Navigating the Patent Landscape in China

The Chinese intellectual property legal system has matured rapidly. Just 40 years ago China did not have a patent system, and today the country is aggressively using patent policy to create an innovation pathway.

While the United States continues to struggle with what is patent eligible, and just yesterday USPTO Director Andrei Iancu told the House Judiciary Committee during an Oversight Hearing that in many technology areas what is patent eligible is unclear, and is depressing innovation, the Chinese are taking a different path. In April 2017, China provided revised guidelines relating to the patentability of both software and business methods.

Previously, software related innovations were required to be claimed using “means plus function” language, which lead to very narrow protection. After the revised guidelines went into effect software related innovations can be protected as a “computer program product,” “a machine-readable medium,” and “an apparatus comprising a process configured to execute instructions on a computer-readable medium”.

With respect to business methods, claims relating to business models that include a technical feature in addition to business rules or methods are patent eligible under the new guidelines. Much like with software inventions, the new rules do not open the door wide to all kinds of business methods, but they do provide the opportunity to obtain some business method protection in China.

China has also worked hard to improve its court system and implemented changes at a breathtaking pace. Since 2014, three specialized IP courts in Beijing, Shanghai, and Guangzhou hear all first instance IP matters in these regions. These efforts have expanded to the opening of specialized IP tribunals in Wuhan, Nanjing, Suzhou, and Chengdu in early 2017.  By late 2017, an additional new IP court was established in Shenzhen, a technology and manufacturing hub in southern China. See Rapid changes in the Chinese Legal System.

Meanwhile, China is pursuing what they refer to as the Made in China 2025 initiative.

Made in China 2025 is a program of the Chinese government to comprehensively upgrade domestic industries to raise the domestic content of of core components and materials produced in China up to 70% by 2025. The Made in China 2025 program identifies 10 key industry sectors to support its domestic goals, including new advanced information technology, aviation, rail, new energy vehicles, agricultural machinery, new materials and biopharma.

These sectors have been at the center of complaints over the forced transfer of patented technologies to Chinese domestic firms as well as outright theft of trade secrets. The Chinese government has responded to concerns over the Made in China initiative with one senior economic official defending the program as open to both foreign and private companies.