Beijing ruling shows why foreign companies need a patent strategy for China
When France's Schneider Electric faced a patent battle in a Chinese court recently it had reason to feel confident. It thought it had a solid prior art case for invalidating the patent being used against it by Chinese firm Chint, and foreign companies win 95% of patent cases in the Chinese courts.
But when the High People's Court of Beijing rejected its arguments and awarded damages of $23 million against it, that was not the only shock. The most astonishing thing about the case to foreign eyes was that the patent in question had been granted with only a cursory examination and had cost just $70.
The patent, which referred to a circuit breaking system, was what is called a utility model patent. China has three kinds of patent: invention patents, which last for 20 years; design patents; and utility model patents, which last for just 10 years.
Utility model patents, or 'petite patents', exist only in some countries. You find them in Germany and France but not in the UK or US (though, confusingly, the US uses the term 'utility patent' to refer to its regular patent). They are issued for new technical solutions relating to a product's shape or structure, or a combination of the two, where it has a practical use.
The patent requires less inventiveness and is awarded quickly and cheaply. Full invention patents can take four years to be granted, while a utility model patent is typically granted in just one year.
This can be crucial for inventions in electrical or electronic fields. By the time four years have passed and your invention is finally protected by a fully-enforceable patent, technology may have moved on. Your invention could be irrelevant.
Perhaps the most crucial thing to know about utility model patents in China is that they are awarded with no substantive examination. Only preliminary examination is required, meaning that you can get one easily. But this means they are also easy for your business rivals to acquire.
Read the full opinion at : out-law.com