Are Your Chinese Patents At Risk?

Grounds for Invalidation

Under Article 45 of the PRC Patent Law(中华人民共和国专利法), any entity or individual who considers the grant of a patent to be contrary to relevant provisions of the law may request the Chinese Patent Re-examination Board (PRB), which has sole jurisdiction over patent validity issues, to declare the patent invalid. The grounds for filing a petition for invalidation of a patent are the following: unprotectable subject matter; double patenting; unpatentability; insufficient disclosure; lack of support; indefiniteness; lack of essential technical features; and amendment going beyond original scope of disclosure.

While it is possible to file an invalidation petition based upon any one of these grounds, it is most common that a petition is filed on the grounds of unpatentability, insufficient disclosure, and/or amendment going beyond the original scope of disclosure. The likelihood of a petition being accepted by the PRB based on such grounds is substantially higher than that based on other grounds.

Overview of Proceedings

After an invalidation petition is filed, the PRB conducts a formal examination. The PRB then forwards a copy of the petition to the patentee and invites the patentee to respond within a prescribed time limit. After the expiration of the responding period, the PRB may arrive at a decision of the invalidation based on the petition, as well as the response filed by the patentee, if any.

Nevertheless, in most cases an oral hearing will be set, either by a written request of the interested party or by the ex officio determination of the PRB. During the oral hearing, the PRB may question the interested parties and witnesses and ask them to explain any evidence or fact at issue, and each interested party may present its arguments. After the conclusion of the oral hearing, the PRB begins deliberation. The PRB may declare the patent invalid in whole or in part or uphold its validity in its entirety.

The decision of the PRB is subject to judicial review. Appeal of the PRB decision can be taken to the first Intermediate People's Court of Beijing, which has jurisdiction over lawsuits against the PRB and is entitled to review the decision of the PRB de novo.

Claim Amendments

During invalidation proceedings, the patentee of an invention or utility model patent, i.e., the respondent, cannot amend the specification of the patent but has an opportunity to make voluntary amendments to the claims. However, permissible amendments in invalidation proceedings for an invention or utility model patent are limited to: (a) cancelling one or more claims; (b) combining one or more claims; and (c) deletion of one or more members in a Markush group (a chemical structure formula comprising of multiple selectable elements / members). Moreover, amendment by combining claims is permissible only when the combination results in a narrower scope. In contrast to an invention or utility model patent, the patentee of a design patent is not permitted to make any amendments to the patent.

Evidentiary Issues

Permissible evidence in an invalidation proceeding includes documentary, physical or audiovisual evidence, oral testimony of a witness, statements of interested parties, conclusions of experts, and records of on-site investigations and examinations. In practice, the PRB relies almost exclusively on documentary evidence in deciding invalidation cases. Oral evidence is rarely relied upon. In addition, all evidence must be verified and authenticated by the PRB before it can be relied upon in the validity determination.

Evidence in a foreign language may be used in invalidation proceedings. A Chinese translation should be filed when the foreign language evidence is submitted or within a time limit prescribed by the PRB.

Conclusion

With the recent success of Chinese domestic companies against multinationals in patent invalidation proceedings, one can expect patent challenges to intensify. Notwithstanding the political rhetoric about China's lack of IP protection, it has strengthened its patent system significantly in recent years. Therefore, multinational companies facing patent challenges in China should not operate under the mistaken assumption that foreign companies cannot win in Chinese courts and agencies. However, winning a legal battle in China requires more than the will to succeed. As Sun Tzu, the master of the art of war in ancient China, taught: "Know your enemy, know yourself, fight a hundred battles, win a hundred battles."