Written by Haoyu ZHOU (Elliot) and Hui WANG

 

While people are familiar with Chinese invention patents, not many people know about Chinese utility models. Utility models are actually an important type of patents that could serve as a good alternative or supplement to the invention patents. However, because many jurisdictions have no utility model patent system, this type of patents have been largely overlooked by many companies and IP practitioners around the world.

 

There are quite a few differences between invention patents and utility models. The most prominent one is probably “no substantive examination” for utility models. Largely due to the lack of examination, many people naturally thought that the qualities of utility models would be lower than the invention patents, and some even believe that Chinese utility models are a harbor for “junk patents”.

 

However, from our perspective, if utility model patents can be used smartly, they are powerful weapons that would be even more stable and more enforceable than the invention patents. The benefits of utility models have been underestimated, especially underestimated by foreign entities from countries or regions where no utility model patent system is available (for example, the US, EP, Canada, UK, just name a few).

 

In this article, we will discuss the pros and cons of Chinese utility models from three aspects: prosecution, invalidation and enforcement, in a hope that the readers can better understand the Chinese utility model system and how best to maximize their benefits of practicing utility models in China.

 

==Prosecution of Utility Models==

 

Due to the lack of substantive examination, the Chinese utility model patents will be usually issued in more or less 1 year after filing (which is very fast versus 2-4 years for invention patent). The lack of examination is good in a sense that the applicant can obtain a quick granted patent with broad claims, but it is bad in a sense that the stability of the claim(s) has not been assessed or examined during its prosecution.

 

Thus, to overcome the downside of “no examination” above and to obtain a more stable claim set, we would strongly suggest the applicant at least add some narrower claims as a fallback position at the end of the utility model application. Those narrower claims will be closer to the actual product, and will be less vulnerable to the invalidation attack.

 

Additionally, it is important to note that only physical products with technical improvements on the structures and/or shapes are patentable for Chinese utility models. Any methods, processes, or even new materials or new chemicals will be considered non-patentable for a utility model application. So, when you decide to file a utility model in China, you must make sure that the claims are protecting a product with clear structures and shapes, and you must delete all the claims directed to methods, processes, new materials or new chemicals.

 

==Invalidation of Utility Models==

 

Another important difference is that Chinese utility models require a lower level of inventive step than that of the invention patents. This is probably an important difference from utility model practices in other countries like Germany.

 

Because of this lower threshold for inventive step, if a petitioner tries to use more than three prior art documents in combination to challenge the inventive step of a UM claim, the Invalidation Board of the CNIPA may usually take a stand against the petitioner, because the fact that it needs more than three prior art documents in combination to challenge a claim would imply, to some extent, the “non-obviousness” of the claim per se.

 

Therefore, thanks to the lower threshold for inventive step, utility models are a good weapon to protect technologies where the modifications from prior art are relatively small. We have seen some applicants file only Chinese invention patent applications but it turned out to be hardly allowable in view of the cited prior art. If they had filed a utility model at the beginning of the prosecution, the problem would have been solved.

 

If the applicant is not sure whether a utility model application or an invention patent application should be filed, then we suggest the applicant consider the option of dual filings. The dual filing is a special and unique practice under the Chinese Patent Law, and is particularly useful when the applicants are not certain whether their technologies are sufficiently novel and inventive. Particularly, the dual filing strategy even allows the patentee to abandon the issued utility model by the time when the corresponding invention patent is granted with a double patenting issue.

 

Additionally, the dual filing partially solves the dilemma in which utility model and invention patent applications can’t be switched from one to the other during the Chinese patent prosecution. In other words, the only way to solve the “switch” problem is to have a dual filings at the very beginning of the Chinese patent prosecution, such that both utility model and invention patent applications could be prosecuted in parallel at the CNIPA. This could maximally preserve the applicant’s IP right in China.

 

Nevertheless, if the dual filing option is not available (say for PCT national phase entry into China where applicants have to choose either one of utility model or invention patent application), then it will be better to consider various factors, such as (1) the necessity of having a quick grant, (2) the necessity of ensuring the stability of claims, (3) the level of inventive step of the technology, and (4) the urgency of the patent enforcement in China (i.e., whether there is a clue of infringement in China already), or some other factors like budget and cost, etc.

 

==Enforcement of Utility Models==

 

There is almost no difference between the enforceability of a utility model and an invention patent if their claim language is identical. That is why increasing number of companies are interested in filing Chinese utility models, with a hope that they could use them against potential infringers in China.

 

The only major differences between utility models and invention patents at the enforcement stage is the procedure of enforcement and the patent term.

 

Specifically, to officially enforce a utility model, the patentee is usually required to obtain a Patent Evaluation Report (PER) from the CNIPA after the grant of the utility model but before taking an enforcement action. The patent evaluation report is similar to a search report that intends to assess the patentability of the issued claims in the utility model. The CNIPA will usually take 2 months to issue the PER, and the result will be positive, negative, or partially positive.

 

Once the patentee receives a positive or partially positive PER, they could immediately enforce the utility model by any possible legal measures, such as filing a complaint to the e-commerce platform, initiating an administrative enforcement, or filing a patent infringement lawsuit, or the like.

 

The patent term of a utility model is 10 years (versus 20 years for an invention patent). Due to the shorter patent term, some people believe that the utility model is more useful for protecting mechanical or electrical devices that have a faster technological turnover.

 

If the company already noticed some clues of infringement in China before filing any patent applications, then it would be more advisable to file utility models, or, dual filing option as discussed above. The utility model will greatly shorten the period for which the patentee can obtain a granted patent in China, and would naturally shorten the period to enforce the utility model.

 

If you have any questions about this topic or any other topics in patent prosecution or litigation, please feel free to drop an email to Mr. Haoyu ZHOU (Elliot) at patent@foundin.cn. We will be happy to provide more detailed advices on a case-by-case basis.