China’s Supreme People’s Court (SPC) recently circulated its Draft “Provisions on Several Issues concerning the Adjudication of Administrative Cases on Granting and Affirming Patent Rights (I)” (最高人民法院关于审理专利授权确权行政案件若干问题的规定（一）). This Draft aims to address issues concerning administrative court adjudication and Patent Review Board (“PRB”) decisions regarding both patent examination and patent validity.

The Provisions apply to:

1. patent grant cases which are court appeals filed by patent applicants that are dissatisfied with the decision handed down by the PRB following re-examination of their patent application. The provisions further apply to
2. patent validity cases which are court appeals filed against decisions at the PRB pertaining to patent validity or invalidity. Both (1) and (2) are administrative cases handled by the Beijing IP Court and the Beijing Higher People’s Court (on appeal).

Claim construction, supplemental data (pharma), patent amendments, design patents and procedural issues

Claim Construction: As to claim construction in patent grant cases, the Provisions reiterate that courts should interpret the terms of the claim according to the general knowledge of the person skilled in the art. If the claim recites special or unique definitions which are adequately supported in the specification and drawings, then these special or unique definitions should be used in the claim construction.

Additionally, for patent validity cases, the Draft Provisions provide for two options: (1) claim construction following the same approach as for patent grant cases (see paragraph above); or (2) claim construction as used in patent infringement cases, whereby the courts interpret a term in a claim, by considering that claim as a whole, as well as the specification and the drawings. The main practical difference between approaches (1) and (2) is that approach (1) does not exclude extrinsic elements such as interpretations by the person skilled in the art, while approach (2) does exclude extrinsic evidence: interpretations are solely conducted on the basis of the patent document itself. Furthermore, similar to practices developed in the US and in some EU jurisdictions, patent prosecution file wrappers can be used for defining or construing the terms (i.e. in certain situations “patent prosecution estoppel” may apply). If a term is still difficult to determine after evaluating the above claim construction methods, the courts may use well-known technical dictionaries, reference books, textbooks, commonly used national or industrial technical standards or technical manuals.

Furthermore, for patent validity cases, the court would have the power to refer to the patentee’s construction in past or on-going patent infringement proceedings, to avoid the so-called “angora cat” problem: narrow construction during defense of the patent’s validity, and expansive construction during its enforcement.

Moreover, if obvious errors in grammar, words, numbers, punctuation, figures, symbols etc. occur in the claim, the description or the drawings, the term(s) at issue should be interpreted as a person of ordinary skill in the art would read the claims, description and drawings as a whole.

Supplemental data: A hot topic in the prosecution and litigation of pharmaceutical patents is whether parties can provide supplemental experimental data during examination and/or invalidity proceedings to help show and/or prove concepts such as inventive step or sufficient disclosure.

The Provisions provide that supplemental data may be acceptable for proving whether “technical effects” described in the specification are disclosed (i.e. sufficiency of disclosure) or that the claims have technical effects sufficiently distinguishable over the prior art (i.e. inventive step) provided that such “technical effects” can be unambiguously confirmed by a person of ordinary skill in the art based on the specification and common knowledge as of the date of the patent filing. The court can also order the party submitting the data to provide evidence regarding the objectivity and the source of the supplemental experimental data, and may appoint a court expert to evaluate the supplemental experimental data.

Patent amendments: The most notable and important proposed change under the Draft Provisions is the more flexible acceptance of claim and specification amendments by the patentee. Under existing practice, amendments to an invention patent application cannot go beyond the scope of the original disclosure and original claims and drawings. Especially considering that the originally filed claims are presented prior to receiving an initial Office Action from the Chinese Patent Office, not being able to amend the claims during prosecution beyond the original scope of the claims is often criticized as being impractical and draconian. In contrast, the Draft Provisions provide that as long as the claim amendments are sufficiently supported by the original specification, the amendments should be acceptable.

Design Patents: The Draft Provisions clarify the assessment of “design space” and functional features for design patents. The Provisions note that when assessing the knowledge and cognitive ability of the average consumer (in order to determine whether a consumer would find similarity between designs) the “design space” of the product incorporating the design should be considered. Regarding “design space”, the following may be weighed: the function and use of the product, the coverage of other existing designs, common designs for similar products, compulsory provisions of law and regulations, and national and industry standards applicable to the products.

The Draft Provisions moreover state that functional aspects will generally not impact the overall visual effects of a design patent, except the positional relationship between the particular design feature in issue relative to other design features. The Provisions further note that with respect to determining unique visual effects of the patented design (for validity considerations), the following factors may be considered: design space of the product, degree of association among the products, number and complexity of the designed features, and the ability of splicing or replacing design aspects between the design patent and the prior art.

Procedural issues and avoidance of repetitive litigation: The Draft Provisions also clarify some concerns regarding procedural errors by the PRB, by stating that the PRB violates Article 70 (3) of the Administrative Procedure Law, if the PRB:

1. omits facts and reasons presented by a concerned party that has substantively affected the rights of the concerned party;

2. fails to have some panel members abstain from the re-examination or invalidity procedures if circumstances require it; or

3. fails to notify a concerned party to participate in the re-examination or invalidity procedure where the concerned party had raised objections to validity.

The people’s courts can also revoke erroneous parts of a decision, if the decision of the PRB:

1. erred in assessing a party’s claims, even if the remainder of the assessment is correct, or

2. erred in determining some design aspects in a design patent application, even if the determination of the remaining design aspects is correct.

However, if the PRB fails to determine facts or apply the law correctly, but its conclusion on the patent validity is correct, the people’s court can dismiss the plaintiff’s request without revoking the decision.

Finally, the Draft Provisions also address some procedural abuse that has arisen under the current rules. Since the courts can only rule on whether or not the PRB erred in its reasoning or conclusion, and cannot replace the decision itself (in such cases the courts merely remand the case back to the PRB for reconsideration), some parties have repetitively filed appeals against PRB decisions to the courts, even if the updated PRB decision was in accordance with an earlier decision by the courts. The Provisions would make such procedural abuses impossible by providing that appeals against PRB decisions that are simply re-issuing a decision based on a prior court decision will be deemed inadmissible by the courts.

Conclusion

The Draft Provisions are largely welcomed by patent practitioners in China, given their breadth of coverage and focus on important issues that have come up during the course of patent re-examination and validity evaluations at the PRB. While most of the provisions are intended to clarify or resolve known issues, the SPC does break new ground with respect to certain key issues. For example, with respect to amendments made during prosecution, the SPC explicitly provides that amendments should be accepted so long as they are adequately supported by the specification -which mirrors other international standards for claim modifications, where the question of whether the amendments go beyond the original scope of the claims is not an issue. Moreover, the SPC also enshrines some established jurisprudence in these Provisions, by clarifying the correct approach for claim construction, and also accepts that courts can refer to the patentee’s statements during a parallel or earlier patent validity case. These updates are consistent with China’s continued efforts in creating a more robust and sophisticated patent protection system. If finally adopted, these new Provisions will likely bring increased legal certainty to China’s patent examination and invalidation procedures. We will keep you updated as to future developments on this topic.

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