On March 5, the China National Intellectual Property Administration (CNIPA) issued key points for its goals in 2020, which were reiterated in a recent May newsletter. One of the main focus points is patent quality and how the office will take several measures in line with this new objective. For example, patent examination will be streamlined by reducing the review time for high-value patents to less than 16 months while subsidies and reward systems to file high volumes of patents will be abolished. How will foreign patent filers be affected by these changes?
- Patent examination
As mentioned above, examination times will likely be reduced. As an immediate consequence of this, we have noticed already that more office actions are being issued by the examiners recently to reduce examination times. Also, examiner responses to answers to office actions appear to be returning faster. This is certainly beneficial for industries looking for faster grants. In this regard it is worth noting that the strategic points raised further foresee efficiency gains when using expedited examination paths such as the patent prosecution highway or previously created fast-tracks (see previous article: China releases new Administrative Measures for Prioritized Examination of Patent Applications). For applicants that do not wish to proceed with increased speed, a deferment of examination of up to three years can still be requested at the time of requesting for substantial examination.
It can further be expected that the hurdle for patentability will be increased. Examiners already appear to use stricter novelty and inventiveness standards during examination. To facilitate and accelerate the examination, CNIPA also encourages direct communication between examiners and applicants’ agents (e.g. telephone calls). Unfortunately the increase in activity of the patent office may come at a challenging time for applicants in view of the many cost-saving initiatives of applicants in certain industries during the COVID-19 situation in their country. The higher number of office actions seen in the past few months will force applicants to decide now whether or not to proceed with a filing. There is certainly the risk for companies to lose their competitive edge should patent portfolios be thinned to the extent that that the future value of their portfolio in more prosperous times will be lost.
- Patent opinions and freedom-to-operate analysis
The abolishment of subsidies and reward programs is a fundamental turnaround in policy. There is a clear focus to prevent filings that are done for purposes other than to generate valuable IP rights. A crack down on the malicious registration and stock-piling of abnormal patent applications is specifically mentioned in the May newsletter. This will certainly mean that patents already granted will be facing more scrutiny and that invalidations may lead to higher rates of revocation. This is an important factor for risk analysis in freedom-to-operate analysis as the risk to be threatened with malicious low-quality patent filings may significantly be reduced and invalidation success will become more predictable. In patent opinions, a higher focus on validity checks of any patent of hindrance appears to be worth the effort to undertake.
The May newsletter also clearly states that it is “absolutely forbidden to simply assess the amount of patent applications” as an evaluation standard for scientists and universities. The same thought process will likely be applied to companies in the same way thus slowing the current flood of low-quality patents in the market. Efforts to create low value patents en masse utilizing dubious filing activities may even come to be punishable. It can also then be assumed that clearance analysis will be easier in the future due to the absence of long lists of results during patent searches that all need to be evaluated. If this approach is successful, business operators will face less risk in the China market.
The newsletter mentions many other key initiatives and targets in trademark and patent policies which we will investigate in further publications once we have more detailed information. It is noteworthy that CNIPA also started the task of implementing the objectives of the intellectual property chapter of the first phase of the China US economic and trade agreement mentioned in our previous article.
For more updated information or questions you can contact our Beijing office team.