Transition Issues on the Guidelines for Patent Examination

2011/2/22By Wu Guiming, Partner of Kangxin Partners, P.C., Chinese Patent Attorney,[Patent]

I. Introduction
 
In October 2009, an American semiconductor company launched proceedings with the Beijing Municipal No. 1 Intermediate People’s Court because it was not satisfied with the notice issued by China’s State Intellectual Property Office (SIPO) which decided that its patent application “shall be deemed as not submitted,” asking the Court to require SIPO to withdraw the above-mentioned notice.
 
II. Summary of the Case
 
Plaintiff, a U.S. semiconductor company (U.S. Company) submitted an invention patent application to SIPO on November 13, 1998 for a “field-effect transistor and method of manufacturing the same” under application number 981XXX (98 Application). The patent was granted by SIPO on May 18, 2007.
 
On December 29, 2006, the U.S. Company filed a divisional based on the 98 application under number 20061XXX (06 Divisional) which was approved by SIPO on November 28, 2008, and published on February 11, 2009.
 
On January 16, 2009, the U.S. Company submitted a further divisional application for a  “field-effect transistor and method of manufacturing the same,” and indicated that this divisional application was originally the 98 application filed on November 13, 1998 and plainly indicated that the application was a divisional from the 06 divisional, under application number 20061XXX, for a “field-effect transistor and method of manufacturing the same.”
 
SIPO issued the acceptance notice on February 4, 2009 for the divisional application, and assigned the application number 20091XXX, with a priority date of November 13, 1998, and a filing date of January 16, 2009 (09 sub-divisional application).
 
During the preliminary examination of 09 sub-divisional application, SIPO sent a Notice Requiring Correction on April 3, 2009, requiring the U.S. Company to submit a photocopy of a previous notice on examiner’s opinion about deficiencies in single-invention requirement or a photocopy of notice for divisional application. As the U.S. Company failed to provide the appropriate copies, SIPO issued a notice on July 17, 2009 declaring that the divisional application be deemed as not submitted because it was filed after the expiration date set under Article 54(1) of the Implementation Regulations of the Patent Law (Regulations), effective as of July 1, 2001.
 
III. Relevant Laws, Regulations and Administrative Rules and the Problem
 
According to the first paragraph of Article 42 of the Regulations: “Where an application for a patent contains two or more inventions, utility models or designs, the applicant may, before the expiration of the time limit provided for in Rule 54, paragraph one of these Regulations, submit to the Patent Administration Department under the State Council a divisional application. The first paragraph of Article 54 requires that “after the Patent Administration Department under the State Council issues the notice of approval, the applicant shall complete recordation within two months from the date of receiving such notification.”
 
In this case, the date of the SIPO notification approving the 06 Divisional Application was November 28, 2008, and the U.S. Company’s filing of the 09 Divisional Application was made on January 16, 2009. Counting from the approval date of the 06 Divisional Application, the filing date of 09 Sub-divisional Application was made within two months as prescribed by the first paragraph of Article 54, so that it was in line with the provision in Article 42. However, SIPO obviously calculated the date based upon the 98 application, which was granted on May 18, 2007 and treated the 09 Sub-divisional application as expired.
 
In fact, Article 42 and 54 only provide that divisional applications should be submitted within the period of patent recordation, i.e. two months from the date of patent approval notification. For the case of sub-divisional applications, paragraph 1 of Article 54 does not specify whether the beginning date should be the approval date for the original application (the 98 Application in this case) or the divisional application (06 divisional Application in this case).
 
In this case, SIPO issued the notification deeming that 09 Sub-divisional Application was not successfully filed on the legal basis of the 2006 Edition of Guidelines for Patent Examination, enforced on July 1, 2006. Before the implementation of the 2006 Edition, it was permissible to submit the divisional application again, i.e. the deadline for a re-submitted divisional application was calculated on basis of the authorization notice day for the corresponding divisional application, which was consistent with the Patent Law and it’s Implementation Regulations and was not restricted by the Guidelines for Patent Examination.
 
After the revision of 2006 Edition, a new provision was made on the time for sub-divisional applications. Section 5.1.1 of the first part of Chapter One of 2006 Edition provides the submission deadline for divisional application. It states, “The applicant shall file a divisional application no later than the expiration of two months (i.e. the time limit for recordation) from the date of receiving the Notification to Grant Patent Right to the initial application issued by the Patent Office. After the expiration of the above time limit, or where the initial application has been rejected, or the initial application is abandoned or is deemed to be abandoned and the right has not been restored, no divisional application shall be filed in general….Where the applicant files a subsequent divisional application based on an already filed divisional application, the submission date of said sub-divisional application shall be examined according to the initial application. Where the submission date is not in conformity with the provisions, the examiner shall make a decision to close the case.”
 
It is obvious that SIPO issued the notice for the 09 Sub-divisional Application involuntary abandonment on the basis of 2006 publication of the Guidelines for Patent Examination.
 
Furthermore, SIPO also formulated the Transitional Measures for the Revised Guidelines for Patent Examination, which clarifies: “2. for patent applications or patents granted under the applications submitted after July 1, 2006 (including July 1, the same below), the revised Guidelines for Patent Examination is applicable after July 1, 2006 unless otherwise provided.” Since the Transitional Measures take the provision for re-submission of divisional application in section 5.1.1. as exclusion case, the resubmitted divisional application, even if it is submitted before July 1, 2006, would be treated as not submitted after the implementation of 2006 Edition of Guidelines for Patent Examination.
 
This shows that the focus of this case is whether the provisions on re-divisional application of 2006 Edition is applicable for the applications initially submitted prior to July 1, 2006.
 
IV. Review of Transitional Measures
 
In my opinion, the provisions on re-divisional application date by 2006 Edition should not apply to the applications first filed before July 1, 2006.  
 
According to Article 84 of China’s Legislation Law: “3 No ex post facto effect shall be accorded to any national law, administrative regulations, local decrees, autonomous decrees and special decrees, and administrative or local rules, unless and except for better protection of the interest of citizens, corporations or other organizations under special provisions.” Therefore, any law, administrative rule or regulation should follow the non-retroactivity principle. Thus, the provisions on re-divisional application date by 2006 Edition should not apply to the applications initially filed before July 1, 2006, but apply to those initial applications filed on and after July 1, 2006. This would be consistent with the principle made by Article 84 of Legislation Law and will not damage the interests of applicants who submit the divisional applications for patents initially filed before July 1, 2006.
 
Take the Transitional Measures for the third revision of Patent Law enacted on October 1, 2009 as an example. Before the revision, the first paragraph of Article 20 provided: “where any Chinese entity or individual intends to file an application in a foreign country for a patent for invention-creation made in China, it or he shall file first an application for patent with the patent administration department under the State Council, appoint a patent agency designated by the said department to act as its or his agent, and comply with the provisions of Article 4 of this Law.”Also in this provision, any Chinese entity or individual that intends to file an international application, the applicant shall first apply for a patent with the SIPO, and then file an international application for the same patent.  
 
After the third revision enforced on October 1, 2009, the first paragraph of Article 20 becomes: “where any Chinese entity or individual intends to file an application in a foreign country for a patent for invention or utility model made in China, it or he shall file an application for confidentiality review from the patent administration department under the State Council. The procedures and deadline for confidentiality review should be implemented in accordance with the provisions of the State Council.” It can be seen that after the third revision of the Patent Law, the conditions for Chinese inventions applying for foreign patents become stricter, i.e. the application shall pass the confidentiality review by patent administration department under the State Council. Even if the applicant has applied for a patent at the patent administration department under the State Council, it or he has to pass the confidentiality review before submitting the foreign patent application if the applicant also intends to apply for a patent for the same invention in foreign countries.
 
So, assuming that a Chinese applicant, which submitted an application for invention to the State Intellectual Property Office before October 1, 2009, and assuming that this invention is made in China, if the Chinese applicant intends to file a foreign patent application for the same invention after October 1, 2009, must the applicant go through the confidential review? Obviously the answer is no. Since the initial Chinese patent application was filed before the implementation of the third revision, in accordance with the non-retroactivity principle of Legislation Law, the Chinese applicant’s foreign patent application for its previously filed application for invention patent in China would apply the un-revised Patent Law. In other words, it can submit the foreign patent application directly to SIPO. Requiring it to go through the confidentiality review in accordance with the revised Patent Law would not conform with the principle of non-retroactivity in the Legislation Law and would constitute an unfair restriction on the applicant’s interests. Also, this would be forcing the applicant to not only follow the previous Patent Law (first apply to SIPO), but also follows the revised Patent Law (pass confidentiality review), which would be a contradiction.
 
For laws and regulations like the Patent Law and its Implementation Regulations, the implementation of transitional measures should be consistent with the non-retroactivity principle.  Guidelines for Patent Examination, as departmental regulations issued by State Intellectual Property Office, they should also be consistent with the principles of Legislation Law. Laws are the rules that regulate people's behavior and should be universal and predictable. Non-retroactivity is a basic principle of the legal system and modern countries generally confirm with the non-retroactive principle. The non-retroactivity principle has the function of protecting civil rights. 4 The patent rights, as a major form of intellectual property rights, has the features of civil rights, i.e., in terms of its nature, patent right belongs to the scope of private rights. Examination and authorization for an applicant's patents are in fact a review for legitimacy and authenticity of civil rights, or kind of public announcement and credit. 5 Guidelines for the Patent Examination, as the special regulation to adjust the civil rights defined by the Patent Law and its Implementation Regulations and even as the departmental rules, should follow the fundamental legal principle of non-retroactivity, except for special provisions made to better protect the rights and interests of citizens, legal persons and other organizations.
 
V. Conclusion
 
The time requirement for divisional application by the 2006 publication of Guidelines for Patent Examination should not be applied retroactively to applications initially filed before July 1, 2006, and only to those whose filed after the 2006 publication. Furthermore, the implementation of transitional measures for Guidelines for Patent Examination should be fully in line with the no ex post facto law principle established in Legislation Law. Only in this way can we better protect the interests of patent applicants and owners and make our IP legal system more complete.
 
 
(Translated by Li Yu)

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