Supreme People’s Court
Calls for Public Comment on
New Procedural Rules for Reviewing
Patent Re-examination and Invalidity Cases

On April 28, 2020, the Supreme People’s Court of the People’s Republic of China announced a revised version of the “Provisions of the Supreme People's Court on Several Issues concerning the Trial of Administrative Cases for Patent Grant and Confirmation (1) (Draft for Comment).” The Provisions was not an entirely new creation, but rather a revision of the previous draft, which dates back to June 1, 2018. The revised “Draft for Comment” was formulated in response to the ever-changing nature of IP practice and the judicial environment, as well as to some of the stipulations found in the trade agreement reached between China and the United States in January of this year.¹ The Draft for Comment, which contains a total of 36 articles, was formulated with the intent to standardize the exercise and interpretation of laws in matters of patent re-examination and invalidation for the benefit of the CNIPA’s (China National Intellectual Property Administration) examiners, patent applicants, patentees, and invalidity petitioners. 

Looking at the Draft for Comment from a comprehensive perspective, the provisions features to restrict the power of CNIPA, be more acceptable on post-filing data submissions, and endows the Court with larger power in substantive determination of patentability as well as introduce the new rules for evidence.

DISCRETION OF THE COURT

Per the Draft for Comment, the court’s scope of case review is by default limited to the plaintiff’s litigation claims and reasons.² In instances in which the court identifies an apparently illegitimate fault in a finding of the CNIPA, however the court may adjudicate against the faulty finding which the plaintiff has even not challenged. As such, the Draft for Comment expands the court’s power of judicial review.

The Draft for Comment empowers the court to determine inventiveness in situations which the CNIPA fails to address a certain issue or errs on the determination of technical problems to be solved.³ Traditionally, the “three-step test⁴ ” has been implemented in China to analyze inventiveness. In the second step of the test, the examiner must ascertain the “technical problem” to be solved by the claimed invention and weigh the various factors when the specification and drawings fail to particularly describe the technical effects produced from the special technical feature(s) in the claimed solutions. In Article 15 of the Draft for Comment, the court may determine inventiveness at its own discretion after its analysis of the second step, when the court believes CNIPA’s decision on claims’ patentability was made in error or was not existent.

Under the Administrative Litigation Law of the PRC, the court is vested with the power to revoke an administrative decision that is either made without sufficient evidential support, was rendered as a result of an erroneous interpretation of applicable laws, was rendered in violation of due process, was rendered in a manner that was beyond or in abuse of statutory power, or was rendered in an inappropriate manner. The Draft for Comment further explains the court’s power to exercise partial revocation.⁵ The court may revoke only the erroneous part of the CNIPA’s decision on (1) claims, (2) designs, or (3) other matters that can be partially revoked and in which the CNIPA is not required to reissue a correct decision. In addition, for instances in which the court finds that the grounds and reasoning utilized by the CNIPA to invalidate a claim are not tenable, the court may rule to revoke entirely or partially the CNIPA’s decision so that the claim shall revive spontaneously without an extra step to order the CNIPA to revive those claims.⁶   

DESIGN PATENTS

The Draft for Comment stipulates the time point for what is termed as a “design space” as well as the associated determinative factors of the design space. Design space is a widely accepted concept in the judicial practice. In simple terms, it refers to the degree of freedom to design. It is more heavily considered by courts during an analysis of similarity between a design patent and an accused product. Under this concept, customarily seen products such as coffee mugs and car wheels would have narrower design spaces than a new product does, meaning that an analysis for similarity for something such as a new car wheel design would only require the consideration of minor changes. According to the Draft for Comment, when evaluating the level of knowledge and cognitive ability of the ordinary consumer (the fictional subject for similarity analysis), the court must consider design space. Furthermore, design space is determined on its “filing date” rather than the time of infringement analysis. Factors which define a design space in a given case include (1) function and/or use of a product; (2) comprehensive status of the prior design; (3) customary designs; (4) compulsory rules in the laws and regulations; (5) national or industrial standard for the particular technology; and (6) other required factors for consideration.⁷

Functional designs are not patentable. The Draft for Comment emphasizes that the design features which are necessary or of only limited options for generating a specific technical function do not significantly contribute to the entire visual effect of a design.⁸ Hence such kinds of design features cannot be relied upon to gain patent eligibility for a rejected design.

DATA SUBMISSION

The Draft for Comment also reflected partly the recently reached phase one Sino-U.S. trade agreement. For lab data submitted by pharmaceutical patentees or applicants after the filing date, the court will consider those data if they evidence the same technical effect by a person having ordinary skill in the art in view of patent specification, drawing, and common knowledge, for either purpose as shown below:⁹  

• in order to support the sufficient disclosure of the technical description relating to some specific technical effects stated in the patent specification (in the event of reexamination)
• in order to corroborate the technical effect of the patent or application distinguishable from the cited prior art reference (in the event of reexamination or invalidation)

This clause echoes Article 1.10 on Consideration of Supplemental Data, Chapter 1 for Intellectual Property of the trade agreement.¹⁰

Post-filing submission can be challenged for its authenticity, relevance, and evidentiary ability. When needed, the court may order the party which submits the experimental data to demonstrate the source and formation of that data, including the materials used and their sources, experimental steps, conditions, environment, or parameters, as well as the personnel or facility which completes the lab work.¹¹ If one party challenges the authenticity of the experimental data, the court may order the transfer of the data to an institution which has been agreed upon by both parties for the purposes of testing or verifying the experimental data. 

NEW EVIDENCE AFTER CNIPA’S DECISION

The Draft for Comment stipulates that in patent invalidation cases, the court will examine the new evidence submitted by the patentee in support of a patent validity argument that was not previously presented during an invalidation proceeding.¹² The rationale lies in an intent to adopt a more lenient approach allowing the patentee to seek remedy while defending the validity of its patent.

Conversely, in the event that an invalidation petitioner submits new evidence during an invalidation proceeding, the invalidation petitioner must present evidence which meets certain criteria to the exclusion of others.¹³  The rationale behind this limitation is the possibility that the invalidation petitioner may simply produce new evidence by initiating another new administrative proceeding at the CNIPA. The aforementioned exceptions for the submission of new evidence by an invalidation procedure are as follows: 

1. it is used to prove the common knowledge or customary design, and the evidence was not one which CNIPA previously requested to submit during invalidation proceeding but the submitting party failed to comply;
2. it is used to prove the level of knowledge and cognitive ability of persons having ordinary skill in the art (for the invention patent) or of the general consumers (for design patent);
3. it is used to prove the design space of a patented design product;
4. it is used to reinforce the authenticity or probative ability of a piece of evidence already admitted to the CNIPA; and
5. it is used to rebut new evidence submitted by the patentee.

SUPPPORT IN DESCRIPTION 

When the descriptions regarding specification, drawings or other matters conflict with one another so that the person skilled in the art would be unable to ascertain whether the claimed technical solution can resolve technical problems as indicated in specification, the court will conclude that the contradiction is not a sufficient support as required in Patent Law.¹⁴  Likewise, when the specification and drawings fail to adequately disclose specific technical content so that a person skilled in the art could not confirm that the claimed technical solution can resolve the technical problem as indicated in the specification, the court will conclude that the description does not make sufficient support as statutorily required in the Patent Law.¹⁵