China Top Court Rules Utility Model Patent Unenforceable if Corresponding Invention Patent Application Fails to Grant

By Kirwin Lee, Senior Associate

Chinese patent law allows applicants to file a utility model application and an invention application for the same subject-matter on the same day. For this reason, together with the fact that Chinese utility model applications are usually granted earlier than invention patent applications, many applicants incorporate a “double filing” strategy in order to secure early protection for their products as well as to effectively extend a period during which enforceable patent right is available. However, a potential downfall of this strategy is confirmed in a recent decision handed down by the Intellectual Tribunal of China’s Supreme People’s court, which ruled that a utility model patent cannot be enforceable if the corresponding invention patent application is not deemed allowable.

The appellant Anhui Langting Landscaping Engineering Service Co., Ltd (“Langting”) and Mr Sun were previously involved in an infringement lawsuit of the utility model patent (ZL200920242493.4). Mr Sun had filed both a utility model application and an invention patent application on the same day for the same subject-matter, a “greening case” for growing plants. The utility model was granted within 8 months, but the invention patent application was rejected during substantive examination for lacking novelty and inventiveness.

Mr Sun believed that Langting infringed claims 1 to 5 of the utility model patent and filed a lawsuit with the Hefei Intermediate People’s Court of Anhui Province, requesting an injunction to cease Langting from manufacturing, selling, promising to sell, or using the allegedly infringing products, to destroy the infringing products as well as the moulds for manufacturing the infringing products, to remove pictures of the infringing products from their website, and to compensate its economic losses of 150,000 yuan (~£16,800) and investigation and evidence collection fees of 3,200 yuan (~£360). Based on the pictures displayed on Langting’s website, the Intermediate People’s Court held that they had infringed Mr Sun’s utility model patent. However, because the patent has expired, it was ruled that Langting shall only bear the liability for civil compensation of 60,000 yuan (~£6,800). Langting then appealed to the Supreme People’s Court (SPC), with their appeal request asserting that claims 1 to 7 of the utility model patent did not meet the necessary requirements and thus no protection should have been granted. On 29 December 2020, the SPC overruled the original judgement and dismissed Mr Sun’s litigation request.

Claim 1 of the utility model patent in question reads:

“A greening case including a case body and a hole at the bottom of the case body, characterised in that the case body is composed of a wall surface and a bottom surface, and the bottom surface of the case body has an upward convex hole.”

Considering the very broad wording of claim 1, unsurprisingly the invention patent application was rejected by the CNIPA as lacking novelty and inventiveness. However, due to the lack of substantive examination for utility model applications, the corresponding utility model was granted. Mr Sun then filed a request for re-examination, but the Patent Re-examination Board maintained that the invention patent application was not patentable. Not satisfied with this decision, Mr Sun then filed an administrative lawsuit with the Beijing Intellectual Property Court, which was later dismissed. The administrative judgment of the first instance was upheld by the Beijing Municipal High People’s Court.

Furthermore, on 29 May 2018, the State Intellectual Property Office issued an evaluation report on the utility model patent rights involved in this case and concluded that the claims are not novel or inventive.

In the decision, the SPC provided some clarifications on the circumstances under which the outcome of the examination of the invention patent application would affect the protection of the corresponding utility model patent. Generally speaking, if the applicant accepts the outcome of the examination of the invention patent application, or if no prior art references were used and the invention patent application was rejected due to the lack of novelty, it can be concluded that the protection of the corresponding utility model application should take into account the examination outcome of the invention patent application.

However, if an invention patent application is rejected for lack of novelty, the differences between the inventiveness requirements of the invention utility models should be properly considered. These differences primarily relate to the technical field and the number of prior art documents used. For example, if there are no significant differences in the technical field considered or the number of prior art references used, the examination outcome of the invention patent application would likely affect the protection of the corresponding utility model patent.

Although there are differences in inventive requirements between invention and utility model patents, these differences are primarily reflected in the technical field of the current state of the art and the number of prior art references used. In this case, only one prior art reference was used, the reference belonging in the same technical field as the subject-matter of the utility model application. This reference is also the same document that confirmed the lack of novelty of the corresponding inventive patent application. In addition, the evaluation report issued by the State Intellectual Property Office also puts the validity of the utility model patent in doubt.

In considering the circumstances of the case, the SPC therefore held that all the claims of the utility model patent in question are unlikely to possess any novelty or inventiveness. Furthermore, taking into account the fact that the utility model patent has expired, it was not considered to belong to the “legitimate rights and interests” protected by the patent law. Accordingly, it was ruled that Mr Sun’s claims based on the claims 1 to 5 of the utility model patent involved should all be rejected in favour of Langting.

This is for general information only and does not constitute legal advice. Should you require advice on this or any other topic then please contact hlk@hlk-ip.com or your usual Haseltine Lake Kempner advisor.