Opinion: How to assess patent quality

Unfortunately for the IP industry, there is no single accepted or consistent measure for patent quality. Some refer to Chinese utility models as “low quality” because they are not examined, while others also include Chinese design patents as well. Others define low quality or junk patents to encompass all Chinese invention patents, utility models and design patents. However, a lack of in-depth analysis risks dismissal of the entire Chinese patent system as being low quality or junk; such a basic stereotype is a grave mistake.

The subjectivity of quality

Probably all Chinese patent practitioners have encountered cases where a utility model or design appears identical to something in the prior art (in existence before the filling date). I recall one case in which I reviewed no less than seven identical design patents from different applicants; all filed with a few months of each other and all from the same town. Are these the perfect examples of low-quality or junk patents Many would answer yes.

However, this is based on the assumption that a patent that lacks novelty must be a junk or low-quality patent. Foreigners tend to presuppose that the filing of a patent is to protect a new technology or product. However, this may not always be the case in China. Instead, assuming that the filer is a rational actor, and is even aware of the lack of novelty, this raises the question: why would they spend the money to file this alleged “piece of junk”

Perhaps the applicant never intended to assert the patent, which renders the novelty of the patent application irrelevant. For example, it may merely be desired for marketing reasons. Many companies place patent numbers on their packages so consumers believe that the product contains high technology. Alternatively, in China, a tax benefit may accrue if a certain percentage of a company's products are covered by a patent. Academics may file patents to help gain tenure. Finally, the patent may be filed for political purposes. Chinese cities and provinces are ranked according to the number and type of patent applications filed by their residents. By filing many applications (of which costs are often supported by the government), companies gain face for themselves and the local politicians.

The mere filing of an application may already have achieved the goal, and enforcement may be an afterthought, or even undesirable. While many would label such applications as junk or low quality, since they are likely to be invalid and possess no technical merit, such a view is myopic, ignoring the possibility that the act of filing may have already served its business purpose.

The highest patent award ever in China was for US$44 million, over a utility model in Chint vs Schneider Electric (Wenzhou Intermediate People's Court, 2007). Was this a low quality patent While some would argue yes, based on the prior art, others would argue the opposite. A December 2009 article in Les Nouvelles indicates the utility model withstood an invalidation challenge and appeal, thus the ROI was more than 620,000 times the US$70 filing fee.

Not all Chinese designs and utility models lack novelty, are of low quality, or are junk. In fact, certain very smart Chinese and foreign companies apply for high-quality Chinese utility model or design patents because they are relatively cheap and quickly granted. In a very fast product cycle, utility models and designs granted within one year may be more desirable than an invention patent which is granted in two to five years. Utility models and design patents are perfect for protecting a few narrow, highly-preferred embodiments. Also, in an unintended twist, due to the lower creative/inventive step threshold, a barely novel Chinese utility model is arguably harder to invalidate than a comparable Chinese invention patent; maybe a barely-novel Chinese utility model is of a higher quality than a comparable invention patent

Quality vs quantity

Chinese entities are already shifting from filing utility models to filing more invention patents – partly due to the shifting of tax incentives and political goals. At the same time, increasing numbers of domestic companies and a few foreign companies are recognising the advantages of the utility model system, and are filing both novel and inventive applications. This indicates that the overall quality of Chinese utility models should gradually increase over time.

Utility models and design patents can complement other types of intellectual property as part of a comprehensive IP portfolio. Companies that understand this will continue to file high quality Chinese design patents and utility models while taking advantage of the lower costs to help manage the budget.


Michael Lin, Marks&Clerk, Hong Kong


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