CNIPA clamps down on ‘abnormal’ application practices in fresh drive for patent quality

The China National IP Administration (CNIPA) has released official statistics, which show that the total number of patent applications for inventions, utility models and designs filed in China is increasing against the backdrop of the covid-19 pandemic. The colossal volume of patent applications filed by domestic applicants and the mixed quality of applied-for patents have long been criticised by domestic and international stakeholders. Some attribute this to government initiatives that encourage patent applications by offering financial incentives. Others blame unethical patent agencies acting as enablers and knowingly drafting junk patent applications for their clients. In response, the CNIPA has rolled out measures calling for the termination of all patent subsidies and prohibiting so-called “abnormal patent applications”.

On 27 January 2021 the CNIPA issued a notice on tightening regulations for patent applications, urging that all financial aids – including any subsidies, grants or rewards at the patent filing stage – should be terminated by the end of June 2021. The notice explicitly stipulates the following:

• The existing local funding is to be limited to granted invention patents including those acquired overseas through the Patent Cooperation Treaty or other routes. Funding should be post-grant subsidies.
• The total amount of funds received by the applicant should not exceed 50% of the total official fees before the patent offices.
• Patent annuities, fees charged by patent agents for services rendered or other commissions charged by intermediaries should not be funded.

The notice calls for the phase-out of all financial aids to granted patents until these come to an end by 2025. The notice also discourages the practice of using the number of patent applications as a key parameter for assessing department performance or apportioning quota for the number of patent applications to local government, business or agencies by means of administrative mandate or guidance.

On 11 March 2021 the CNIPA released its measures on regulating patent filing behaviours. These aim to rein in patent applications that contravene the legislative purpose of the Patent Law, breach the good-faith principle and are not driven by protection of innovation.

The measures state that the following elements and actions will be considered abnormal in a patent application:

• filing simultaneously or successively multiple applications with a substantially similar invention or simple combinations of different invention features or elements;
• filing an application for a fabricated, forged or altered invention, experimental data or technical effects, or for the prior art or designs that are plagiarised, merely displaced or cobbled together;
• filing an application for ’inventions-creations’ that obviously fails to match the applicant’s actual R&D capabilities and resources;
• filing multiple applications for inventions-creations that are randomly generated from computer programs or other technologies;
• filing an application for inventions-creations that is obviously inconsistent with technical improvement or common sense so as to evade patentability examination, or that is deteriorated or jumbled up inventions-creations or the inventions-creations with unnecessarily limited scope of protection so that it had no actual protection value or had no content worthy of search or examination;
• filing multiple patent applications that are substantially associated with or controlled by a specific applicant in a scattered or sequential order or in a different location so as to evade the regulatory measures over abnormal patent application behaviour;
• filing profiteering patent applications with no legitimate purpose or falsely altering inventors or designers;
• instances where patent agencies, attorneys or other organisations or individuals induced, instigated or conspired with others, or knowingly acting as an agent or helped other to implement various abnormal patent application behaviours; and
• other abnormal patent application behaviour or related misconducts that violate the principle of good faith and disrupt normal patent work.

The measures detail the examination procedure for handling abnormal applications and also allow applicants to seek remedies through administrative reconsideration, reexamination or litigation in case of disagreement with decisions made by the CNIPA.

An applicant that is found to be engaged in abnormal patent filing will be subject to disqualification for fee reductions, and where the case is so serious as to constitute crime, subject to criminal prosecution. Patent attorneys or agencies knowingly taking part in the filing of abnormal applications will be disciplined by the All China Patent Attorneys Association or in case of serious circumstances or recidivism, be subject to CNIPA sanctions.

On 6 May 2021 the CNIPA released the draft amendment to several provisions concerning the regulation of patent filing behaviours to solicit public opinion. The draft uses the provisions on abnormal patent filing behavior from the measures without making substantial adjustments.