Utility Model - an Overlooked but Powerful Tool

作者:Stephen Yang 浏览: 发表时间:2009-01-01 00:00:00 来源:Published in China IP Focus, 2009

China’s patent system provides three types of patent rights: invention, utility model and design. The utility model is used extensively by Chinese applicants but foreign applicants have filed only a small number of applications.


According to statistics from State Intellectual Property Office (SIPO), in 2008, Chinese applicants filed 223,945 (99.3%) utility model applications while foreign applicants only filed 1,641 (0.7%). The accumulative numbers from April 1985 to January 2009 are 1,704,871 (99.7%) and 12,389 (0.3%). A possible explanation is that foreign applicants, particularly those from countries where no utility model system exists, may not be familiar with it. Another reason is that the utility model system seems to have been undervalued or even discredited.


However, questions surrounding the value of utility model patents and how to strategically use China’s utility model system are still of great interest to many foreign applicants. But before detailed discussion of this, a review of China’s utility model system is necessary.


China’s utility model system



According to Chinese patent law, “utility model” means any new technical solution relating to the shape, the structure, or their combination, of a product, which is fit for practical use. In other words, utility model patents protect products, but not methods. A Chinese utility model is valid for a term of 10 years from the filing date.


The overall prosecution time for a utility model application is usually much shorter than for an invention application. A utility model patent can be granted between six and 12 months from the filing date whereas an invention may need two to three years on average. No substantive examination is needed for utility model. However, the Chinese utility model system is not a simple registration system either. The application has to go through what is referred to as a “preliminary examination” which is somewhere in between a formality and a substantive examination. In addition to this, examiners check whether the utility model application is unethical and if the claims are consistent with the definition of utility model – if the claims are technical solutions, if they claim a product and not a method, and if the technical solutions are fit for practical use.


Double patenting

Where the claim scope of a utility model and a patent for invention is identical, they are regarded as double patenting and are not allowed to co-exist.


If a same applicant files a utility model application and an invention application for the same subject matter on the same day, the utility model is usually granted first and the new Chinese patent law, which will come into effect on October 1 2009, prescribes that, in case that the invention application is ready to be allowed and the utility model is still valid at that time, the applicant is allowed to abandon the utility model and choose the invention patent.


This could extend the period during which an enforceable patent right is available and is beneficial to applicants. In addition, since the cost of prosecuting and maintaining a utility model is typically far less expensive than that for invention, filing two applications will not significantly increase the cost to the applicant.


Changing the type of application

Upon filing an application, either the utility model or invention patent must be chosen. It is not possible to change from one type to the other later during prosecution. It is not possible to branch out a utility model application from an invention application, as in Germany. However, for priority purpose, a patent for invention can claim priority from a utility model and vice versa.


Patentability Standard

Although substantive examination is not conducted during examination, there is a patentability standard for the utility model which is applied during invalidation proceedings explained below. Specifically, a utility model must have novelty, inventiveness and industrial applicability. The difference is that the requirement for inventiveness is lower than that of invention.


Invalidation proceedings

According to Chinese patent law, after a patent is granted an invalidation request may be filed by any party. During invalidation proceedings, substantive examination is conducted to examine the validity of that patent. However, since the requirement for inventiveness is low, in practice, it is difficult to invalidate a utility model on the ground of lack of inventiveness. With a few exceptions, usually only one or two pieces of prior art shall be used to assess the inventiveness of a utility model application and examiners usually only consider the references in the same technical field rather than similar or related technical fields, as they do for an application of invention.


According to an official from SIPO, in the past approximately 30% of patents for invention were declared completely invalid compared with 35% of patents for utility model – a small difference. In fact, many utility models filed by Chinese applicants are not drafted by sophisticated professionals and often leave little room for the patentee to make amendments during invalidation proceedings. The statistics for the utility model could have been even better otherwise.



Since utility models are not substantively examined, according to the new Chinese patent law, when a patentee wants to enforce a utility model against an alleged infringer, the infringement courts or administrative authorities usually request the patentee provide what is referred to as a “patent right evaluation report”. The evaluation report, which must be done by SIPO, includes the search result and comments on the patentability and will be used as evidence.


According to Chinese practice, the alleged infringer could attack the validity of the utility model at the Patent Reexamination Board. The infringement court does not decide on validity. Depending on the actual situation and possibly partially on the evaluation report, the infringement court may or may not stay the infringement proceeding until the validity of the utility model is determined.


The new Chinese patent law also prescribes how damages should be calculated, which applies to all three types of patents. In other words, the way this is done for a valid utility model is no different to a valid invention patent. In the Chint v Schneider case, Schneider Electric was ordered to pay Rmb330m ($48m) for infringing on a utility model, the highest award in Chinese patent history. The only possible difference prescribed in the new patent law is that the court shall consider the type of patents infringed when determining statutory damages. However, this does not necessarily mean a patentee of a utility model cannot get high amount of damages. In addition, statutory damages are used only if the damages cannot be determined using any of other methods including patentee’s loss, infringer’s gain or royalties.


Strategic considerations

Chinese applicants have filed a great number of utility models applications. This is partly because they are cheap and fast but also because more than half of the utility model applications from Chinese applicants are filed by individual inventors, as opposed to companies. That often means the level of invention is not as high. The lack of substantive examination and thus uncertainty of validity have not seemed to impede Chinese applicants from filing. What is more, some applicants have taken products available overseas and filed utility model patents in China with the intention of later using the utility model right against other parties in China. This article does not intend to judge the ethics of this but simply and pragmatically discuss how foreign applicants could benefit from Chinese utility model system.


First of all, foreign applicants, especially individual inventors, could also enjoy the fast and cheap prosecution available in China which offers an enforceable right in a quick and cost-efficient way.


Secondly, more sophisticated foreign applicants may also want to consider filing utility model applications for patentability reasons. Foreign applicants usually file Chinese applications claiming priority from foreign application, either through the Paris Convention or as national phase of a Patent Cooperation Treaty application. Upon national phase entry in China, foreign applicants could choose to enter as invention application or utility model application, though they cannot use both since national phase can only be entered once.


By then, in almost all cases, the applicants have an idea of the patentability of their inventions. This could also be true even if the applicant uses the Paris Convention since in some countries office actions could be available within one year. Hence, for those applications that may have difficulty in terms of inventiveness, the applicant could strategically choose to file utility model applications in China. More than likely, for the “less inventive” inventions, applicants could get a utility model patent, which is difficult to be invalidated for lack of inventiveness.


Thirdly, applicants could strategically choose to file both invention applications and utility model applications. As mentioned above, the applicant could enjoy an extended period of time during which an enforceable right is available. Furthermore, applicants are likely to obtain different sets of claims in utility model patents and invention patents, with the scope of claims in the utility model patents being broader than that of the invention.


Assuming there is no problem with respect to novelty, even if the invention application encounters objections regarding inventiveness during prosecution thereof, the utility model may still stand attack of validity thereof in invalidation proceedings since the standard of evaluating inventiveness is different from that for invention patents. Also, if the utility model patent and the invention patent have different scope of protection, they are not regarded as double patenting. Hence, applicants may take an even further step by filing both invention applications and utility model applications with broader claims in the utility model application.


Moreover, the utility model is a quick and cost-efficient way to protect products with a short life cycle. New generations of products are launched more frequently these days meaning many products do have a shorter life cycle. Invention patents may not be suitable for protecting these products since they take a couple of years to be granted and they are costly to obtain and maintain. In contrast, utility model can offer protection of these products at much earlier stage and are cheaper to obtain and maintain and the 10-year term may well be long enough.


Lastly, the utility model is also suitable for “urgent protection”. Where a product is to be launched in China or abroad quickly and where there is no time for sophisticated drafting, a utility model application can be filed with possibly narrow scope of claims which in extreme cases may only cover the actual product.


In this sense, it is similar to US provisional applications. However, US provisional applications do not result in actual patent right if no further steps are taken, whereas a utility model application results in an enforceable right. For multinational companies with operation in China and inventions made in China, this could be particularly useful.


For a long time, it has been a default practice to file invention applications and go through substantive examination. Utility models have been overlooked. However, there are merits in the Chinese utility model system if it is used strategically. The Chinese utility model system should be understood and exploited by either foreign individual inventors or sophisticated enterprises.

Utility Model - an Overlooked but Powerful Tool