In the last decade there has been an exponential increase in the amount of patent filing originating from China, which, according to a recently published USPTO report, can be attributed to certain non-market factors including subsidies and targets set by various governmental authorities in China.
Coincidently, or perhaps not coincidentally, the China National Intellectual Property Administration (“CNIPA”) released a Notice on Further Strictly Regulating Patent Application Behaviour (the “Notice”) on 27 January 2021 and also some Measures on Regulating Patent Application Behaviour (Draft for Solicitation of Comments) (the “Draft Measures”) on 10 February 2021. Both documents aim to reduce the number of “abnormal” patent filings and shift the focus from the quantity of patent applications to the quality.
The Notice and the Draft Measures classify a number of patent filing activities as “abnormal” and to be discouraged, some examples of which are:
- filing multiple patent applications with substantially identical content or with simple replacement or re-combination of common materials, parts or composition proportions;
- blatant copying of prior art, with or without obvious modification or re-arrangement;
- fabricating invention or experimental data;
- generating random invention descriptions or product designs by computer; and
- filing multiple divisional patent applications in the absence of any legal or technical necessity.
To combat such undesirable filings, the Notice calls for several counter-measures aiming to rectify the distorted patent filing landscape created by artificial intervention. First of all, CNIPA requested local IP bureaus to refine their assessment criteria on patentable technology, and in particular to abolish any performance index based on the quantity of patent applications and to avoid setting any mandate on patent filing numbers.
The CNIPA also urged local administrations to cancel all kinds of funding for patent applications by June 2021, which means financial aid shall only be given to patented inventions. In addition, the total amount of any subsidy should not exceed 50% of the official fees paid (excluding annuities) for obtaining the patent, and should only be reimbursed after the patent is granted. The CNIPA further demanded that such patent subsidies should be gradually reduced and be completely abandoned by 2025.
In respect of the prohibition on funding of patent applications, a subtle point arises as to how the Notice, which is not promulgated by the State Council and appears only to have the weight of an administrative guideline, may bind government agencies that are not under the authority of CNIPA. Nevertheless, there is one thing for sure, that is patent agencies who knowingly (with either actual or constructive notice) file such “abnormal” patent applications will be disciplined by the professional regulatory body of PRC patent agents or, in case of serious breaches, penalised by CNIPA.