Shu XU - Partner, Patent Attorney

Since June 1, 2021, the Patent Law of the People's Republic of China has been officially in force upon the fourth amendment. Among these amendments, Article 42.2 of Chinese patent law has specifically put in place the patent term compensation mechanism, which specifically stipulates: "if a patent for invention is granted after four years from the filing date and three years after the date of the request for substantive examination, the patent administration department under the State Council shall, at the request of the patentee, compensate the patent term for the unreasonable delay during the examination procedure, except for the unreasonable delays caused by the applicant."

However, since the newly amended Patent Law entered into force, up till August 6, 2024, it has taken more than three years for the Implementing Regulations of the Chinese Patent Law and the Guidelines for Patent Examination to take effect one after the other. The lack of clarity on how to define the reasonable and unreasonable delays and the rate of fees to be paid has led to a constant backlog of requests filed for patent term compensation, a situation which is somewhat puzzling.  .

In practice, in the Implementing Regulations of the Patent Law and the Guidelines for Patent Examination, which have been in effect one after the other, most relevant provisions on patent term compensation are set forth in principle, and the China National Intellectual Property Administration (CNIPA) has not yet released the specific detailed determination standards on matters including the beginning and end of various time limits, which makes it difficult for patentees to figure out the length of compensated term they could possibly receive after the patent grant.

In response to the public concerns about the patent term compensation system, the CNIPA published the revised Interpretation (II) of the Patent Examination Guidelines (2023 edition) on its official website on January 18, 2024, explicating the background of the revision, the specific changes, and offering explanation of the amendments made to the patent term compensation system. On top of this, a patent term compensation calculation formula is provided, which is designed to help applicants more accurately understand and calculate the compensation term they could possibly receive.

Invention patent compensation period = (D _{date of grant} – D _{date of expiration of 4 and 3 years}) – T _reasonable – T _{unreasonable (applicant)}

Therein

D _{date of grant} refers to the date on which the patent is announced;

D _{date of expiration of 4 and 3 years} refers to the date of four years from the filing date of the invention patent and three years from the date of request for substantive examination, whichever is later;

T _reasonable refers to the number of days of reasonable delays, for example, delays resulting from an ownership dispute or suspension of the examination process for property preservation;

T _{unreasonable (applicant)} refers to the number of days of unreasonable delays caused by the applicant, including the time delayed due to the applicant's request for extension of the designated time limit or request for examination postponement, etc.

In fact, despite the release of the formula and instructions, patentees are still confused after trying to understand, finding it difficult to grasp how to calculate the compensation term due. This begs the question: as we all know, the patent term compensation system did not originate in China, but in the United States. When introducing the patent term compensation system, we took into account the practices of the United States, Japan, and Republic of Korea. Why can't the CNIPA learn from the practice of the United States Patent and Trademark Office (USPTO) and provide more convenient and faster services to the patentees? In the United States, patent term compensation is automatic and does not require patentees to initiate a request, especially if the delays are caused by the examining authority.

The United States Inventors Protection Act, which came into effect in 1999, established the Patent Term Adjustment (PTA) System in the USA, the core principle of which is to compensate for unreasonable delays in the patent examination process due to reasons not attributable to the applicant. United States law clearly defines the delays of the examiner during the examination process, the delay of the applicant, and how to deal with the overlap between the two. When the USPTO issues a notice of grant, it automatically informs the patent applicant of the term compensation available for patent applications that meet the conditions for patent term compensation, and can automatically obtain term compensation without the need for the patentee to submit additional requests and pay any fees. This automatic compensation mechanism not only reduces the burden on patentees, but also shows respect for, and friendliness towards the rights and interests of innovators.

We hereby suggest, on behalf of the patentees, to the CNIPA to simplify and eliminate the process for patent term compensation and related fees, especially with regard to the delays caused by the examiners, clarify compensation standards, and enhance transparency. This will better reflect the nation's respect for the intellectual achievements of innovators, help stimulate more inventions and creations, and ensure due protection and compensation of the rights and interests of the patentees and inventors.

Author’s Profile

Mr. Shu XU graduated from Tsinghua University with a major in accelerator physics and law, and worked as an assistant researcher at the Institute of High Energy Physics, Chinese Academy of Sciences. Subsequently, he worked as a patent attorney in the CCPIT Patent & Trademark Law Office and China Patent Agent (H.K.) Ltd. (CPA). In 2007, he joined Beijing Panawell and Partners LLC as a partner.

Mr. Shu XU has received training in intellectual property law at intellectual property law firms in Japan, Germany and United States.

Mr. Shu XU has been engaged in intellectual property legal services for 39 years, serving a wide range of domestic and foreign clients, including universities, research institutions, enterprises and individuals. He has extensive experience in intellectual property legal consultation, patent search, patent assignment and licensing, domestic and foreign patent prosecution management, and patent registration in Hong Kong and Macau. He was invited to participate in the revision of the chapter of the CNIPA Guidelines for Patent Examination on entry of international applications into the national phase in China.

Mr. Shu XU is a member of the All-China Patent Attorneys Association and a member of the Association’s Laws and Regulations Committee.