Under the new patent system, patent applicants can submit standard patent applications directly in Hong Kong. The current “re-applying” system stipulates that a patent application can only be accepted if a corresponding application has been filed to a designated patent authority outside Hong Kong.

The new patent system also optimizes the short-term patent system and prohibits the use of certain misleading or confusing titles or descriptions related to patent practice in Hong Kong.

The Hong Kong Commerce and Economic Development Bureau said that the implementation of the new patent system is a milestone in the development of the Hong Kong patent system and will help promote Hong Kong’s development as a trading center for innovation and intellectual property.

(Source: Hong Kong SAR Government News Network)

“Regulations for the Registration of Trademark Application and Registration” to be implemented on December 1

On October 11, “Regulations for the Registration of Trademark Application and Registration” (hereinafter referred to as “Regulations”) was issued in the form of Order No. 17 of the State Administration of Markets. Regulations will be implemented on December 1 this year.

Qin Yizhi, deputy director of the State Administration of Markets Supervision, said that the State Administration of Market Supervision and the China National Intellectual Property Administration will continue to promote the reform of trademark registration facilitation in conjunction with the implementation of the Trademark Law and the “Regulations”. The authorities will crack down on all kinds of illegal acts that undermine the order of trademark management, and strive to create a market environment of fair competition and honesty for all kinds of market entities.

The 19 “Regulations” promulgated this time regulate trademark application and registration from four aspects. First, they summarize trademark application and registration activities violating the principle of good faith in the Trademark Law and work practice. The Regulations clearly regulate the agency services provided by trademark agencies. The whole process is supervised and malicious trademark application and registration activities in trademark examination processes are inhibited. Second, list the considerations for examining maliciously applied trademark registrations and enhance the operability and transparency of examining trademark registrations. Third, strictly punish malicious registration of trademarks and illegal agency behavior, and set a fine of three times the illegal income and a maximum of not more than 30,000 yuan for malicious trademark applicants. A trademark agency that assists in malicious applications is fined up to 100,000 yuan, and an agency will be punished to stop its business for serious circumstances. Fourth, further optimize the trademark application registration channels and processes to provide more convenience to applicants and improve service levels.

The relevant person in charge of the Law Department of CNIPA said that in recent years, the China National Intellectual Property Administration has always attached great importance to the issue of malicious trademark registration. In the trademark registration examination and trial stages, effective measures will be taken to preclude malicious registration and regulate malicious trademark cybersquatting. In 2018, CNIPA has accumulatively rejected approximately 100,000 abnormal trademark applications in the trademark registration examination and trial stages. The normal trademark registration order is effectively maintained.

(Source: website of China National Intellectual Property Administration)

China issued its first “Password Law”

On October 26, the 14th meeting of the Standing Committee of the 13th National People’s Congress voted to pass the Password Law. Through legislation, China implements classified management of passwords and promotes the building of the national password rule of law. The newly issued Password Law is divided into general provisions, core passwords, common passwords, commercial passwords, legal responsibilities, with a total of 44 articles in five chapters. Password Law will take effect on January 1, 2020.

The coming of “Password Law” marks a new era of regulating passwords according to Law in China. This will be a major blow to the non-compliance enterprises in the electronic signature industry.

The relevant person in charge of the State Password Administration said, “The formulation and implementation of the Password Law has filled in the long-standing legal gap in the password field in China. It is of great significance to speed up regulation of password according to Law, straighten out the relationship between relevant laws and regulations in the field of national security, and improve the legal system of national security. To formulate and implement the password law is to meet the needs of new situation. It can promote the transformation of functions in the password field and promote reform of “combine delegation and supervision and optimize services”. It can stablish and improve the implementation, supervision and support system of password rule of law, and standardize the order of password industry. It will improve the level of independent innovation and supply capacity of passwords, properly adjust and handle all kinds of social and interest relations in the field of passwords, and provide institutional guarantees for the sound and rapid development of password undertakings.”

(Source: China net)

Regulations for the implementation of the law of the People’s Republic of China on foreign investment (Draft for comments) has been promulgated

On November 1, 2019, the Ministry of Justice issued a notification about Regulations for the implementation of the law of the People’s Republic of China on foreign investment (Draft for comments). Comments can be made before December 1, 2019.

(Source: Ministry of Justice)

The second plenary session of the Advisory Committee for the formulation of the strategic outline for a strong intellectual property country was held in Beijing

Recently, the Office of the Inter-Ministerial Joint Conference on the Implementation of Intellectual Property Strategy of the State Council (hereinafter referred to as the Joint Conference) held the second plenary meeting of the Expert Advisory Committee on the Strategic Outline of Intellectual Property Power in Beijing. At the meeting, the responsible persons of the Joint Conference Office introduced the overall considerations and main contents of the draft of the Outline of the IP Strong Country Strategy.

Yan Qiqi, vice chairman of the Standing Committee of the 12th National People’s Congress and director of the Expert Advisory Committee, pointed out that the outline of the strategy for enacting intellectual property power should be based on Xi Jinping’s new-era socialism with Chinese characteristics. It is necessary to deeply understand the new situation and new requirements for the formulation of the strategic outline of intellectual property power, and clearly define the main objectives and key measures for the development of intellectual property rights in accordance with the strategic plan of the Party Central Committee. She hopes that the experts of the expert advisory committee will continue to contribute their wisdom, and the joint meeting office and member units will continue to do a good job. With this, the strategic outline of intellectual property power can stand the test of history and practice.

He Hua, director of the Joint Conference Office and deputy director of the China National Intellectual Property Administration, said that the joint meeting office will implement the spirit of Comrade Yan Qiqi’s speech, earnestly study and fully understand the opinions and suggestions of experts. It is necessary to further improve the content of the outline text, strengthen coordination and cooperation with the member units of the joint meeting, complete the task of setting up the outline on time, and make due contributions to accelerate the construction of a strong intellectual property country.

(Source: China Intellectual Property News)

China’s patent layout along the “Belt and Road” countries improves in quality

Since General Secretary Xi Jinping proposed the “Belt and Road Initiative” in 2013, the role of intellectual property rights in the construction of the “Belt and Road” has been increasingly strengthened. Under the guidance of the relevant departments of the China National Intellectual Property Administration, the Beijing Intellectual Property Research Base and the Patent Search and Consulting Center of the China National Intellectual Property Administration carried out statistical research on the patent activities of China and the countries along the “Belt and Road”. The data shows that the patents granted to China in the countries along the “Belt and Road” show stable growth rate, good structure and high quality. The number of patents granted by Chinese enterprises in the countries along the route has steadily increased from 1,646 in the early stage of the initiative to 3,299 in 2018, with an average annual growth rate of 19%. According to statistics about patent structure, taking 2018 as an example, the proportion of Chinese invention patents in countries along the route is as high as 97.6%, much higher than the domestic level in the same period. According to statistics about patent quality, in 2018, the average number of claims of patents granted to Chinese in countries along the route was 15.4, which was significantly higher than the average number of claims for domestic patents in the same period. These data fully demonstrate that Chinese companies are focusing more on quality of patents.

(Source: China Intellectual Property News)

“Regulations on Optimizing Business Environment” to be implemented from January 1, 2020, and a punitive damages system for intellectual property infringement will be established

On October 22, 2019, the first administrative regulation for the optimization of the business environment “Regulations on Optimizing the Business Environment” (hereinafter referred to as the “Regulations”) was officially released and will be implemented from January 1, 2020. As the first comprehensive administrative regulation to optimize the business environment in China, the “Regulations” establishes a basic system of business environment that treats all types of market players, such as domestic and foreign-funded enterprises, equally. It marks a substantial step in the provision of institutional guarantees for the investment and development of various market entities by government legislation, and is a milestone in the construction of a first-class business environment.

Article 15 of the “Regulations”, the protection of market entities, explicitly mentions measures related to intellectual property protection: The nation shall establish a punitive damages system for intellectual property infringement, promote the establishment of a rapid synergy protection mechanism for intellectual property rights, improve diversified settlement mechanism for intellectual property disputes and the intellectual property rights assistance mechanism, and increase the protection of intellectual property rights. The nation shall continue to deepen trademark registration and patent application facilitation reform, and improve the efficiency of trademark registration and patent application examination.

(Source: China Intellectual Property Journal)

Opening of the 16th Shanghai Intellectual Property International Forum; Shen Changyu, Director of the China National Intellectual Property Administration, made a speech

On October 21, 2019, the 16th Shanghai International Intellectual Property Forum opened in Shanghai, and Shen Changyu, director of the China National Intellectual Property Administration, delivered a speech. In his speech, he mentioned, “In order to improve the quality of IPR examination and examination efficiency, we have formulated and implemented the ‘Special Implementation Plan for Improving the Quality and Examination Efficiency of Inventions’. We will continue to promote the three-year plan for facilitating the reform of trademark registration, and take measures to improve the quality of examination and efficiency of examination. So far, China’s invention patent examination period has remained at 22.5 months. High-value patent examination period was reduced to 20.1 months, and the average examination period for trademark registration was within 5 months. The efficiency of examination is in the international first echelon, and the quality of examination is also steadily increasing.” Besides, he said that “China will create a world-class business environment, protect the legitimate rights and interests of foreign-funded enterprises, resolutely punish violations of the legitimate rights and interests of foreign businessmen, especially infringement of intellectual property rights, introduce a punitive damages system, significantly increase the cost of illegal activities, and strictly investigate intellectual property rights infringements and hold the infringers accountable. Administrative means shall not be used to force the transfer of technology.”

(Source: China Intellectual Property Journal)

The winning rate of foreign entities in Chinese foreign-related civil cases is 68%

The Zhongguancun Forum was held on October 16-18, 2019. From the establishment of the Beijing Intellectual Property Court in November 2014 to the first half of 2019, in the civil cases concluded by the Beijing Intellectual Property Court, the winning rate of foreign entities reached 68% (excluding the situation where both the plaintiff and the defendant are foreign entities).

In the same period, the Beijing Intellectual Property Court accepted a total of 13,736 intellectual property cases involving foreign countries (excluding Hong Kong, Macao and Taiwan) and a total of 10,755 foreign-related cases. The number of cases received increased by about 8.4% annually, and the number of cases closed increased by about 40.4% annually.

In terms of judgment results, in foreign-related civil cases, the foreign parties’ winning rate is 68% (excluding the situation where both the plaintiff and the defendant are foreign entities). In foreign-related administrative cases, the foreign parties’ success rate is 49% (excluding the situation where the plaintiff and the third person are both foreign entities).

In terms of amount of compensation, in foreign-related civil cases, the amount of compensation supported by the law was about 1.36 million yuan, and the support rate for the amount of compensation for litigation was 49.1%. The compensation supported for foreign-related technical cases was about 2.08 million yuan, and the support rate was 87.4%. The average sentenced compensation amount has generally increased year by year.

(Source: Xinhuanet)

The number of invention patent applications in 2019 is expected to be 14% lower than last year.

The annual report of the China National Intellectual Property Administration records information about the number of patent applications after 2003. According to the annual report, the number of invention patent applications after 2003 is increasing. Based on the number of invention patent applications from January to September 2019, the number of invention patent applications for the whole year of 2019 was converted, and it was found that the amount was 14% lower than last year due to factors like strict examination and allowance standards. The overall statistics of the number of patent applications and allowances are as follows.

1. The number of patent applications

2. The amount of allowed patents

(Source: CNIPA statistics)

Dragon Special Report and Agency Practice

Patent Search in free to operate Investigation

Patent investigation involves both technical and legal aspects. Although most companies know every detail about their own technology and technology in the industry, they know little about Patent Law, especially foreign Patent Laws. Therefore, local companies of target countries are usually entrusted to conduct FTO (FREE TO OPERATE) investigation. In order to make the results of the FTO investigation more comprehensive and accurate, the author outlines some points to avoid missing important patents in FTO investigation.

According to experience, companies mostly want an FTO investigation before establishing a new production base or entering a new market. Because companies already have a preliminary judgment about its potential competitors before FTO investigation, the entrusted company first needs to obtain such available product technical information and information of potential competitors. To facilitate communication, the entrusting company needs to provide technical contact and/or intellectual property contact information.

Conventional steps

In general, FTO investigations are conducted in the following steps:

(1) Determine keywords / IPC classification and construct retrieval formula

Before determining the keyword / IPC classification, it is necessary to obtain the relevant knowledge of product technology and major companies in the technical field of the product from relevant channels, such as the network, books, etc. It is also beneficial to understand the upstream and downstream industrial chain and other information related to the product, so as to provide a preliminary judgment basis for judging whether the retrieval formula is appropriate.

When determining keyword / IPC classification, on the one hand, key words are extracted from the product technology information provided by the enterprise, and the core key words are used for precise patent retrieval to obtain a small number of very relevant patents. Through analyzing the retrieved patents, key words, applicants (competitors), IPC classification and other information can be extracted. On the other hand, according to the competitor information provided by the enterprise, combined with the retrieved applicants, patent search is carried out, and the very relevant patents are selected from the search results, from which key words, IPC classification and other information are extracted.

Based on the understanding of product technology, on the basis of analyzing and making association of the above keywords and IPC classification, multiple retrieval formulas are constructed. Analyze the results of the retrieval formulas and adjust the formulas until the appropriate retrieval results are found, i.e., finding retrieval results with little noise. These appropriate retrieval results should be basically consistent with the information investigated at the beginning, that is, the preliminary judgment basis.

(2) Remove obvious noise from retrieval results

After checking the legal status, invalid patents in the retrieval results are to be ignored. At the same time, according to the invention name, abstract, applicant and other information, patents which are obviously not related to the investigated product technology are excluded.

(3) Infringement comparison

In the infringement comparison, after excluding apparently non-infringing patents, the scopes of the claims of patents that cannot be clearly determined whether it is infringed or not need to be construed from the description, examination history, invalidation litigation decision, etc. According to the principles of comprehensive coverage, equivalence, estoppel, donation and other judgment principles, technical features are compared one by one, and the possibility of infringement is accurately determined.

Through the above steps, FTO investigation can basically get a relatively accurate result. However, due to the fact that the results of FTO investigation will affect the major interests of enterprises or affect the business strategy of enterprises, it needs to be treated more prudently. Therefore, in the processes of the above investigation, it is necessary to test and improve the FTO investigation from other perspectives, so that the FTO investigation results can be more comprehensive and accurate.

Improving methods

According to the author’s experience, there are several effective ways to test or improve the results of FTO investigation:

(1) Investigation of family applications

When an enterprise entrusts an FTO investigation, the enterprise sometimes provides patents retrieved in FTO investigation in other countries or regions that pose a threat. In such cases, the validity of the search formula can be checked on the basis of whether there is family application in the region of the current FTO investigation and whether the family application has been included in the search results. If not, the search formula needs to be improved based on the family application to realize sufficient coverage.

(2) Applicant investigation

In the step of determining keyword / IPC classification and constructing retrieval formula, the applicants’ information will be used as a basis for determining validity of the retrieval formula. After infringement comparison, it is also necessary to determine whether the applicants of the threatening patents have already been included in the first step. If not, such applicants should be subject to a supplementary search.

(3) Inventor investigation

Because inventors usually carry out research and development in one technical field or related technical fields, it is necessary to search for the inventor of patents with infringement risk after the completion of infringement comparison, so as to retrieve relevant patents of the inventor.

(4) Investigation on cited patents

To some extent, the citation relationship of patents can reflect the approximation degree of technology. If one patent (citing patent) is negated of novelty or inventiveness in OA by the examiner on the basis of another patent (cited patent) or one patent (cited patent) is cited to comment on the novelty or inventiveness of another patent (citing patent), there is usually a technical correlation or similarity between the citing patent and the cited patent. After the completion of infringement comparison, the citation relationship of patents with infringement risk is analyzed to find out the citing patent and the cited patent. It is possible to verify or supplement the results of FTO and make the results more comprehensive and accurate.

Through the above three steps and four supplementary and improving methods, we can basically do the FTO investigation without omission. The above steps and methods can also be applied to patent retrieval of other technical topics to ensure comprehensive and accurate retrieval results.

Of course, the key to FTO investigation is to have a comprehensive and in-depth understanding of product technology and the technical field (including technological development context, main enterprises, upstream and downstream relations of industrial chain, etc.) and a deep grasp of patent legal knowledge, so as to ensure the comprehensiveness of retrieval and the accuracy of infringement identification from the technical and legal perspectives.

(Author: Xianwei ZENG)

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