Invention Patents . Must be a new solution for a product or process
An invention patent must not have been previously published overseas or in China, and must not have been used in China. When compared to existing technology the invention patent must have an advantage and can be made as well as used. Previously published refers to whether it has been disclosed to the public through publications such as newspapers, magazine, journals, onĀ]line publications etc. before the application date of the patent. If an identical invention creation has been published before the application date this will destroy novelty of the patent. It is important to note that any publications published after the application date may be used to determine the creativity of the patent.

Invention Patents are legally protected for 20 years from the application date.

Utility Models . Must be a new solution relating to a productĀfs shape or structure
A utility model must not have been published overseas or in China, and must not have been used in China. When compared to existing technology the utility model must have an advantage and can be made as well as used.

Utility Models are legally protected for 10 years from the application date.

External Designs . Must be a new design relating to the shape, pattern, and/or colour of the product
An external design patent must not have been published overseas or in China, and must not have been used in China. In addition an external design patent cannot conflict with the prior lawful rights of another person.

The phrase "used not have been used in China" means that the product or process has not been used publically used in China. As a general rule, if a company sells their products in China before filing for registration this will destroy the novelty of the patent. This is unless they have filed an international patent application under the Patent CoĀ]operation Treaty designating China as a country.

External Designs are legally protected for 10 years from the application date.

The Patent Application Examination Process

• Invention Patents ā€“ Must undergo preliminary and substantive examination. Preliminary examination assesses the form of the documents, and does not examine the actual content of the patent application. Substantive examination is an examination of the content of the patent application.
• Utility Models ā€“ Only have to undergo preliminary examination.
• External Designs ā€“ Only have to undergo preliminary examination.

Filing the Patent Application
Patent applications are filed with the Examination Department of the State Intellectual Property Office (SIPO). The applications must be filed in written form or electronic form in Chinese characters. The actual patent application will generally contain a description, figures/drawings, claims and an abstract. 'Claims' are the part of the patent application where the inventor specifically states what their invention is and what it does. Claims define the legal scope of a patent and define what can be protected by patent law. You could say that claims define the invention or utility model.

Examination of the Patent Application
After the application is filed then examiners from the SIPO conduct a preliminary examination of the patent application. Preliminary examination is a relatively simple procedure where the examiner checks whether the necessary application documents and other forms have been filed, whether there are obvious substantive defects in the application forms, and Patents, Design Patents and Utility Models whether the relevant fees have been paid.

Grant of Utility Models and External Designs
If there are no substantive defects or other issues with the preliminary examination then a utility model or external design will be granted patent rights.

A utility model or external design patent will be published in either the Utility Model Patent Gazette or the External Design Patent Gazette.

Substantive Examination & Grant of Invention
After successfully undergoing preliminary examination an invention patent will be published in the Invention Patent Gazette 18 months after the application date.

Within 3 years of the date of patent application the applicant may request substantive examination from the SIPO.

If the invention patent is successfully examined then it will be granted patent rights and published in the Invention Patent Gazette. New issues of the Invention Patent Gazette, Utility Model Patent Gazette, and the External Design Patent Gazette are published once a week. This document is one publication that contains three sections (Invention Patent Gazette, Utility Model Patent Gazette, and the External Design Patent Gazette). Hard copies of these can be purchased from the SIPO.

Forms Required for External Design Patent Application
When applying for an external design patent the following forms must be filed: a request, drawings or photographs of the design, and the product incorporating the design and patent class must be indicated. These A4 forms can be found on the SIPO website (www.sipo.gov.cn) must be filed in duplicate for an external design patent application: external design patent application (Form 13101) and the external design figures or photographs (Form 13102). If the requested protection regards colour then duplicates of the figures or the colour photograph must also be filed. If figures are filed with the patent application then no photographs can be filed and the figures must be in duplicate. If photographs are filed with the patent application then no figures can be filed with the application and the photographs must be in duplicate. If a description is required of the figures or photographs then a duplicate of the external design concise description (Form 13103) must also be filed. It is advised that a power of attorney (Form 10008) should also be signed with a patent attorney to manage the drafting and application process.

How to File an External Design Patent Application
Patent applications may also be filed electronically using the China Patent Electronic Application System (http://www.cponline.gov.cn/index.jsp). An account must be applied for before the China Patent Electronic Application System can be used to file a patent application electronically.

Foreigners without a registered business in China are unable to file patent applications electronically using the China Patent Electronic Application System. They must appoint a patent agency that has been approved by the SIPO to manage the patent application process and drafting of the patent application. The online system is user friendly but it is recommended that you hire a patent attorney if you are legally required to file a patent through a registered patent agency, and if this is your first time in doing so. The system can be used to file all three types of patents.

An application for an external design patent includes any of the following combinations of a product:

• The shape of a product
• The pattern of a product
• The shape and pattern of a product
• The shape and colour of a product
• The shape, pattern and colour of a product

The colour of a product alone cannot constitute the design of a product unless the change of colour can be regarded as a pattern. Colour does not include the natural colour of the raw material of the product. It is recommended that a combination of the colour of the machine, together with either the shape and/or pattern, should be applied for in order to prevent the patent being easily invalidated after it is granted patent rights.

The applicant should as far as possible show why the external design is a 'new design'. The preliminary examiner will only consider whether the design is a 'new design' according to the application documents and the common sense of the average consumer. However, a correctly drafted external design patent application highlighting why the design is a 'new design', how it can be used by industry, and that it can be manufactured in batches will prevent the patent being easily invalidated. If a particular feature has a practical application, rather than being used merely because it looks good, applying for an invention patent or utility model should be considered.

Once you have obtained external design patent protection no entity or individual can exploit your external design patent. That means that they cannot make, sell or import a product that incorporates the patented design for production or business purposes. It is important for patent owners to know that when someone offers to sell a product that incorporates the patented design this is not an act of patent infringement. For example, during a trade fair an individual may offer to sell you a product which infringes your external design patent in a product catalogue or by merely stating this orally. At this stage there is nothing that you can do as this is not an infringing act. Only when that individual actually manufacturers, sells or imports the product which infringes your external design product does it become an infringing act which will provide you with grounds which to file a lawsuit with the courts.

According to the official SIPO 2007 Annual Report, the average time required to be granted a patent was:

Preliminary examination of invention patents	2 years 2 months
Utility models	6.8 months
External designs	6.6 months

Substantive examination for invention patents will vary depending on the technical nature of the invention. Viagra took seven years to be granted patent rights, while others take considerably less time.

Patent Application Fees
There are three broad fee categories regarding patent applications: preliminary patent application fees, substantive examination fees, and other miscellaneous fees.

The preliminary patent application fees must be paid within 2 months of filing the patent application with the SIPO. For 2008 the basic application fee for invention patents is RMB900, utility model RMB500, and external design patents RMB500.

A substantive examination fee of RMB 2500 must be paid within three years from the date of filing the patent application.

Other miscellaneous fees that may need to be paid at the time of filing the patent application also include priority fees (a fee that must be paid if a company wishes to claim the benefit of an earlier filing date of a prior foreign application) which are RMB80, and/or additional fees if the application exceeds certain limits regarding length of the description or number of claims.

For time extensions a fee of RMB300 must be paid for the first month. If a further month's extension is required, a fee of RMB2000 must be paid. If a patent application has more than 10 claims, any additional claim has a fixed fee of RMB150. For patent applications that have more than 30 items in the description an additional RMB50 must be paid per claim.

Payment of Patent Application Fees
Fees may be paid through the post office or by bank remittance. The details for bank remittance are as follows:
Bank: China ICBC Beijing North Taipingzhuang Subā€Branch
Name: PRC SIPO Patent Department
Account Number: 0200010009014400518

The details for postal office payment are as follows:
Merchant Customer Number: 110000860
Payee: SIPO Patent Department Fee Office

SIPO officials will examine the description and claims of the patent, and whether it is novel, inventive, and is practically applicable.

A comprehensive search of prior art (whether there is anything published before the filing date of the patent which describes the same or a similar invention) and other relevant information is also collected. Another purpose of the search is to discover any conflicting applications or documents in order to avoid double patenting. The search provides a basis on which the examiner can determine whether the patent possesses novelty and inventiveness.

Stages of Substantive Examination: three stages
Preā€search stage: The examiner will first read the relevant documents cited as the basis for the application, the background technology, and documents which may help to correctly understand the subject matter. At the same time they will also check the International Patent Classifications and determine the technical fields that must be searched.

Searching stage: The patent examiners will primarily use computer searchable databases to conduct their searches. When conducting the search the examiner analyzes the claims of the patent and determines the elements to be searched. The examiner then searches in the technical fields to which the patent belongs, in technical fields of similar functions, and then may also refer to other materials. Manual searches by the examiner may also be conducted during substantive examination. The examiner also conducts a search for conflicting applications and in order to avoid double patenting.

Termination stage: the decision of the examiner to terminate the search must be based on the quantity and quality of the documents that have been obtained during the search. Factors influencing the examiners to terminate the search include time, energy, and the costs spent on the search that must be compared against cost considerations.

Administrative Action ā€ The administrative option involves filing a complaint with the State Intellectual Property Office (SIPO) or their local equivalent in the particular province, autonomous region, or municipal. A party may make an application to the SIPO or local equivalent to act as a mediator between parties involved in a patent dispute. SIPO's role is to assist the parties to reach a meditation agreement. If both parties sign and seal the mediation agreement this will be a legally enforceable document. The SIPO also has statutory powers to order a party to cease their infringing acts. If SIPO does order a party to cease infringing they will specify the type, object, and scope of the infringement.

Legal Action ā€ Legal action is where a party whose patent is being infringed may file a lawsuit with the courts. The Intermediate People's Courts, and those People's Courts designated by the Supreme People's Courts, are the courts that hear patent infringement cases of first instance. A party filing the patent infringement claim has the burden of proof. This means that samples of the patent infringement, details of infringers, proof of patent rights, and other evidence must be filed with the courts. Preā€litigation protection measures are available for patent owners i.e. injunctions, evidence preservation and property preservation. If preā€litigation protection measures are used then a lawsuit must be filed within 15 days of such measures becoming effective. The court may adopt evidence preservation and/or property preservation measures in the event that an injunction is granted.

If evidence is destroyed, lost, or is too difficult to obtain then the court will undertake evidence preservation measures. No surety is required to be paid to the court. If it is impossible or difficult to enforce a judgement or the lawful rights or interests of a party would suffer from irreparable harm due to the acts of another then an application for property preservation can be filed with the court. A surety must be provided to the court that will make a decision regarding this within 48 hours. Before the court will approve property preservation measures they will consider two aspects.

• The first is whether the relationships of rights and obligations of the parties are definite, and whether the refusal would seriously affect the life or business of the applicant.
• The second is whether the respondent is capable of fulfilling their obligations

In these circumstances the court will seal or detain evidence or property, freeze bank accounts, etc. There are also disciplinary measures if a defendant interferes with the preservation measures. For example if they break a court seal they will be liable to a fine by the court.

Foreign Invested Enterprises (FIEs) ā€“ FIEs can apply for patents in China without a licensed Patent Attorney. Patent attorneys can be hired by FIEs if the applicant is unfamiliar with patent application procedures in China.

Representative Offices (ROs) ā€ ROs are not considered legal entities in China and have to use a licensed Patent Attorney for any patent applications.

While it is not necessary for FIEs to use licensed patent attorneys, many do retain a patent attorney as the patent application process may be complicated and deadlines for notices must be strictly complied with. It is recommended that a patent attorney or law firm is retained for drafting the patent application and managing the patent application

Patent infringement can only occur after a patent is granted in China. Before a patent is granted in China patent rights for that patent application do not exist. For all three types of patents the applicant must wait until the patent is granted before they can take action against an infringing party.

For utility model and external design patents a party may only sue the infringing party for infringing acts that have occurred after the patent grant.

For invention patents, after the grant of a patent, a party may request reasonable payment from the infringer for any infringement that has occurred during the period from when the invention was initially published in the patent gazette and the grant of the patent. Invention patents are published in the patent gazette 18 months after the initial applications. However, there may be a significant time period before the invention patent is granted after substantive examination.

The applicant has limited options regarding preā€grant patent infringement. They may consider collecting as much evidence as possible regarding the infringer and the supply chain of the infringing goods. This will allow the identification of infringers and relevant evidence to be quickly used in any postā€grant patent infringement litigation.

China adopted utility model patents as they offer an easy method by which an innovative product can be granted patent rights.

The official goal of the Chinese government is to transform China into an innovative nation. Further reference can be made to the 2008 National IPR Strategy for the latest government policies regarding intellectual property. Utility model patents only cover products and the examination period is significantly shorter and less complicated than that required for invention patents. For utility model patents there is a lower threshold to meet for the test of inventiveness, meaning the product represents notable progress. Utility models do not have to go through substantive examination as required for invention patents, even though they are also required to possess novelty, inventiveness, and practical applicability. This means that utility models may be granted easily, yet can also be easily invalidated.

There are three practical steps that an SME should take regarding their external design products before they enter the Chinese market:

• If you don't have patent rights in China, you must file a patent application with the SIPO. Consideration must be given to the risk of infringers manufacturing and/or selling the product before it is granted patent rights. If a product is made public before patent rights are secured, there is the risk of a competitor applying for the patent, effectively preventing them from entering the China market.
• SMEs should also preferably conduct their own searches regarding whether an identical or similar product has been published in any publications in China or overseas, has been domestically used in China or whether it conflicts with the prior rights of another entity. Computer searches of patent databases as well as electronic copies of relevant scientific publications may be conducted to gauge a reasonably accurate assessment of whether the external design will lose its novelty.
• An intellectual property rights protection strategy, particularly focused on patents, must be tailored to the specific needs of the SME. This strategy must outline preventative measures used to minimize infringement risk once the product is released on the market. Measures should be put in place should you discover that your product is being infringed. Many SMEs outsource the regular monitoring of infringing products to a law firm who can monitor possible infringement and pursue administrative or legal action should infringement be discovered. Monitoring should be preferably conducted using both onā€line research and offā€line research to obtain information on any infringement. Any relevant information should be analyzed to determine a link between manufacturers, distributors, or retailers of any infringing goods.

If litigation is pursued then the patent owner or a licensee must take any legal action within 2 years of the date of the infringing act or from the time they should have known that the infringing act occurred. If the 2 year period is exceeded then the patent owner will lose the right to take action. There is no specific definition 'for should have know'. However, this may include the following: determined by the publicity of the infringement i.e. whether the products are displayed in popular publications, distributors losing profits and complaining to the company regarding this, sales teams' feedback to a company that infringements are on the market.

For invention patents there is a slight difference as a patent owner may require a reasonable royalty to be paid by anyone using the invention patent after it has been published in the Invention Patent Gazette, but before it has been granted patent rights. If the patent owner knows that another party is using their invention patent then the two year period will begin from the date of the grant of patent.

The time required to resolve an uncomplicated patent infringement litigation case is approximately 1 year. A patent infringement case should be concluded within 6 months from the date of filing with the first court. This may be extended a further 6 months. If the case is appealed it should be concluded within 3 months from the date of filing with the second court. This may be extended for a further 3 months

Patent Infringement Litigation Costs
The party filing for litigation must pay the following fees to the court:

• The case acceptance fee
• The case application fee
• The transport expenses
• Accommodation expenses
• Living expenses
• Pay for witnesses, authenticators, interpreters, and adjustment makers

The courts charge case acceptance fees. These are calculated according to the damages claimed in the following way:

Amount of Damages Claimed	Sum or Percentage Payable to Court
< 100,000 Yuan	50 Yuan
100,000 to 200,000 Yuan	2.5%
200,000 to 500,000 Yuan	2%
200,000 to 500,000 Yuan	1.5%
500,000 to 1 million Yuan	1%
1 million to 2 million Yuan	0.9%
2 million to 5 million Yuan	0.8%
5 million to 10 million Yuan	0.7%
10 million to 20 million Yuan	0.6%
> 20 million Yuan	0.5%

If there is no disputed amount or price in a patent infringement litigation case then an amount of between 500 Yuan to 1000 Yuan must be paid to the court as a case acceptance fee.

Damages in Patent Litigation
If a patent owner is successful in litigation the courts may award the successful party damages. Calculation of damages awarded by the court can be based upon the profit made by the infringer or the loss caused to the patent owner. The court will determine the calculation method according to the plaintiff's requests. If the loss to the plaintiff and the gain to the infringer is difficult to determine then a sum of 1 to 3 times a reasonable royalty for the patent may be awarded as damages by the court. If there is no royalty fee for the court to refer to or the royalty is clearly not reasonable the court may award statutory damages. The statutory damages normally awarded are between RMB5,000 to RMB300,000, and in exceptional circumstances may reach RMB500,000. Statutory damages awarded cannot exceed RMB500,000. If a court can access and assess the profits made by the defendant through the infringement by examining the tax records they filed with the State Administration for Taxation, then they may award the plaintiff compensation based on this calculation as it would constitute 'profit made by the infringer'. Judgements from the courts are enforced by the enforcement divisions of the courts.

Damages in Trademark and Copyright Litigation
For trademark and copyright infringement cases the court will also determine the damages using the profits obtained by the infringer or the losses suffered by the infringer. If damages are difficult to calculate according to these two methods then statutory damages of up to RMB500,000 may be awarded.

The assignment of a patent must be approved by the SIPO. The concerned parties must conclude a written contract, a Patent Assignment Contract (http://www.sipo.gov.cn/sipo/zlgl/htwb/doc4.doc), and register the contract with the SIPO. Registration of the agreement with the SIPO is the time that the patent assignment becomes legally effective. The transfer of the patent will also be announced by the SIPO.

Yes, you will have to pay further fees after your patent is granted which are known as patent annuities, which are paid each year. Payment must be made to the SIPO a month before the calendar year anniversary of the grant of the patent is reached. For invention patents, if they have not been granted in the second year since the application was filed then a maintenance fee must be paid in the third and subsequent years until the patent is granted. The following table provides a general guide to the amounts required for annuity payments for invention patents:

Year	1-3	4-6	7-9	10-12	13-15	16-20
Invention	900	1200	2000	4000	6000	8000

The following table provides a general guide to the amounts required for annuity payments for utility models, and external design patents:

Year	1-3	4-5	6-8	9-10
Utility Model	600	900	1200	2000
External Design	600	900	1200	2000

For further information please consult the annuity fee tables on the official SIPO website: http://www.sipo.gov.cn

Yes, it is worth it. Protecting your patent rights is difficult. However, if someone else obtains those patent rights they can harm you both legally and financially. Having patent rights is preferable to having no legal protection at all. The legal protection of intellectual property rights has improved significantly since China's accession to the WTO. This trend will continue in line with the official Chinese government policy to change China into an innovative country. Small and medium foreign invested enterprises can be assured of a more level playing field and greater protection of their intellectual property rights in the future.