Christopher Shaowei
Published on December 21, 2023, and effective from January 20, 2024, the recently revised implementation regulations of China's Patent Law (referred to as the New Regulations) introduce Article 11, underscoring the importance of adhering to the principle of good faith in patent practice. It emphasizes that "patent applications should adhere to the principle of good faith. All types of patent applications must be made based on genuine inventive activities and should not involve falsehoods." The New Regulations explicitly incorporate this principle as a specific legal basis for the preliminary examination, substantive examination, and patent invalidation procedures (Articles 50, 59, and 69, respectively). These provisions underscore the Chinese government's commitment to combating dishonest practices in patent practices.
Furthermore, Article 100 of the New Regulations outlines administrative penalties for violations of Article 11, stating that "applicants or patentees found in violation of Article 11 shall receive a warning from the patent enforcement department at or above the county level and may face fines of up to RMB 100,000."
While Article 11 specifies the principle of good faith as being based on "genuine inventive activities and not involving falsehoods," it remains somewhat general. To address this, another administrative regulation, the "Regulations on Regularizing Patent Application Behaviors" (referred to as the Behavior Regulations), was released on the same day by the Chinese National Intellectual Property Administration (CNIPA). Under Article 3, this regulation explicitly defines behaviors that violate Article 11:
1. The invention-creation contents of multiple patent applications are obvious sameness, or are essentially formed by a simple combination of different invention-creation features and elements.
2. Fabricating, forging or altering the contents of the invention-creation, experimental data or technical effects, or plagiarizing, simply substituting or piecing together the prior art or existing designs, or similar circumstances exist in the filed patent applications.
3. The contents of the invention-creation for which the patent application is filed are mainly generated by random computer technology.
4. The invention-creation for which the patent application is filed deviates from technical improvement or design logic, becomes inferior, piles up technical contents, or involves unnecessary limitations to protection scope.
5. Filing multiple patent applications without actual research and an inability to provide a reasonable explanation.
6. Maliciously dispersing, sequentially filing, or filing in different locations multiple patent applications associated with specific entities, individuals, or addresses.
7. Unfairly licensing or assigning patent application rights for improper purposes or falsely changing the identities of inventors or designers.
8. Other abnormal patent application behaviors disrupting normal patent work, violating the principle of good faith.
Simultaneously, the newly published Examination Guidelines, set to be effective on January 20, 2024, directly reference the Behavior Regulations in the sections on preliminary and substantive examination. Given that legal application in invalidation proceedings generally follows both preliminary and substantive examinations, these eight behaviors will also serve as specific facts and grounds for CNIPA to evaluate the validity of a patent in the invalidation procedure.
Examining the eight behaviors listed in the Behavior Regulations, whether it is the "obvious sameness" and "simple combination" in the first behavior, fabricating, forging, or altering behaviors in the second behavior, or the "maliciously dispersing" in the sixth behavior, all involve subjective judgments. Due to the inherent vagueness of subjective judgment, it is anticipated that all smart requesters seeking invalidation will cite Article 11 as a ground after January 20, 2024, placing additional workload pressure on CNIPA.
Regarding the burden of proof in invalidation procedures based on Article 11, the new Examination Guidelines do not provide detailed rules. Given the subjective nature of the judgment required for Article 11, the allocation of the burden of proof is likely to significantly impact the outcome. More clarity on this matter is expected once the new guidelines take effect on January 20, 2024.
It is crucial to highlight that despite the introduction of the principle of good faith in Article 20 of the Patent Law since June 1, 2021, the legal basis for preliminary, substantial, and validity examination proceedings lies in new Article 11 according to Article 69 of the New Regulations. Emphasized is that Article 11 focuses on violations during both the invention-creation conceiving and the patent prosecution stages. Therefore, only violations of good faith before and during the patent prosecution process may lead to the invalidation of a patent. Violations after patent granting are not covered by Article 11, making it impossible to declare the patent invalid through CNIPA's patent invalidation proceedings.
The effective date of the New Regulations is January 20, 2024. According to the "Transition Measures for Handling Examination-Related Issues of the Amended Patent Law and its Implementing Regulations" issued on December 21, 2023, by CNIPA, "requests filed on or after January 20, 2024, citing non-compliance with Article 11 as a reason for invalidation will be examined under Article 69 of the amended regulations." Thus, from January 20, 2024, onward, invalidation requests citing Article 11 as a reason will be accepted for all granted patents, regardless of when the patents were granted.
In conclusion, while Article 20 of the new Patent Law serves as a warning against dishonest behaviors in the patent prosecution and implementation stages, Article 11 of the New Regulations provides teeth to these warnings. However, due to the subjective nature of judging violations of good faith, it is expected that CNIPA will exercise caution in applying Article 11 during the patent prosecution and invalidation stages. Nonetheless, it is hoped that the implementation of the New Regulations and the examination guidelines will curb dishonest patent practices, providing a more robust and fair mechanism to enhance patent protection and quality in China.
Christopher Shaowei
Christopher has been with NTD for more than 30 years and has litigated many complex cases and frequently represented his clients before administrative agencies and courts in China. He also counsels clients and provides legal services in all areas of intellectual property (“IP”) including licensing, dispute resolutions before administrative and judicial authorities, patent law, trademark law, copyright law, trade secrets, unfair competition, domain name disputes, and patent prosecution and invalidation. Christopher has been actively involved in the legislative process in China relating to IP laws and regulations and is a frequent speaker/panelist on patent litigation, trademark enforcement and technology transfer issues at various world leading conferences and seminars.
Christopher has served as the Vice President of Licensing Executive Society International 2018-2021, Vice President of Licensing Executive Society China, Senior Counsel of Legal Counsels Committee on Economic and Trade Frictions of CCPIT and so on. He is also a member of Intellectual Property Committee of ACLA, American Intellectual Property Law Association (AIPLA) and Federation Internationale des Conseils en Propriete Intellectuelle (FICIP). Meanwhile, he is the Invited Lecturer of Law School of China University of Political Science and Laws.
Christopher has been honored for a consecutive number of years as the leading practitioner in IP litigation area in China. During his recent nomination, he has received the following comments from one of his clients, a fortune 500 company –.
“Christopher Shaowei from NTD is a well-respected intellectual property litigator. Clients like his execution, pro-activeness and creativity. He consistently brings new and creative approaches to resolving our issues. These kinds of skills and acumen are so lacking and rare in typical China law firms.”
