China (SIPO) Proposed Amendments Patent Examination Guidelines

On October 27, 2016, the Chinese Patent Office – State Intellectual Property Office (SIPO) published Revised Patent Examination Guidelines draft to remove the software and business method patents hurdles in Chinese Jurisdiction. The published draft will be open for public comments till November 27, 2016.

Chinese Patent Law, under Article 25(2) mandates that patent rights shall not be granted for “rules and methods for mental activities”. Such provision under Article 25(2) is frequently resorted to by patent examiners during examination for rejecting computer implemented business method patents. SIPO spotted the concern that although many patents are related to technical subject matter but they are concluded as “rules and methods for mental activities”, and hence not a patent eligible subject matter. To address the concern, SIPO proposed to amend the patent examination guidelines that relates to software patents as well as business method patents.

  1. Proposed Amendment clause with respect to Business Method:

Proposed draft elucidates, “Claims related to business methods that contain both business rules and methods and technical characteristics, shall not be excluded from the possibilities of obtaining patent rights be Article 25 of the Patent Law.”.

This proposed amendment, if eventually accepted, will certainly elevates the ease to obtain business method patents as the amendment provides clear elucidation to the patent examiners that the claims would not be rejected under Article 25(2) barely on the basis of a business method or rule.

According to this proposed clause, if a claim contains both business method and technical characteristics, the examiner shall not reject the claim on the grounds that the claim relates to “rules and methods for mental activities” under Article 25.

  1. Proposed Amendment clause with respect to Computer Software:

Another proposed change is made in the second line of Part II, chapter IX, section 5.2, paragraph 1, the third sentence of the Patent Examination Guidelines are amended from, “and describe in detail which parts of the computer program are to be performed and how to perform them” to provide that “The components may not only include hardware, but may also include programs.” Another proposed clause of revised draft states that apparatus claim related to computer software program will be eligible for patent rights, if it includes both hardware features and features pertaining to computer software programs. Such programs feature will be considered equally to the hardware features and shall not be treated as merely features so as to bar for patent rights. Further, the guidelines also clarifies that software per se is not a patent eligible subject matter as they are rules and methods for mental activities.

These revised amendments substantiate that red flags generated by examiner indicating non-patentability only on the ground of business method and software will no more exist. The examiners who are more vigilant in treating the patents under business method and software per se are now being addressed by Chinese Patent Office. Amended draft itself explains that claims relating to a business method are not excluded from patentability if they contain sufficient technical features.

iii. With respect to amendment of granted claims:

The proposed revised draft also focuses on amendment of granted claims. As per the current scenario, applicant can only either delete or combine the granted claims, wherein the revised draft proposal allows the applicants to make amendments in granted patent claims. Now, patentees will be able to add limitations from another granted claim in the same patent, but such amendment must be under certain limits. Claim can be amended as far as it is supported by the specification. This amendment will especially benefit those patent assertion entities who mainly focuses on licensing their patent assets.

These amendments will certainly attract worldwide companies that are generating software to enforce and monetize their IP. As China market will become more hospitable in software patents, companies across the globe will certainly try to grab the opportunity in China market.

Also the patent examination guidelines are not to be construed as law but rules for patent examiners at China’s State Intellectual Property Office (SIPO) to get educated about how to appropriately examine the patent applications.

About the Author: Kumar Tushar Srivastava, Sr. Patent Associate at Khurana & Khurana, Advocates and IP Attorneys and can be reached at tushar@khuranaandkhurana.com

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