Patent Agent System in China and the US

Issue 31 By Li Wei, Photo by Doris Li, China IP,[Patent]

In the 1980s, China’s patent representation service was inaugurated with nearly ten thousand scientific and technical professionals, each obtaining two year provisional patent agent work permits upon completion of a training program by the former Chinese Patent Office. This assemblage formed the first patent agent team in China. Though the past twenty years have witnessed considerable progress in China’s patent agency system, there is still much to learn from countries with mature patent systems.

The “humane” patent bar exam system in the US

Patent practitioners in the United States are either patent agents or patent attorneys. According to data released by the United States Patent and Trademark Office (USPTO), by the end of 2008, there were 29,000 registered patent attorneys and 9,000 registered patent agents in the US. To work patent cases, one must apply to the USPTO for registration and meet the requirements for registration. A person who has passed the patent agent qualification exam,the USPTO registration examination, often referred to as the patent bar, but has failed a state bar exam can only be called patent agent. A patent attorney is an individual who meets the requirements of a patent agent, and has also been admitted to practice law in any of the US federal courts or state supreme courts.

“In the US, having a scientific background is a requisite for the registration examination or the patent bar. It is immaterial whether the prospective candidate is an attorney or not,” said Mr. James Zhu, attorney and chief representative of Perkins Coie LLP Beijing Office (USA). Mr. Zhu continued to say, “There are three categories of applicant for the patent bar, depending on whether they possess the technical qualifications necessary to serve in this capacity: Category A is for people whose specialty background is the same as the type he applied for. A Category A applicant needs only to submit his bachelor’s degree and official transcript in order to sit for the exam. A Category B is for people whose specialty background is relevant to the type he applied for but not fully identical. To be eligible to take the patent bar, a Category B applicant is required to complete courses in the field he applied for. A Category C is for people who have technical background, but do not qualify under Category A or B above. Category C applicant can qualify through a showing that he has taken and passed the exam in science, i.e. the Fundamentals of Engineering (FE) examination.”

In 1997, the US cancelled the written section of the patent bar exam. Presently, the annual passing rate is 50% to 60%, much higher than that of China’s 10%. In China, certain individuals may have practical competence in patent representation, but fail to pass the exam. This is one reason for China’s lacks of patent agents.

“In the US, test takers are permitted to consult reference materials during the course of the patent bar exam. So I think the key of the exam is not how much content one remembered, but the ability to find the relevant laws and provisions as well as the solutions.” Mr. James Zhu said. Additionally in China, after passing the patent agent qualification exam, a two-year internship in a law firm is also required. However, in the US, experience is not a requirement to practice, one only needs to pass the registration exam. Meanwhile, non-US citizens legally residing in the United States may also take the patent bar exam assuming they have acquired the necessary patent agent qualifications. US citizens may also take such exams in other countries with similar policies. However, such policies are not available in China. Therefore, in this respect, the US patent bar exam system is more humane in comparison with that of China.

1/200,000 and 1/10,000

As of the end of 2008, there were only over 7,000 patent agents in China, accounting for 1/200,000 of the total population of the mainland’s 1.3 billion, while in the US, there were 38,000 patent attorneys and patent agents, constituting 1/10,000 of the total population of 300 million, 20 times the size of China. In 2008, there were 410,000 patents granted in China, an average of 60 patents per patent agent, whereas in the United States, there were 180,000 granted patents, with an average of 6 patents per agent. “There definitely exists quality difference in dealing with 60 and 6. Thus, the total number is sometimes meaningless. Of all the granted patents, patent for invention is the most important. Annually, the ratio of invention patent authorizations to the total authorizations is not very high in China, whereas among the 180,000 patents granted in the US, the majority of them are invention patents.” said Mr. Zhu. Though it is hard to quantify the quality of patent applications, the proportion of 1/200,000 and 1/10,000 can easily enable one to make a comparison.

The huge gap in quantity can be attributed to history, system and the concept of patent agents. According to Mr. Zhu, with regards to the field of biology in the US, the preparation of talent involves a long time. One must have a doctoral degree in biology and a law degree. After graduation from senior high school,at least 9 to 12 years are needed for one to acquire the qualifications to be a patent attorney in the field of biology. However, China has merely a 16-year history in patent protection of pharmaceuticals and chemical substances which began in 1993. The time for talent preparation in this area is far from enough. “Therefore, China should be given a fair position in history. The US also experienced such a process as China did.” Thus, in China, the preparation and cultivation of patent talent has become very important. To narrow this gap, a short-term solution to solve the shortage problem of patent agents is to merely cancel the restriction on the passing rate and not change the difficulty of the exam. Real improvement entails long-term accumulation and the introduction of high-end talent.

In the US, 40% of all patent attorneys work in companies, government and schools, most of whom come from law firms. Presently, several American enterprises still hire patent agents to draft patent applications when entering China, and use their Chinese agents for translation. China’s patent agents also need to go through such a development process. Nowadays, in some large law firms in China, many lawyers go abroad for further education. This may push forward the development of China’s entire patent agency industry.

The option between “point” and “ball”

The conceptual distinction is perhaps the biggest difference between the patent agents in China and the US. The claims made by Chinese patent agents often revolve around a “point” of a patent itself. It is very quick to get a patent application approved because the smaller the scope of a claim, the easier it is to have it passed in the State Intellectual Property Office (SIPO), which means the smaller the scope of the rights. However, the American patent agents often expand the scope of patent rights to include all relevant rights, changing patent applications from a “point” to a “ball” and affording maximum protection to the patents. This conceptual distinction was referred to as the selection of “point” and “ball” by Mr. Zhu.

Such comprehensive patent protection has much to do with the market. The more comprehensive an application is, the greater the cost of protection required from an enterprise is. Some Chinese enterprises have to choose the “point”, either due to their lack of strength for more input, or due to their refusal to accept such a concept. Perhaps only when the Chinese enterprises become strong enough and obtain benefit from the international market through their intellectual property can they change their concepts.

The “art” of patent agents

Prior to their entry into the market, American companies will request their patent agents draw a patent map relating to their products, defining a series of issues such as the rights holders of the products, duration, protection gaps, the focus of protection and the weakness of protection. American patent agents may advance different suggestions regarding patent warnings in light of different needs. Each suggestion should be based on an in-depth understanding of the products, including the history, framework of property right, scope of claims, and even the preparation for the handling of a patent infringement lawsuit. “This is the ‘art’ of a patent agent, not entirely a scientific issue,” said Mr. Zhu in addressing the work of patent warnings.

However, the Chinese patent agents have not done enough work in patent warnings, which has a lot to do with the concepts of some Chinese enterprises. Various enterprises do not have much experience in patent warnings and lack awareness. It is necessary that Chinese patent agents communicate with these enterprises to raise their consciousness of patent warnings.

Mr. Zhu also spoke of another issue with “Chinese characteristics”. A number of Chinese enterprises sometimes disclose to their patent agents very limited information, which is precisely a taboo in the US. American enterprises tend to place full trust in their patent attorneys and offer them very detailed information. The patent attorneys’ suggestions exert considerable influence over the enterprises’ decision-making and the outcome. However, some Chinese enterprises have kept some information from the patent agents, costing the latter a great amount of effort in investigation. It is a waste of resources. Hence, mutual trust between the patent agents and enterprises is of great importance. Chinese patent agents also need to grow mature.

                                (Translated by Zhang Meichang)

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