Since the new Patent Law came into effect on June 1, 2021, the PTA (Patent Term Adjustment) Scheme has been officially established.
Article 42, Clause 2 of the new Patent Law provides that: “Where an invention application is granted after the expiration of four years from the date of application and three years from the date of requesting for substantive examination, the patent administration department of the State Council shall, at the request of the patentee, compensate for the duration of the patent right for the unreasonable delay during the granting process of the invention patent, except where the unreasonable delay was caused by the applicant.”
Although the detailed regulations on PTA have not yet been finalized and promulgated, they can be learned in advance from the latest revised drafts of the “Implementing Regulations of the Patent Law” and “Guidelines for Patent Examination”.
I. Basic Conditions
First of all, PTA is available only when two time conditions are met. First, it has been more than 4 years from the date of application to the date of grant; second, it has been more than 3 years from the date of requesting for substantive examination to the date of grant. Therefore, the period from the date, on which the two conditions are both met, to the date of grant is the patent term to be compensated (if there are no other exceptions). This period can be referred to as “Objective delay”. Furthermore, the “date” mentioned above is also different under different circumstances, which will be explained in detail below.
1.1 Invention application
PTA is a compensation scheme designed for invention patents. However, there is one exception, that is, if the same applicant filed both a utility model application and an invention application for the same invention creation on the same day, and a patent right for the utility model application is granted, for any delay during the granting process of the invention patent it will not be compensated.
1.2 Date of application
Here, the date of application refers to the date when the application is actually submitted before the CNIPA. That is, the date of application here does not refer to the priority date. Further, for international applications (PCT applications) the date of application here refers to date of entering the national phase. In addition, for a divisional application the date of application refers to submission date of the divisional application.
1.3 Date of requesting for substantive examination
The date of requesting for substantive examination normally refers to the date when the applicant submits the request for substantive examination and pays the fee thereof in full. However, if the date of the request for substantive examination is earlier than the date of publication, the date of publication shall be held as the nominal date of requesting for substantive examination, that is, the above mentioned time condition - 3 years from the date of requesting for substantive examination shall be counted from the date of publication.
II. Unreasonable delay during the granting process
The purpose of PTA is to compensate for the duration of the patent right for the unreasonable delay which was caused by the CNIPA during the examination process of the invention patent. Rather than directly defining unreasonable delay, the current detailed regulations specify which circumstances do not belong to the unreasonable delays. Here, these circumstances can be referred to as "Uncounted delay".
2.1 "Uncounted delay" caused by the suspension of procedure
In general, there are two circumstances leading to suspension of procedure, which are 1) the dispute is relating to the ownership of right to apply for a patent; and 2) the People's Court has ordered the adoption of preservation measures for the right to apply for a patent. Therefore, the delay caused by the suspension of procedure does not belong to unreasonable delay.
2.2 "Uncounted delay" caused by Reexamination Procedure with amendment of claims
If the applicant amended the claims in reexamination procedure and the patent is finally granted, the time spent on reexamination is not considered as caused by the CNIPA and will not be compensated, that also means, if the claims are not amended in reexamination procedure but the patent is still finally granted, the time spent on reexamination would be considered as a kind of unreasonable delay during the examination process of the invention patent, for which it will be compensated given the other conditions for PTA are met.
2.3 "Uncounted delay" caused by Administrative Action
If the patent is finally granted after the post-reexamination administrative action, the time spent on the administrative action will not be compensated. It is easy to understand, since the administrative action is not a granting process of the invention patent, the time spent in the administrative action cannot be considered as a kind of unreasonable delay during the granting process of the invention patent.
III. Delays caused by the applicant
If the delays were caused by the applicant, the delayed time shall not be compensated neither. The latest draft of the regulations elaborates such delays caused by the applicant as follows.
3.1 Extension in the prosecution
The delay time caused by the applicant's request for extension in the prosecution shall not be compensated. If the applicant failed to reply to the notification issued by the Patent Office within the specified time limit, the delayed time shall be calculated from the expiration date of the time limit to the date of actual submission of the response. Such delayed time shall be held as delay caused by the applicant and shall not be compensated.
3.2 Request for postponed examination
If the applicant requests for postponed examination, the actual delayed time caused thereby shall not be compensated. According to the current Guidelines for Patent Examination (see its Part V, Chapter 7, Section 8), the applicant may request for postponed examination for invention patent application, where the postponed time is based on the request, maximum 3 years. The request for postponed examination of an invention patent application shall be made by the applicant at the same time as the request for substantive examination is made, but the request for postponed examination shall take effect from the date on which the request for substantive examination takes effect, rather than from the date of submitting request for substantive examination.
3.3 Incorporation by reference
The delayed time caused by incorporation by reference shall not be compensated. Where an invention application inadvertently omitted some parts of the specification or submitted the wrong version of claims or the description, given the priority of an earlier application is claimed, new claims or description may be supplemented within a specified time limit by quoting the earlier application. The delayed time caused thereby will not be compensated.
3.4 Request for restoration of rights
The delayed time caused by the applicant's request for restoration of rights shall not be compensated. Where a time limit prescribed by the Patent Law or specified by the CNIPA is not observed by the applicant because of force majeure or any other justified reason, resulting in loss of rights, the applicant may request the CNIPA to restore its rights. The delayed time caused by the restoration of rights shall be calculated from the expiration date of the original time limit to the date of issuance of the Notification of Decision on Request for Restoration of Right. And, such delayed time caused by restoration of rights shall not be compensated.
3.5 Early Processing
The delay time caused by the applicant's failure to request for early processing shall not be compensated. If a PCT application has entered the Chinese National Phase early, within 30 months, but the applicant did not request an Early Processing, the substantive examination will be held on until 30 months, where the delayed time is calculated from the date of actually entering the National Phase of China to the date when 30 months from the priority date have expired. Such delayed time will not be compensated.
Finally, a formula can be drawn from the above detailed regulations.
“Patent term compensation” = “Objective delay” - "Uncounted delay" - “Delay caused by the applicant”.
Only when the calculated value (in days) is larger than zero, the calculated days would then be compensated by the CNIPA. If the calculated value is less than zero, naturally the PTA is not applicable.