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Chinese year of the utility model?


Patent, utility model and design protection are available in China. However unlike in other jurisdictions that offer utility model protection such as Germany and Japan, in China the number of utility model applications filed annually exceeds the number of patent applications. For example, the number of utility model applications filed in China in 2011 was around 585,000 while the number of patent applications filed was around 526,000 and the number of design applications filed was around 521,000.

As in other jurisdictions that offer utility model protection, the vast majority of these applications filed in China are submitted by domestic applicants. For example, of the 585,000 or so utility model applications filed in China in 2011 more than 99% were submitted by domestic applicants.

At present Chinese utility model and design applications are granted immediately after a preliminary examination provided that no formal errors are found. Unlike the process for patent applications, there is currently no substantive examination of Chinese utility model or design applications prior to grant.

Utility model protection was introduced in China to encourage domestic innovation by providing rapid, low cost protection for small inventions. However, the absence of any substantive examination has led to ‘junk’ utility models being granted to domestic applicants for known technology belonging to foreign companies. The extremely large number of unexamined utility models and designs granted to domestic applicants also makes it very difficult for foreign companies to assess their freedom-to-operate in China.

To address this issue, on 6th February 2013, the State Intellectual Property Office (SIPO) of the People’s Republic of China published a draft revision of the examination guidelines for public comment. The draft revision would require examiners to judge during preliminary examination whether a utility model application obviously lacks novelty based on information they have obtained concerning prior art or conflicting applications. In addition, where an “abnormal application” is involved, such as an application obviously plagiarising prior art or repeated submission of an application with substantially identical content, the draft revision would require examiners to judge during preliminary examination whether the utility model application obviously lacks novelty based on reference documents obtained through a search or information obtained through other channels. The draft revision would introduce similar requirements for the preliminary examination of design applications.

Following expiry of the period for public comment on 18th March 2013, the draft revision to the examination guidelines may be adopted later this year. If so the increased chance of rejection coupled with a likely increase in prosecution costs and time to grant may reduce the number of utility model and design applications filed annually in China and will hopefully deter the filing of junk utility model applications by domestic applicants. This will be welcomed by foreign companies concerned with their freedom-to-operate in China.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.

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