China Patent and Licensing Discussions – Week of June 14th

On Wednesday, June 17th at 4:30 PM PST,  former Chief Judge Paul Michel (ret.) will be moderating a star-studded panel hosted by Berkeley Law on one aspect of one of the great ironies of this current moment in US-China IP relations: the weakening of the US IP system with respect to patent eligibility and China’s concurrent strengthening in those areas.  Judge Michel will be joined by former PTO Director David Kappos, Berkeley Law Professor Robert Merges, Beijing East IP Partner Liaoteng Wang, and Tsinghua Professor Guobin Cui.  Liaoteng Wang has recently written an article in anticipation of this event.  Information and registration information is available here and here.

The United States-China Intellectual Property Exchange and Development Foundation, of which I am a board member, will be hosting two webinars on pharmaceutical-related IP.  The first session focuses on the Phase 1 Trade Agreement including post-filing supplementation of data and patent term extension (June 16, 7 AM PST).    The second session focuses on patent linkage (June 17, 7 AM PST).   Former Chief Judge Randall Rader and several notable practitioners will be joining the discussions.

On June 16th at 9 AM  PST, I will also be speaking along with Jim Harlan of InterDigital on the US Department of Commerce’s Bureau of Industry and Security’s (BIS) ban on Huawei and its effect on global Standards Developing Organizations (SDOs). This program is sponsored by the American Intellectual Property Law Association’s Standards and Open Source Committee.  Non-AIPLA members may join this open event without charge.  Call: +1 (347) 991-7204, passcode 251151532, or join the Skype Meeting.

Sedona Conference January 17: Patent Protection and International Competitiveness

On January 17, 2019 in Washington, DC, many of the country’s leading patent experts, including USPTO Director Andrei Iancu, will gather to discuss how the U.S. patent system can be optimized for the benefit of all stakeholders.  The focus this year is on  “Promoting Invention, Entrepreneurship, Economic Growth, and Job Creation” .  The initial sessions focus on statutory subject matter, PTAB and remedies.  I will be participating in the last session focusing on how developments in Europe and China differ from the United States and could impact the innovation ecosystems of each region.   Former Chief Judge Paul Michel and former USPTO Director David Kappos will be co-moderating this session, which will also include former WIPO Deputy Director General for Innovation and Technology, Jim Pooley, Galit Gonen from Teva and Ami Patel Shah from Fortress Investment Group.

I have followed some of these issues in this blog, including the SIPO examination guideline revisions on software and life science patents, the role of industrial policy in patent grants in China, and the availability of injunctive relief (including in SEP cases, as well as preliminary injunctions).   The problems in differing approaches to patentability was also highlighted by me in written testimony before the United States-China Economic and Security Review Commission earlier this year (see p. 145).

Sedona conferences are highly interactive, policy-oriented expert discussions.  These are typically not one-off events, as they can often involve follow-up in the form of position papers or other efforts.

I hope that some of the readers from this blog can attend and contribute their insights, especially to my session. If you are interested, please register now.  More information about the Conference can be found on The Sedona Conference website.

Update on Research on Technology Protectionism and the Chinese Patent System

Prof. Gaétan de Rassenfosse and Dr. Emilio Raiteri (both at EPFL, the Swiss Federal Institute of Technology in Lausanne, Switzerland) have recently offered interesting statistical evidence for preferential treatment of domestic applicants and a potential issue with national treatment in patent applications in China. Their work shows that inventions by foreign firms were less likely to be granted patent protection, after adjusting for a range of other factors. However, their study of more than half a million patent applications reveals that only applications in “strategic” technology areas faced negative discrimination. More precisely, the probability that strategic patent applications by foreign firms will be granted is 5 to 15 percentage points lower than expected in the absence of discrimination.

Strategic technologies were identified using the ‘‘National Medium and Long-Term Program for Science and Technology Development 2006–2020’’ (“MLP”). The MLP, issued by the State Council, seeks to make China an innovation-driven nation by fostering indigenous innovation in selected technologies, including telecommunications, biotechnology, and energy. Regarding telecommunications, the authors (with the co-authorship of Rudi Bekker of the Netherlands) find in another article that discrimination against foreigners was particularly strong among standard-essential patents, an issue that was recently discussed by Professor de Rassenfosse in a recent webinar.

For background, one useful comparison of the MLP with other macro innovation/industrial policies has been prepared by Prof. Scott Kennedy.

There have been many complaints related to unfair treatment of foreign rights holders in the judicial system, and there has been some recent scholarship and support in analyses of newly launched databases, which suggests that China made significant progress in the area. Some of the sociological studies suggest that larger companies in China (as elsewhere), however, generally fare better in court.

The current paper focuses on the consideration of disparate treatment and its causes in the patent system. However, the reason(s) for the effect is unclear and the authors are cautious not to infer that discrimination is intentional. They have ruled out a large number of possible explanations (such as differences in patent quality or in the quality of the translation into Chinese), but they suggest more work is needed to fully understand the source of anti-foreign outcomes for applicants.

The authors are not alone in looking at differential treatment by national patent offices.  Using data on about 50,000 patent applications granted by the USPTO and filed in the years 1990–1995 at the EPO and the JPO, Prof. Elizabeth Webster and colleagues (then at the University of Melbourne, Australia) had found that domestic applicants were more likely than foreign applicants to be granted patent protection, after certain normalizing adjustments. The authors in another paper noted that despite the efforts then subsisting of the trilateral offices (and other supporting efforts under the umbrella of patent harmonization), there is significant disharmony in the patent application outcomes across the trilateral patent offices. For instance, the overall rejection rate for patent applications that have been granted by the USPTO was 25 percent for the JPO and 5 percent for the EPO.  Webster and her co-authors note that there are numerous reasons why patent application outcomes may vary with priority country status.  In light of recent changes in US practice due to Supreme Court decisions, one may also wonder whether differences in examination in certain areas, such as software-enabled inventions and biotechnology can also skew results in favor of local companies who have more up to the date information, are focused on the domestic market and may even have attracted capital upon the expectation of a local patent grant.

The papers on Chinese patent applications however are notable in that they (a) utilized a larger cohort of patent applications, (b) made comparisons in treatment by one office (SIPO) and (c) analyzed such treatment in light of articulated national industrial policies, and in comparison to treatment where no such national industrial policy is implicated.   The papers may suggest that political pressure, when it exists in China, may be more likely where there are clear national interests at stake rather in any matter in which a foreigner is involved.  Indeed, litigation data suggests that foreigners do well in Chinese courts; there is limited research on litigation outcomes when the subject is a matter of an articulated national industrial policy, such as these studies might suggest.

Written by Gaetan de Rasenfosse, edited by Mark Cohen.

The views expressed herein are the author’s own.