China Looks to Boost Protection for Software Patents

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By Peter Leung

Nov. 18 — A draft revision to China’s patent examination guidelines released late last month will likely make it easier to get software and business method patents.

Other proposed changes to ease the standard for amending granted patent claims should also help patent holders and, especially, patent assertion entities, practitioners say.

The draft guidelines follow developments that some have interpreted as evidence of China’s maturing and improving environment for IP owners. The guidelines are not law but rules for instructing examiners at China’s State Intellectual Property Office (SIPO) on how to properly examine patent applications.

There is no official timeline for when to expect finalized guidelines, though some expect they could come as early as next year.

Software Patents

One of the biggest changes in the guidelines confirms that software and business methods are patentable. They seek to address concerns that some examiners have been too cautious in treating all references to business models or computers as red flags that signal unpatentability. A sentence in the draft explains that claims relating to a business method are not excluded from patentability if they contain sufficient technical features.

Meanwhile, another change clarifies that apparatus claims relating to software can contain both hardware and “program” components. And the draft changed language that some examiners have interpreted as barring nearly all computer program references. The guidelines clarify that inventions relating to “computer programs per se” are not patentable because those are rules and methods for mental activities.

“The draft guidelines clarify some of the specific grounds for examiners to raise objections on,” Ted Chwu, a patent partner with Bird & Bird in Hong Kong, told Bloomberg BNA. “Under the proposed guidelines, a patent claim cannot be objected to simply because, for example, it contains certain terms such as reference to the medium on which the invention is recorded on.”

Haifeng Huang, an IP partner with Jones Day in Hong Kong, told Bloomberg BNA that the draft’s focus on an invention’s technical elements should help clarify the question of whether a particular software-related invention is patentable. He also said the focus on software and business method patents reflects the state of innovation in China. Internet, finance and insurance are all fields that generate significant innovation related to software and business methods, he said.

The proposed guidelines fit what some see as China becoming more hospitable to software patents. Critics in the U.S. have long argued that the U.S. Supreme Court’s decision in Alice Corp. v. CLS Bank International has made many genuine software-related inventions unpatentable. At the same time, they say an improving environment in China means that patent holders should consider going there to enforce and monetize their IP.

Easier to Amend

The draft proposals would also make it easier to amend granted patent claims. Currently, patent owners can only either combine or delete granted claims. Now, patentees will be able to add limitations from another granted claim in the same patent, with some limits.

“These proposed rules on post-grant claim amendment don’t go as far as the ability to amend claims in, say, European Patent Office (EPO) opposition proceedings or during UK court proceedings, which allow for significant claim recasting as long as the new claim scope is supported by the specification,” Chwu, who is qualified as a U.K. and EPO patent attorney, said. “But this should be a welcome step forward for patent owners.”

And a more relaxed amendment standard could especially benefit patent assertion entities, or companies whose businesses revolve around licensing their patent portfolios.

“In nearly every substantial portfolio, there will always be a certain percentage of patents that, whilst valid, do not possess claims that are in a suitable format for assertion in China due to lack of options to amend the protection scope to exclude things such as newly discovered prior art,” he said. That means, at present, “while patents from the same family in other countries could be enforceable, the Chinese patent may not be.”

The revision also adds language saying that examiners should consider experimental data submitted after the patent application is filed. Such data is usually used to illustrate things like the technical effect or enhanced efficacy of an invention, which both Huang and Chwu said should help life sciences companies.

SIPO is accepting comments on the draft until Nov. 27. Comments may be emailed to: tiaofasi@sipo.gov.cn.

To contact the reporter on this story: Peter Leung in Washington at pleung@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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Text in Chinese available at http://src.bna.com/kbM

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