In China, invention patent applications are subject to an "early publication, late examination" system, in which applications are published after the expiration of a period of 18 months, and granted in four to five years, from the filing date. The grant of a patent marks the start of the formal protection provided by the Patent Law of China for the invention pertained in the patent. From then on, the patentee may exercise his exclusive ownership and take action against others’ infringement such as “manufacturing, using, offering to sell, selling and importing the patented product, or using the patented process, and using, offering to sell, selling and importing products directly obtained by the patented process, for production or business purposes".
In other words, from the date of publication of an invention patent application, the public can easily access the technical content disclosed in the patent application, while the formal protection of such content cannot be obtained until the date of grant. This results in a "gap period" between the date of publication and the date of grant. That is to say, prior to the date of grant, if anyone arbitrarily exploits the published invention for his own benefit, such behavior does not constitute an act of "infringement of patent right" under the Patent Law. However, this would obviously harm the interests of the patent applicant and would not be in line with the intent of the legislation. To this end, provisional protection system was established.
Article 13 of the Patent Law of China stipulates: “After the publication of the application for a patent for invention, the applicant may require the entity or individual exploiting the invention to pay an appropriate fee.”
Rule 85 of the Implementing Regulations of The Patent Law stipulates: “In addition to the provisions of Article 60 of the Patent Law, the administrative authority for patent affairs may also mediate in the following patent disputes at the request of the parties concerned:
(4) any dispute over the appropriate fee to be paid for the exploitation of an invention after the publication of the application for patent but before the grant of patent right;
In respect of the dispute referred to in subparagraph (4) , where the party concerned requests the administrative authority for patent affairs to mediate, the request shall be made after the grant of the patent right.”
From the above regulations, it can be seen that the Patent Law provides provisional protection for invention patent applications which have been published but have not yet been granted.
Start: Generally, provisional protection starts from the publication date of the application. For PCT national phase applications, it is specifically stipulated in the Implementing Regulations of The Patent Law that, where the PCT application is published in Chinese in the international phase, provisional protection starts from the publication date of the PCT international application; where the PCT application is published in other languages than Chinese, provisional application starts from the publication date of the Chinese national phase.
End: Generally, provisional application ends when an invention patent application is granted, which marks a seamless transition from provisional protection to formal protection. However, not all invention patent applications end up with the grant of a patent. Some applications may be rejected, some be withdrawn, deemed withdrawn or deemed abandoned, etc. In such cases, as long as such a legal status is announced in the Gazette by the China Intellectual Property Administration, provisional application will be deemed as non-existent from the beginning.
Although provisional protection starts from the publication of an invention patent application, the claims, at that time, have not yet undergone substantive examination and it is not certain whether such claims will be allowed. Whether provisional protection still can be claimed if the scope of claims has changed at the time of grant? Article 18(2) of the Interpretation II of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases stipulates: “Where the protection scope claimed by the applicant at the time of the publication of an invention patent application is different from the protection scope of the patent right at the time of the announcement of invention patent issuance, if the accused technical solution falls within both of aforesaid scopes, the courts shall determine that the defendant has exploited the invention during the period stated in the preceding paragraph; if the accused technical solution only falls within one of aforesaid scopes, the courts shall determine that the defendant has not exploited the invention during the period stated in the preceding paragraph.” It can be seen that a principle of “public interest first” is adopted here, and the scope of provisional protection is subject to the intersection of the claims at the time of publication and the allowed claims at the time of grant.
To prevent others from arbitrarily exploiting a published invention before an invention patent is granted, the applicant may take the following measures to safeguard his own rights and interests:
- Informing the exploiter that an invention patent application has been filed and has been published;
- Requesting the exploiter to pay an appropriate fee;
- Requesting the exploiter to pay an appropriate fee after the grant of a patent, if the exploiter refuses to pay during the period of provisional protection;
- Asking the patent administrative department to mediate after the grant of a patent, if the exploiter refuses to pay; or
- Filing a civil lawsuit in court after the grant of a patent, if the exploiter refuses to pay.
Given that the exploitation of an invention patent application during the period of provisional protection is not defined as a "patent infringement", the right holder cannot require the exploiters to stop infringement or make compensation rather only ask them to pay an appropriate fee. In practice, the amount of the fee is usually determined by referring to the amount of patent royalties and considering various other factors such as the exploiter’s subjective behavior, the nature, time and scale of the exploitation, and the right holder’s reasonable cost for defending the rights. The eventually-determined amount is often lower than the standard for the amount of damages for patent infringement.
A further question, if another party exploits an invention disclosed in a patent application and thereby obtains related products during the period of provisional protection, and then uses, offers to sell, or sells the products after the patent application is granted, does such act constitute an infringement on the patent?
On November 8, 2013, the Supreme People's Court issued a guiding case No. 20, "Shenzhen Siruiman Fine Chemicals Co., Ltd. v. Shenzhen Kengzi Water Supply Co., Ltd. and Shenzhen Kangtailan Water Treatment Equipment Co., Ltd.: An Invention Patent Infringement Dispute", and gave an answer.
The Court stated in the Adjudication: “After the granting of a patent for invention, the use, offer for sale, sale, and other exploiting acts of the products obtained by exploiting the invention during the provisional protection for the patent application does not constitute infringement, and it is in line with the legislative purpose of the Patent Law.
On one hand, the patent system is designed on the principle of ‘publication in exchange for protection’. It allows protection to take effect only after the patent is granted. Regarding exploitation of invention patent applications, it does not constitute infringement if the exploitation is before the publication date. Subsequent exploitation of the obtained product from the early exploitation (before the publication date) shall be allowed after the publication date… However the applicant shall be entitled to claim an appropriate fee from the person who exploits the invention during the period of provisional protection, after the granting of the patent. Because the Patent Law does not prohibit exploitation before the invention patent is granted, subsequent exploitations of products obtained before the patent is granted also shall not constitute infringements. Otherwise, it would violate the legislative intent of the Patent Law by providing protection to technical solutions that are not yet made public or patented.
On the other hand, the Patent Law provides for prior user rights and only provides that if prior user continues to manufacture the same product and use the same process within the original scope, it is not regarded as infringements. There is no provision on whether the subsequent exploitation of the same product manufactured or the product manufactured using the same method constitutes infringement, but it cannot be concluded that the abovementioned subsequent exploitation constitutes infringement just because the Patent Law does not explicitly provide for it. Otherwise, the prior user rights under the Patent Law would make no sense.”
On April 1, 2016, the Interpretation II of the Supreme People's Court on Several Issues concerning the Application of Law in the Trial of Patent Infringement Dispute Cases came into force, wherein the Article 18(3) affirms this rule: where a party, without the authorization of the patentee and for production and business purposes, uses, offers for sale or sells products already manufactured, sold or imported by another party during the period of provisional protection after the announcement of patent issuance, and where the another party has already paid or promised in written form to pay an appropriate fee, the courts shall not uphold the claim by the right holder that the aforesaid using, offering for sale or selling acts infringe upon the patent right.”
Based on the above rules, if another party obtains products by exploiting an invention pertained in a patent application during the period of provisional protection and uses the products after the invention has been granted a patent, the patent right holder may request the another party to pay an appropriate fee. If the exploiter refuses to pay, the right holder may, after the invention patent is granted, request the patent administrative department to mediate. After an invention is granted a patent, any party who continues to exploit the patented invention without the authorization of the right holder shall be held liable for infringement.
In practice, the patent right holders may adjust the time of publication and examination of invention applications by requesting early publication, requesting substantive examination as early as possible, requesting accelerated examination, deferred examination, or requesting examination under the patent prosecution highway (PPH), or other procedures, thus affecting the duration of the provisional protection period. The right holders may also actively monitor the market, and thus once any potential infringement surfaces, they may launch swift investigations and evidence collection, take relevant measures, and design a comprehensive litigation strategy.