China is now catching up with reforms in Patent Registration, which has been insufficient for a long time compared to the United States. China is now taking innovation and patenting to a new level, having taking several technological measures aimed at fostering patentable innovations. Leading the pack in patenting is renewable energy where patenting innovations in wind and solar, energy storage batteries, semiconductors, wireless devices, and biotechnology (Orcutt & Shen, 2011). The goal of this article is to review and exemplify the major historical differences between the US and China patent laws and track the evolution of the systems governing patent laws in the two countries. We will review the key differences in theory and practice and then go ahead to understand the implications of the recent patent law reforms to patent seekers in both US and China.
In 2008, The Peoples Republic of China enacted its third and perhaps the most ambitious amendment to its patent laws. This amendment introduced regulations that defined the procedures to be applied by patent practitioners and was promulgated in February 2010. The rules and regulations in this amendment are equivalent to the U.S. rules of practice as defined in Chapter 37 of the U.S. Code of Federal Regulations (CFR). China’s Guidelines for Patent Examination also came into force in February 2010 and they can be equated to the U.S. Manual of Patent Examination Procedure (MPEP) (Marshall, 2012). One marked difference however between the two countries is that unlike the U.S. that has taken a case-by-case approach, the Chinese system of judicial interpretation is a synthesis of rules that originate from judicial precedence, legislation, and concepts of Supreme Court judges. The other major notable difference in these laws is that unlike China’s laws which was first enacted in 1985 followed by first and second amendments soon after in 1992 and 2000, patent legislation in the U.S. dates back to the American Revolution and was reinforced in the constitution in the 1700s (Marshall, 2012).
Marshall (2012) illustrates how expansive U.S. patent law is observing that the landscape of U.S. patent laws spans the entire technological journey from the invention of the light bulb and steam engine to genetic engineering, semiconductors, rockets for outer space, biotechnology, financial and other business methods, and the internet world. It has not been easy for the U.S. to offer legal meaning to such an expansive range of technology. This has always kept the U.S. Congress and Courts on their toes in fashioning rules and remedies for accommodating and supporting meaningful commercialization of such innovations.
The U.S. patent laws were amended thrice in the nineteenth century. The law was recodified and updated in 1952 when Congress concluded its amendments in Section 103 of the U.S. Patent Act, which states “Patentability shall not be negative by the manner in which the invention was made”. This was meant to clarify that a flash of genius is immaterial in a patentable invention contrary to requirement of an earlier case law (Durham, 2013).
In September 2011, President Barrack Obama accented the latest U.S. patent law reform, which was named the Leahy-Smith or America Invents Act (AIA). The major change that was introduced by this law is the conversion from “first to invent” to “first to file” inventorship criterion. The current patent reform was championed under the motivation of harmonization. For a long time, The Intellectual Property Owners Association, an organization that represented majority of the Fortune 500 patents had been calling for reform that would harmonize the U.S. patent system with other patent systems in the world. Before the promulgation of AIA, all other countries in the world were using first-to-file system. U.S. Was the only country that used the first-to-invent system?
Review of Major Similarities and Differences
We now review the echoes of Chinese Patent Philosophy in AIA. Unlike China that had adopted a centrally directed system, the U.S. does not promulgate a unitary system of strategic goals in patenting or design of technologies. Instead, goals are set by different government agencies and private corporations accorded the liberty to plan as they deem fit. However, at least one AIA provision can be seen as a Chinese style directive (Marshall, 2012) In Section 25, there is a requirement that USPTO establishes regulations for prioritizing applications for products and psrocesses that are key to national competitiveness without recovering the excess cost of such examinations. This means that the USPTO has been directed to speed up the identification and granting of patents on new innovative technologies that should increase the competitiveness of the U.S. in the global marketplace. Although no numerical goals have been, set the U.S. as is the case in China, technological targets has been established (Durham, 2013).
As far as patent protection is concerned, China has adopted one type of patent protection that is dissimilar with the one for U.S. namely the utility model patent which provides short term protection (of ten years) under a simplified examination process (Marshall, 2012). According to Orcutt and Shen, (2011), SIPO only considers formal requirements without searching or applying prior art in its examination of utility model. This means that a patent will be granted within one year. In China, utility models have taken root and following the latest amendments in 2009, there is the likelihood of these being filed concurrently with invention patents. However, only one patent may be granted and the applicant is required to withdraw one or the other to avoid double patenting (Luginbuehl & Ganea, 2014). The utility model has gained popularity in the sense that its immediate assertion in court is possible after it has been granted by SIPO (Orcutt & Shen, 2011).
Some key distinctions between United States and China patent laws now. Article 25 of the C.P.L has specified subject matter that will not be patented in China. The list includes several categories that are supposedly patentable under Section 101 of the U.S. Patent Act and U.S. judge made law. Examples of such prohibited categories include methods for diagnosis or treatment of diseases, animal and plant varieties, and substances obtained through nuclear transformation (Marshall, 2012).
Unlike in China, under U.S. law, diagnostic processes or treatment of diseases are routinely patented as methods or processes authorized under Section 101. In China, diagnosis or treatment of diseases may only be patented through Swiss-type claims. Animal varieties in the U.S. are patentable under Section 161 of the U.S. Patent Act as long as they emanate from genetic manipulation and hybrid plant varieties (Durham, 2013).
Another key difference according to Marshall (2012) lies in automation. Chinese applications are not automatically examined by SIPO according article 35 of the CPL. Any time in the first three years when a patent is pending before SIPO, an applicant may request for examination. If there is no request within this three year period, the application is assumed to have been withdrawn unless there is reasonable justification for failure to make a timely request.
The other key difference is that unlike in China, applicants in the U.S. are required by law to submit known prior art references. In china, applicants are instructed to submit prior art references as per article 36 of the CPL. However; there are no consequences for failure to submit. Applicants in China are under no obligation to search for prior art. USPTO provisions have also not required such a search (Durham, 2013). However in the U.S., applications are required to submit known reference materials under their duty of candor. Failure to do so can lead to a defense to enforcement of any granted patents on the basis of the charge of inequitable conduct or fraud on the patent office. Additionally, the USPTO may sanction and bar from practice the patent attorneys involved in the process (Marshall, 2012).
Under litigation, a major difference between the U.S. and China is that in the U.S. courts have permitted the adjudication of both invalidity and infringement in a single judicial setting, However in China these two are separated whereby invalidity is decided by SIPO while infringement is determined in the courts. This means that if an individual is sued for infringement in China, the issue will be decided by the court. The accused party can then address the issue of invalidity with SIPO (Luginbuehl & Ganea, 2014). However, article 62 of the CPL provides that when a dispute arises over patent infringement and the accused infringer provides evidence to the effect that her technology or design belongs to the prior act or is a prior design, then the act will not constitute patent infringement (Orcutt & Shen, 2011).
The process of initiating a lawsuit for infringement is different between China and U.S. According to article 60 of the CPL, parties are required to settle disputes through negotiations and it is only in the event of failure of negotiations that the patentee can file a lawsuit in the People’s Court or approach the local patent office for settlement (Luginbuehl & Ganea, 2014). On the burden of proof, the U.S. courts require the patent holder to prove infringement by a preponderance of the evidence. However as per article 61 of the CPL, the accused infringer is required to proof the difference between her process in making the product and the patented process. U.S. patents enjoy a “presumption of validity” in the courts and the accused infringer must therefore overcome this presumption through clear and convincing evidence (Marshall, 2012).
Although China has for many years been sleeping as far as patent laws are concerned, the country has now woken up to catch up with the rest of the world. This is unlike the U.S. where patent laws date all the way back to the American Revolution and have formed part of the constitutional process as well as landmark statutes. There are key differences in theoretical constructs as well as in practice between patent laws in the U.S. and China ranging from formulation, judicial interpretation, implementation systems and procedures, application, and litigation. A few similarities also exist in these laws. These are the issues for discussion in this paper and we have reviewed these similarities and differences.
Durham, A. L. (2013). Patent law essentials: A concise guide.
Luginbuehl, S., & Ganea, P. (2014). Patent Law in Greater China. Cheltenham: Edward Elgar Publishing.
Marshall, J. (2012). Applications of intellectual property law in China: RIPL’s Special Issue 2012. John Marshall Law School.
Orcutt, J., & Shen, H. (2011). Shaping China’s Innovation Future: University Technology Transfer in Transition. Cheltenham: Edward Elgar Pub.