1. IP Protection in China – Recent Developments and Challenges for Colorado Businesses
Larry Lian
Attorney Advisor
Office of Policy and International Affairs
United States Patent and Trademark Office

2. USPTO 2014-2018 Strategic Plan – Data Driven Decision and Policy Making
“[D]evelop empirical data and analysis” by “establish[ing] the China Resource Center” and “expanding [other programs]”;
“[E]xpand knowledge of the domestic and international IP landscape and public impacts of IP through empirical research and fact-finding”;
“The results of the [empirical data] research … to guide USPTO initiatives and policy recommendations.”

3. First License of Chinese Patent to US
Corresponding patent in China granted by Zongli Yamen (China’s imperial State Dept)
Then-U.S. Secretary of State, John Milton Hay (also President Abraham Lincoln’s personal secretary) exchanged communications on the enforcement of these patents in China in 1899

4. Foreign Related Civil IP Cases
All Plaintiffs
Foreign
1st instance  win rate
71%
81%
2nd instance win rate
70%
Source: Ciela/Rouse International

5. Foreign Companies File Relatively Few IP Cases
Foreign Related Civil IPR Cases only 1.8% in 2014
However, 45% of judicial appeals of
SIPO & CTMO decisions are by foreign companies 5

6. Number of Patent Applications at SIPO and USPTO
2016: 5.3 times of USPTO, 3.47 million to 650,000
On track to 10 times of USPTO by 2020.
Contrast not as drastic in terms of invention patents.
Take a step back,
USPTO 92% utility 8% design = 8%
SIPO three types (invention, UMP, design). Invention = our utility, UMP we don’t have. UMP and design not examined.
40% invention, 40% UMP, 20% design
In terms of invention patents (i.e., our utility patents). In times as many applications, 1.3 times as many issued patents
UMP & Design contribute to the drastic difference more than invention patents.
But big picture, lots of patents, UMP and designs are patents, enforceable legal rights.
July 2017 YTD cumulative filing: invention applications 682,513, ump 906,533, design 333,740 (July 2017 is the latest number)
July 2016 YTD cumulative filing: invention application 678,707, ump 833,430, design 354,854.
*** details ***
2016 number of invention applications (not corresponding to 2016 application of course)
2.2 times of USPTO, SIPO: 1.34 million, USPTO 607,000
Issued invention patents:
1.3 times of USPTO, SIPO 404,000, USPTO 304,568
Total issued patents: SIPO 404, ,000 UMP + 446,000 designs = 1.75 million
Source: USPTO Annual Performance and Accountability Report 2016 and SIPO Annual Report 2016

7. In Depth Analysis of Cases on Important Bilateral Issues – supplemental data as an example
Original application discloses effect 1 (e.g., stability), supplemental data can only show surprising stability? For supplemental data to be accepted to show surprising results, such data needs to be on effects/properties that: (1) “inherently flow” from the original specification (In re Zenith, 333 F.2d 924 (CCPA 1966) , MPEP (f) (2) “there is some description [in the original specification] enough for a person ordinarily skilled in the art to recognize or assume the ‘effect of invention’ therein (Japan IP High Court, case number 2009 (Gyo-ke) 10238)
Crucial for pharmaceutical companies’ ability to obtain patents on novel compounds
Rules on supplemental data are complex. However, point here is not to explain how the rules work. But to highlight as an example China Resource Center performs in depth analysis of cases from all IP5s on complex legal issues that are important to U.S. companies.
Original application discloses effect 1 (e.g., stability), supplemental data can only show surprising stability?
SIPO: yes. Other IP5s: surprising effect 2 is acceptable if effect 2 can be implied.

8. In Depth Analysis of Cases on Important Bilateral Issues – supplemental data as an example
(3) “relate to effects that are explicitly described in the original specification or can be inferred from the descriptions in the original specification” (Korean Supreme Court, case no Hu 3234; and Korean Patent Court, case no Heo 8958) (4) “are implied by or at least related to the technical problem initially suggested” in the original spec. (EPO Examination Guideline Part G Chapter VII-11) SIPO revised its Examination Guidelines in October 2016 – supplemental data accepted if the technical effect is “obtainable” from the as-filed specification by a person of ordinary skills in the art

9. China IP Databases Ciela Darts-IP (Global) IP Publishing House
IP House

10. Darts-IP Average Patent Infringement Damages

11. China IP Case Search System (IP Publishing House)

12. Thanks!
Larry (Lubing) Lian

14. U.S. Applications filed by Chinese Nationals
2015: 22,400 (18% growth since 2014)
9/17/2018

15. Patent Application Pendency Length and Allowance Rate

16. “Big IP” to “Strong IP”
China’s traditional emphasis on quantitative matrices;
December 2014, State Council approval of “Action plan of the National IP Strategy”
“For the first time clearly put forward the goal of building a strong IP country”
“首次明确提出了“努力建设知识产权强国”的新目标” *
October 2015, Thirteen’s Five Year Plan,
“Strengthen the Utilization and Protection of IP, Investigate Establishing a Specialized IP Court” **
December 2015, State Council Opinion on Building a Strong IP Country (“国务院关于新形势下加快知识产权强国建设的若干意见”) ***
Sources: * **
***

17. Number of Patent Licensing Transactions 2009-2015
Innovation Outreach Program
9/17/2018
Number of Patent Licensing Transactions
Source: “2015 Report on Patent Transactions in China” ( “ 2015年中国专利运营状况研究报告”），IP Publishing House
© 2011 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.
The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

18. Innovation Outreach Program
9/17/2018
Licensing by the Universities
Source:
© 2011 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.
The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.