This March, the Beijing Intellectual Property Court (the court) held that the deadline for claiming domestic priority is when an applicant completes registration formalities (i.e., pays required fees) and not later, when SIPO actually grants a resulting patent. In an administrative trial ((2015) JingZhiXingChuZi No.:2822), Richtek Electronics Co., Ltd. (Richtek) sued the State Intellectual Property Office (SIPO) based on a Notification that a claim to priority in a later-filed application was deemed not to have been made since the later-filed application was filed after payment of fees but before grant of the parent application.

Basic facts of the case:

June 13, 2014, Richtek filed a utility model (UM) patent application titled “a portable multi-function air pump” (referred to as an earlier application) with SIPO;

September 17, 2014, SIPO issued a Notification to Grant Patent Right for the UM and a Notification to Go through Formalities of Registration notifying Richtek that the UM patent application can be granted after going through the formalities of registration;

October 17, 2014, Richtek paid the UM patent registration printing fee, the first-year annual fee and stamp tax to SIPO to go through the formalities of registration;

October 30, 2014, Richtek filed an invention patent application and an UM patent application both titled “a portable multi-function air pump (collectively referred to as a later application), and claimed the earlier application as a basis of the priority of the later application;

November 19, 2014, SIPO issued the earlier UM patent application;

December 16, 2014, SIPO issued Notices that the claim to priority was deemed not to have been made for the later applications stating that “the earlier application has been granted a patent right and thus does not comply with Article 32.2 of Rules for the Implementation of the Patent Law of the People’s Republic of China (the Rule) to reject this priority claim.

Richtek applied for administrative reconsideration to SIPO. SIPO maintained the Notice. Then, Richtek sued SIPO at the Beijing Intellectual Property Court.

 

Focus of the case:

Richtek submitted that the earlier application has not been granted a patent right since SIPO had not issued the Announcement of Grant of Patent for the earlier UM patent application yet when Richtek filed the applications claiming domestic priority;

SIPO asserted that Richtek has completed the formalities of registration and paid corresponding registration fees for the earlier application before Richtek filed the priority claim the later applications. That is, the earlier application would surely be granted a patent right^[1] and thus cannot be taken as the basis for claiming domestic priority;

Therefore, the focus of the case was how to interpret “the earlier application has been granted a patent right.” Does granted a patent right mean paying the fees necessary for grant or does it mean the actual grant after payment of the necessary fees?

 

Decision of the court:

The court held that “the earlier application has been granted a patent right,” means the applicant has completed the formalities of registration (paid the necessary fees) for the earlier application.

The Court reasoned:

First, if the applicant files a later application claiming domestic priority after the applicant completed the formalities of registration of the earlier application and before SIPO issued the earlier application, it may lead a double patenting issue[2]. Specifically, according to Article 54 of Rules for the Implementation of the Patent Law, SIPO shall issue the patent right after the applicant completes the formalities of registration. If the deadline for claiming domestic priority is the date of SIPO issuing the earlier patent, the applicant possesses the right of the earlier patent already and may claim the priority for the later application successfully, and the later application may claim same protection range as the earlier application, which may lead a double patenting issue. Thus, the deadline for claiming domestic priority should before the applicant completes the formalities of registration (paid the necessary fees) for the earlier application.  Second, in practice, the applicant may file the later application and claim the priority by mail before SIPO issued the earlier patent. While, when SIPO received this mail, the earlier application may have been issued by SIPO already. The acceptance of the priority claim of the later application under such circumstances may lead the provisions of Article 32.3 of Rules for the Implementation of the Patent Law of the People’s Republic of China[3] becomes meaningless since there are no corresponding regulations to authorize SIPO to invalidate the earlier application based on the applicant claiming the earlier application as the basis of priority of the later application, or no corresponding regulations to state claiming domestic priority for the later application can be deemed a waiver of the patent right of the earlier application. Thus, the deadline for claiming domestic priority should before the applicant completes the formalities of registration (paid the necessary fees) for the earlier application.

Third, if the applicant has taken the initiative to complete the formalities of registration, it shall be deemed that the applicant made a choice to authorize the SIPO to announce of grant of the earlier patent application, and thus the applicant shall bear the corresponding legal consequences for his/her actions[4].

Recommendations:

First, note that the deadline for claiming domestic priority is the completion time of formalities of registration of the earlier application (paid the registration fees for the earlier application). That is, if the later application with a domestic priority claim is filed with SIPO before the applicant paid the fees for the earlier application, the request of claiming domestic priority for the later application will be accepted; while, if the later application with claiming domestic priority filed with  SIPO after the applicant completed the formalities of registration of the earlier application, SIPO will issue a Notification that the claim to priority was deemed not to have been made as SIPO did in this case.

Second, note that for claiming domestic priority in China, the earlier application shall be a patent application for invention or for utility model, and it shall not be a divisional application, nor a patent application for design.

Finally, note that if the request of claiming domestic priority for the later application is accepted by SIPO, the earlier application shall be deemed to have been withdrawn from the date on which the later application is filed, and the earlier application that is deemed to have been withdrawn in such circumstance shall not be restored by request[5]. Even if the applicant withdraws his/her claim to the right of domestic priority after claiming the priority, the earlier application that is deemed to have been withdrawn still cannot be restored by request[6].

Further, while the Court did not address this specifically, if the applicant wishes to file a divisional based on the earlier application claiming the earlier application as the basis of the priority of the later application, he/she should file the divisional while the earlier application is still pending[7]. Note that despite the guidelines allowing divisionals to be filed within 2 months (e.g., potentially after payment of grant fees), based on this case, we recommend filing divisionals before payment of the grant fees in case the Court rules similarly in a future case regarding divisional priority.

[1]          Article 54.1 of Rules for the Implementation of the Patent Law of the People’s Republic of China

After the patent administration department under the State Council issues the notification to grant the patent right, the applicant shall go through the formalities of registration within two months from the date of receipt of the notification. If the applicant completes the formalities of registration within the said time limit, the patent administration department under the State Council shall grant the patent right, issue the patent certificate and make an announcement.

[2]          Article 9 of Patent Law

Only one patent right can be granted for the same invention. However, where the same applicant applies for a utility model patent and an invention patent with regard to the same invention on the same day, if the utility model patent acquired earlier is not terminated and the applicant declares to relinquish such utility model patent, the invention patent may be granted.

If two or more applicants apply for a patent for the same invention separately, the patent right shall be granted to the applicant who files first.

[3]         Article 32.3 of Rules for the Implementation of the Patent Law of the People’s Republic of China

Where the domestic priority is claimed, the earlier application shall be deemed to be withdrawn from the date on which the later application is filed.

[4]         Article 54 of Rules for the Implementation of the Patent Law of the People’s Republic of China

After the patent administration department under the State Council issues the notification to grant the patent right, the applicant shall go through the formalities of registration within two months from the date of receipt of the notification. If the applicant completes the formalities of registration within the said time limit, the patent administration department under the State Council shall grant the patent right, issue the patent certificate and make an announcement.

If the applicant does not go through the formalities of registration within the time limit, he or it shall be deemed to have abandoned its or his right to obtain the patent right.

 

[5]         6.2.2.5, Chapter 1, Part 1 of GUIDELINES FOR PATENT EXAMINATION

Where the right of domestic priority is claimed, the previous application shall be deemed to have been withdrawn from the date on which the subsequent application is filed.

Where any claim to the right of domestic priority made by the applicant is, after the preliminary examination, found to be in conformity with the provisions, the examiner shall issue the Notification that Application Deemed to be Withdrawn to the previous application. Where two or more domestic priorities are claimed, if the claims are, after the preliminary examination, found to be in conformity with the provisions, the examiner shall issue the Notification that Application Deemed to be Withdrawn to the relevant previous applications.

Any application that is deemed to have been withdrawn in such circumstance shall not be restored by request.

[6]         6.2.3, Chapter 1, Part 1 of GUIDELINES FOR PATENT EXAMINATION

Where any applicant claims the right of domestic priority, after the withdrawal of the priority, the previous application, which has been deemed to be withdrawn under Rule 32. 3, shall not be requested to be restored due to the withdrawal of the priority claim.

[7]        5.1.1, Chapter 1, Part 1 of GUIDELINES FOR PATENT EXAMINATION

(3)  Submission time of divisional application

The applicant shall file a divisional application no later than the expiration of two months (i.e., the time limit for going through the formalities of registration) from the date of receiving the Notification to Grant Patent Right to the initial application issued by the Patent Office. After the expiration of the above time limit, or where the initial application has been rejected, or the initial application has been withdrawn, or is deemed to have been withdrawn and the right has not been restored, no divisional application shall be filed in general.