This content is from: China (PRC)

A closer look at the compensation system for the patent protection term in China

Haixia Li of Kangxin explains why applicants and patentees should understand the functionality of the compensation system for the patent protection term

Since its implementation in 1985, the Chinese Patent Law has been revised four times in 1992, 2000, 2008 and 2020, respectively. The last revision of the Patent Law came into effect on June 1 2021.

One of the highlights of this revision is the establishment of a compensation system for the patent protection term when there is an unreasonable delay during the granting process.

According to Article 42, paragraph 2, of the revised Patent Law, “Where the patent right was granted for an invention after the expiration of four years from the date of filing and three years from the date of requesting for substantive examination, the patentee may request for compensation for the protection term of the patent right when there is an unreasonable delay during the granting process of the invention patent, except for if the unreasonable delay was caused by the applicant.”

From Article 42, three key pieces of information can be extracted:

  1. The compensation for the patent protection term is not initiated automatically, but needs to be requested by the patentee;
  2. The patent for which compensation of protection term is obtained needs to meet two time requirements, one is that the grant date is beyond four years from the date of filing, and the other is that the grant date is beyond three years from the date of requesting for substantive examination, both of which are indispensable; and
  3. The ‘unreasonable delay’ that should be compensated for the protection term shall exclude an unreasonable delay caused by the applicant. The revised Patent Law provides general provisions on the compensation system for patent protection term, but does not provide relevant explanations on specific implementation issues such as the determination of an ‘unreasonable delay’ and the calculation of the compensation term.

For reference, “the granting process of the invention patent” in Article 42 refers to “the prosecution procedure of the invention patent application”.

In order to ensure the implementation of the revised Patent Law, the State Intellectual Property Office has formulated and issued the Interim Measures for the Handling of Examination Services Related to the Implementation of the Revised Patent Law (Interim Measures), which also came into force on June 1 2021.

Item 5 of the Interim Measures stipulates: “For invention patents granted from June 1, 2021, the patentee may, in accordance with Article 42, paragraph 2 of the revised Patent Law, submit a request for compensation for the protection term of the patent right in paper form, within three months from the date of announcement of the patent grant, and then pay the relevant fees in accordance with the payment notice issued by the State Intellectual Property Office.”

From the item above, the following preliminary guidance can be ascertained:

  1. The compensation system only applies to the invention patents granted on or after June 1 2021; and
  2. A patentee can request for patent term compensation within a time limit, i.e. within three months from the date of announcement of the patent grant, and after the time limit, the right to request for compensation will be lost.

At the same time, the State Intellectual Property Office has also issued the “Amendments of the Implementing Regulations of the Patent Law (Draft for Comment)” (draft regulations). Although the final revised version of the Implementing Regulations of the Patent Law has not yet been released, the amendments related to the compensation system proposed in the draft regulations can be referred to by applicants and patentees.

In the draft regulations, rule 85.3 states that “The compensation for patent protection term shall be made according to the actual number of days delayed. An unreasonable delay caused by the applicant includes the following situations: (1) Failure to reply to the notice issued by the patent administrative department within the specified time limit; (2) Request for delayed examination; (3) Incorporation by reference; and (4) Other circumstances.”

According to the draft regulations, a preliminary understanding of how the compensation time is calculated can be obtained. However, based only on the provisions above, for a specific case, the patentee may still not be able to determine whether there is an opportunity to obtain compensation for the protection term and the specific compensation time that may be obtained at present.

In addition, the State Intellectual Property Office has further carried out adaptive revisions to the Guidelines for Patent Examination. In the “Draft Amendment to the Patent Examination Guidelines (Draft for Comment)” (draft guidelines), the relevant provisions on compensation for the patent protection term have been added.

Although the final revised version of the Guidelines for Patent Examination has not yet been released, we believe the detailed explanations on the compensation system in the draft guidelines could provide practical guidance and assistance for applicants and patentees to some extent.

The draft guidelines clearly stipulate that “The compensation for the patent protection term shall be made according to the actual number of days delayed, and the actual number of days delayed refers to the unreasonable delay time during the granting process of the invention patent minus the unreasonable delay time caused by the applicant.”

Figure 1 shows the formula that calculates the compensation time.

Figure 1: Formula calculates the compensation time

Unreasonable delay time during granting process

The unreasonable delay time during granting process refers to the date of the announcement of grant of the invention patent minus the date of the expiration of four years from the filing date of the invention patent and the expiration of three years from the date of requesting for substantive examination.

Delays caused due to the following circumstances do not belong to the unreasonable delays during the granting process: suspension procedures, preservation measures, administrative litigation procedures, and reexamination procedures of patents granted after amending the patent application documents in accordance with Rule 66 of the Implementing Regulations of the Patent Law.

The filing date here refers to the filing date stipulated in Article 28 of the Patent Law. For international applications, it refers to the date of entry into the Chinese national phase. For a divisional application, it refers to the date of submitting the divisional application.

The date of requesting for substantive examination refers to the effective date of the substantive examination request, which is the issuance date of the notice of entering the substantive examination stage of the invention patent application.

Unreasonable delay time caused by applicant

For the following unreasonable delays caused by the applicant, the delay time is:

  1. For a delay caused by failure to reply to the notice issued by the Patent Office within the specified time limit, the delay time is from the date of expiration of the time limit to the date of the actual submission of the reply;
  2. For the case of requesting for delayed examination, the delay time shall be the actual delay time of examination;
  3. For a delay caused by the incorporation by reference, the delay time is the delay time caused in accordance with the Rule 45 or Rule 46.1 of the Implementing Regulations of the Patent Law;
  4. For a delay caused by request for restoration of right, the delay time shall be from the date of expiration of the original time limit to the issue date of the notice of approval of the request for restoration of right, unless it can be proven that the delay was caused by the Patent Office;
  5. For a delay under the situation that the international application enters the Chinese national phase within 30 months from the priority date (which means the entry date is earlier than the expiration date of 30 months) but the applicant does not request an early processing of the application, the delay time is from the date of entering the Chinese national phase to the date of expiration of 30 months from the priority date.

The draft guidelines further specify what is “unreasonable delay time during granting process” and what is “unreasonable delay time caused by the applicant”. The specific description in the Draft Amendment could be summarised in the following table.

Based on these explanations, a basic understanding can be obtained of the conditions for compensation for the patent protection term and of the calculation of the compensation time.

For cases that have recently obtained patent rights, we can preliminarily consider whether a request for compensation for the patent protection term can be made, and estimate the possible compensation time.See below an example that demonstrates the calculation of the possible compensation time.

There is a Chinese invention patent application which is a divisional application with the filing date of the parent application on October 19 2007, and with the date of submitting the divisional application on April 30 2015.

On September 23 2015, the Patent Office issued a notice of entering the substantive examination stage for the divisional application. During the substantive examination process, the applicant submitted four requests for a two-month extension of replying to office actions. The examiner issued a decision of rejection on November 19 2018.

The applicant filed a request for reexamination on February 28 2019, and made amendments to the application documents during the reexamination process to overcome the defects pointed out in the decision of rejection. The panel issued a decision of reexamination on March 18 2021 to withdraw the decision of rejection. The divisional application was finally granted on July 13 2021.


“One of the highlights of this revision is the establishment of a compensation system for the patent protection term when there is an unreasonable delay during the granting process.”


Let’s first determine the filing date, the date of requesting for substantive examination and the grant date. For a divisional application, it should be noted that the filing date for determining compensation refers to the date of submitting the divisional application, then the filing date for calculating the delay time in this case should be April 30 2015. The date of requesting for substantive examination is September 23 2015 and the grant date is July 13, 2021.

The granted application has gone through the reexamination procedure, and the defects pointed out in the decision of rejection were overcome by amending the application documents in the reexamination procedure.

In such a situation, the entire reexamination process does not belong to the unreasonable delay during the granting process, and the time period of the reexamination process should be excluded from the unreasonable delay time during the granting process.

Regarding how to calculate the time period of the reexamination process (particularly, how to define the starting time and ending time of the reexamination process), we could not find any description in the draft guidelines. It is estimated that the patent office may opt to define the time period of the reexamination process to be from the issue date of the decision of rejection to the issue date of the decision of reexamination. However, this is only for reference and should be subjected to the practical operation measures of the patent office. For this case, we can just calculate the time period of the reexamination process as taking about two years.

During the substantive examination process, the applicant submitted four requests for a two-month extension, and each time the applicant submitted a reply on the date of expiration of the two-month extension period. That is, the unreasonable delay time caused by the applicant can be calculated as eight months.

From the above listed information, we could obtain the “unreasonable delay time during granting process” and the “unreasonable delay time caused by applicant” for the specific case, and could conclude that the “unreasonable delay time during granting process” is less than the “unreasonable delay time caused by applicant”. Thus, there is no “actual number of days delayed”. Accordingly, a compensation for patent protection term could not be obtained for this case.

Attention needs to be paid in terms of two aspects for this case: one aspect is the definition of ‘filing date’ under the compensation system for the patent protection term; the other aspect is the situation which needs to be excluded from the unreasonable delay during the granting process (e.g., the reexamination procedure of a patent granted after amending the application documents during reexamination). If these two aspects are not taken into account, it may be mistakenly believed that this case can be compensated for the patent protection term.

Although the revised versions of the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination have not yet been released, the draft regulations and draft guidelines, as well as the revised Patent Law and the interim measures, provide a general framework of the compensation system for the patent protection term.

Applicants and patentees could preliminarily consider whether the granted invention patent is likely to be compensated for the patent protection term and estimate the possible compensation time based on the above.


Haixia Li
Patent attorney
Kangxin Partners P.C.
T: 010-56571588
E: congxin3470@sina.com

Haixia Li is a patent attorney at Kangxin. She is responsible for patent applications in a wide range of industries but particularly focuses on chemistry, biology and medicine.

Haixia has handled many patent cases for foreign clients, and accumulated rich experience on patent application strategy in China.

Haixia is a lecturer on China’s Patent Law and patent practice for Kangxin Training Center and also the Intellectual Property Training Center of China. She obtained the qualification of Chinese Patent Attorney in 2012. She obtained her master’s degree in biotechnology in 2008 from Beijing Forestry University.

The material on this site is for law firms, companies and other IP specialists. It is for information only. Please read our Terms and Conditions and Privacy Notice before using the site. All material subject to strictly enforced copyright laws.

© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.

Related

Instant access to all of our content. Membership Options | 30 Day Trial