Introduction of Utility Models in China

Hi, this is Jason Yang, and I am a patent agent working for Gowling WLG China. In this video I would like to introduce a special type of patent protection in China, which is called Utility Model.  I will briefly cover what a Utility Model is and some tips for you as the takeaway.

I know that many people are not familiar with this type of Chinese patent, but this is actually a good option for people to choose in place of or in addition to a normal patent, and you may be even surprised by some of the benefits.

So, what exactly is a Utility Model?  You may have heard of this term if you have some experience in German or Japanese patent practice, because this type of patent has existed for a long time in these countries.  Actually, when China decided to build its own patent system in the 1980s, it learnt a lot from the German system, and Utility Model was something it wanted to have as an option to encourage people to file a patent even if the level of creativity is not high.

In this sense, a Utility Model aims to protect improvements on the structure or configuration of a product, such as in the arrangement, or in the way they are connected.  Basically, a Utility Model has an identical format to an Invention patent, or utility patent as called in North America.  It means you need to prepare a set of claims, Description, and some drawings.

The key difference is that there is no substantive examination during the prosecution for a Utility Model, which means that, in general, your patent application will not be challenged with some prior art documents found by the examiner.  As a compromise, the Patent Office shortens the term of protection for a Utility Model to just 10 years, while in comparison, it is 20 years for an Invention patent.

Now you may wonder – if the term of protection is compromised, what are the key benefits?  Why should I still choose this type of patent over the normal one?

First of all, the scope of protection for a Utility Model is based on claims, so it can be protected in a similar way to an Invention patent.  In other words, it is a more sophisticated protection than an industrial design when it comes to structural features.

Second, the prosecution for a Utility Model is easy, because a patent examiner only focuses on formalities.  If the specification is drafted well and everything is in line with formal requirements, usually it can be allowed even without a single office action.  Then, although the filing costs are similar to that of an Invention patent, you can expect a much lower cost for the prosecution process.

Finally, it can be allowed quickly – on average in about 5 to 10 months since the filing date.  After you pay the issuance fees, the patent will be published and protected right away, which means that you can obtain a patent right and enforce it just a few months after filing.  This is often the main reason why people file a Utility Model in China.

Let's talk about drafting.  Now you know that there is no substantive examination for a Utility Model, so does it mean we can draft a very broad claim 1?  My advice is that you should still be very careful for several reasons.

First, although a Chinese examiner is not required to conduct a prior art search, if she or he suspects that the claims are not novel, the examiner can still raise objections.  This often happens when the claims appear to be very short, so you may want to come up with adequate amount of features to avoid such a situation.

Then, if you want to enforce your patent right, the Chinese court usually asks for an evaluation report on patentability that you can request for before the patent office.  If your claims are too broad, the evaluation report may be negative and it would be hard to move on.  Also, anyone can challenge your patent right with prior art evidence, so it is important that the claims are relatively stable.

Another drafting tip is on the subject matter.  As I said, a Utility Model aims to protect structural improvements, but it doesn't mean it has to be a machine.  As long as there are some components that are related with each other in a space, the subject matter is eligible in most cases.  For example, an electronic circuit can be possible if it contains components that are arranged in a creative way. 

On the other hand, unfortunately, some subject matters are not permitted for utility models, such as methods, compositions, new materials, and media that stores computer codes.  So if you want to protect these subject matters, you will need to file an Invention patent instead.

Let's talk about how it can be filed.  You can file a Utility Model as national phase entry within the 30-month deadline, but by doing so you also give up the chance to file as an Invention patent because you may not switch the type of application for this route.

A more interesting way is that, under Paris Convention, you can file both Invention and Utility Model for the same set of specification on the same day.  Because the Utility Model will be granted in only several months, you can obtain the patent right quickly and enforce it quickly.  Then, at the time when the Invention counterpart is to be granted, you may need to abandon one of the two to avoid double patenting.

Then again, although it is not possible to take advantage of filing both Invention and Utility Model for PCT route, you may consider filing a Utility Model based on Paris Convention first to obtain a patent right from early on, and later enter China through PCT national phase as an Invention patent.

Finally, a Utility Model can be enforced just like an Invention patent because the scope of protection depends on the claim construction.  However, because a Utility Model has an easy prosecution, Chinese courts usually assume that the Utility Model is less stable, and then suspend the legal proceeding.  Like I mentioned, the patent owner will need to request for an evaluation report on patentability before the Chinese Patent Office.  The process is basically like a PCT search report that gives you some prior art references and concludes whether the claims are novel and inventive over the prior art.  If the report is positive, you can resume the legal proceedings, and proceed to enforce your patent.

So this concludes this video but if you have other questions about Chinese practices or filing strategies, please drop me an email at Jason.Yang at GowlingWLG.com, and I certainly look forward to seeing you in the next one.