were 4,164 utility model applications in 2011, which was 3.1 times of the year 2007. Those applications were from 58 countries and regions, and the top six countries were Japan, the United States, Germany, Korea, Switzerland and France. Among them, the applications from Japan and the United States made up nearly one-third and one-fourth of the total respectively. In 2011, the applications for utility model patents from Japan, the United States, Germany, Switzerland and France all experienced an obvious increase, which was 167%, 20.6%, 79.6%, 136.4% and 190.2% respectively comparing with the year 2010.


The top 10 applicants of foreign applications for utility model patents in 2011 in China were all big and famous multinational enterprises, which mainly came from the United States and Japan. In fact, those enterprises not only filed applications in their parent companies' name but also their subsidiaries, independent corporations and joint venture companies. Among these companies, Apple's applications for utility model patents grew by 268% over the same period of last year.


3.4 China's Utility Model Patent System Gives Incentives to the SMEs Creation


China has a large number of SMEs, in which many researchers and even decision makers do not have much knowledge of the complicated patent system. The utility model examination in China adopts preliminary examination system which simplifies the examination procedures, shortens the examination period and reduces the application expenses, and thus introduces patent system to many SMEs.


Suzhou Touchstone International Medical Science Co., Ltd. is a high-tech company which emphasizes medical technology R&D, innovation and production. Its main products are mid and high end surgical operating instruments which are exported to various countries in Europe and North America. The company owns 297 utility model patents. Its most representative utility model patent¡ª"surgical binding instrument rotary cutter head" completely changed the traditional design of stapler. It eased the strict requirements for materials and manufacture, reduced operation costs and improved the reliability and success rate of surgery.


Suzhou Haixin Mechanical & Electrical Equipment Co., Ltd. has been devoted to researching and producing anti-static products. The company insists in technology innovation and focuses on indigenous IP development and protection. The company now owns over 50 utility model patents. After nine years' efforts, it gradually forms a large-scale production base for anti-static equipments and provides high quality services to the world at affordable prices through internet. It is the designated supplier of some famous companies such as KONICA MINOLTA, SONY, and NIKON.


China has a lot of technology-oriented SMEs like Suzhou Touchstone and Haixin who protect their technological innovations and strengthen their market competitiveness effectively by utility model patents. Utility model patents provide powerful protection for a company's innovation during its starting -up stage and paves the way for company's future development.


3.5 China's Utility Model Patent System Greatly Promotes Patented Technology Transfer


Comparing with invention patent, utility model patent is relatively simple and easier to implement. The cost of buying a utility model patent or obtaining its exclusive right or sole license for exploitation is cheap and more acceptable for SMEs. Moreover, utility model examination period is shorter and thus get right granted faster. This implies that it can make the technology be known to the public and ushers it into the technology trade channel within the shortest time.


According to investigations, by the end of 2011, the valid utility model patents that maintained for more than 3 years account for 52.8% of the total, among which 12.9%maintained for over 6 years. From 2006 to 2010, the implementation rate of utility model patent was above 60%. Among the implemented utility model patents, the percentage of self-implementation by the patentees was over 90%. The long maintenance period and the relative high rate of implementation indicate that utility model patents not only contain comparatively high technology but also play an important role in promoting economic prosperity.


Most of China's utility model patents have been utilized in real manufacturing and the implementation rate of utility model patents is higher than that of invention patents (less than 60%).


3.6 The Utility Model Patent System Matches China's Current Development


The utility model patent system has made remarkable achievements in China because China introduced advanced foreign experiences based on its practical situation. The history of IP systems development in the world proves that IP system can only promote science and technology innovation and economic growth when it matches a country's development level and continuously adapts to the future development.


Since the introduction of reform and opening up policy, China has made great economic developments, and significantly enhanced its innovative capability in science and technology. At present, China is committed to establish an innovative country and promote the transformation from factor-driving to innovation-driving. It regards enhancing indigenous innovation capacity as the core issue for changing economy development mode and adjusting economic structure, so as to steadily improve China's innovative capability in science and technology.


However, as a developing country, China is still low in general innovative capacity. It is a learning country of big gap with the developed countries. The present innovative activities in China are mainly surrounding innovation, simple technology improvements and re-innovations. Most indigenous technologies are the results of improvements or transplants of the existing technologies or related technologies. The market life of those technologies is often short and their technology level is relatively low. Therefore, the utility model patent system is still one of the important IP systems to encourage invention-creations and promote economic developments in China.


Applying for utility model patents has become an important means of SMEs in implementing IP strategy and promoting indigenous innovations. More and more SMEs in China are taking utility model patent application as an important approach to own their indigenous IP rights. Utility model patents are becoming their important intangible assets and a useful tool for SMEs to participate in market competition.


4. China is Making Efforts to Improve the Quality of Utility Model Patents   


China has been attaching great importance to the quality of utility model patents. The revised patent law further raised the standard of granting utility model patents, providing the legal support for improving its quality.


In recent years, SIPO has also taken effective measures to constantly improve the examination quality management system and the quality of utility model patents while adhering to the principle of examination in accordance with the law.


(1) Establish and complete an office department division three level examination quality management system to further strengthen internal management such as target management and process control. The office adopts effective measures to ensure the consistency of utility model patent examination standard.


(2) Reinforce the momentum to crack down the abnormal patent applications as plagiarism of prior art and repetitive applications, and strengthen the examination for those low-quality utility model patent applications which are obviously lack of novelty or belong to repetitive patenting.


(3) Carry out endorsement system by division director (director general) of the examination department. The notifications regarding obvious substantive defects of utility model patent applications have to be reviewed and issued by division director (director general).


(4) Set up external patent examination quality feedback system, collecting opinions through website, hotline, emails and letters, and accepting public supervision and complaints relating to patents examination work including utility model patent examination.


Conclusion


In the past over 20 years, the utility model patent system has been developed and improved continuously and remarkable achievements have been made. However, the history of the system is short and there is still room for further improvement.


For a long period in the future, continuing to implement the utility model patent system will be a practical choice of China based on its national situation. We believe that the utility model patent system in China will keep improving with the development of the country's economic and social developments and its enhancement of innovative capacity.


China will, as always, strengthen the examination for utility model and enhance the quality of related patents in accordance with the law. In the meantime, China will earnestly perform its obligations according to international IP treaties and conventions, strengthen IP international cooperation and contribute to a more balanced and efficient development of utility model patent system globally.

 

(The end)

2013-01-05