Recently, the Chinese Patent Reexamination Board (PRB) published a written decision where patentee Chen He’s Electric Unicycle patent (CN102275621B) was invalidated based, partly, on a failure to establish sufficient domestic priority.

The case is significant because of:

a) its consideration of whether the patent can be invalidated due to not applying for a foreign filing license (FFL) and

b) its two-part test for establishing domestic priority.

Requirements for a foreign filing license

The requirements for a foreign filing license are set out in Article 20, paragraph 1 of the Chinese Patent Law. This Article 20 requires that for any technical subject matter pertaining to invention and utility model applications that are completed in China, the applicant must first submit a request for confidentiality review at the Chinese Patent Office (CNIPA). The applicant may only subsequently apply for a patent on the said technical subject matter in a non-Chinese country after having received a “foreign filing license” approval from CNIPA.  Article 20 further notes that a subsequent grant of a Chinese patent will be invalid if the patentee is found to have violated the confidentiality review requirement.

Here, both the petitioner (NaEnBo Beijing Technology Company Limited et al) and the patentee, Chen He, incorrectly relied on evidence of the nationality or residency of the applicant to show whether there was a foreign filing license violation. Chen He provided evidence that he was an American citizen at the time of filing and therefore argued that CNIPA approval prior to filing in the U.S. is not a requirement, whereas the petitioner argued that Chen He was a Chinese citizen at time of filing and so an FFL requirement should apply.

The PRB explicitly clarified and emphasized that evidence of where the inventive concept of the patent was completed (in this case- within China or the United States) determines whether the invention may be subject to a CNIPA confidentiality review before applying for a patent outside China- without regard to whether the patent applicant is a Chinese or foreign citizen or their specific residency.  Therefore, the PRB found that since the petitioner did not provide specific evidence showing the technical solution of the patent was completed within China, and therefore the petitioner failed to establish a prima facie case of violation by Chen He of not seeking a confidentiality review under Article 20.

Test for establishing domestic priority

The PRB then proceeded to evaluate whether appropriate domestic priority was established.  Here, the regular filing date of the Chinese patent (CN102275621B, hereafter the ‘621 patent) is April 1, 2011 with a claim of priority to a domestic parent application (CN201010272536- hereafter the ‘536 application) with filing date of September 6, 2010.  Nonetheless, the claimant also uncovered a publication with publication date of March 5, 2011- which claimant argued to be the same technical subject matter as the ‘621 patent.  Additionally, the claimant provided patentee’s own U.S. provisional applications (which were filed on March 9, 2010 and March 18, 2010 respectively- which is more than a year before the regular filing date and before the U.S. filing date- i.e. March, 9, 2011) as evidence that the ‘536 application cannot be the priority document.  Therefore, both applicants’ own U.S. provisional filings as well as the cited prior publication may be considered relevant prior art if the domestic priority date based on the parent application (with filing date September 6, 2010) cannot be established.

Given the above- the patentee argued that priority for the ‘621 patent should be based on the Chinese/domestic priority document (i.e. the ‘536 filing) in order to overcome the publication date of the cited reference (March 5, 2011) and the earlier filing dates of applicant’s own U.S. provisional applications.  In order to determine if the ‘621 patent can enjoy priority to the ‘536 filing date, the PRB cites to Article 29, paragraph 2 of the Chinese Patent Law and applies a two-part “subject matter” test.

Under Article 29, paragraph 2 of the Chinese Patent Law, “domestic priority” is established when the subject matter relied upon in the Chinese application is, for the first time anywhere in the world, disclosed in the domestic/Chinese priority document.  The PRB further sets forth a two- part test for establishing “same subject matter” between the patented application and the alleged priority document or U.S. provisional applications.

This two-part test is as follows:

Step 1: compare if the subject matter of the patented claims are disclosed in the domestic priority document- if no, domestic priority is not established; If yes, go to step 2: compare if the subject matter of the patented claims are disclosed in the US provisional applications- if no, then domestic priority is established and if yes domestic priority is not established.

Here, the PRB reviewed the subject matter of independent claim 1 of the ‘621 patent and found that the technical features pertaining to the control method for riding the electric unicycle are not found in the Chinese priority application while found to be functionally equivalent in the U.S. provisional application- despite slight differences in disclosure to explain the equivalence.  Therefore, the PRB found that domestic priority was not established.  By verifying each of the features of claims 2-9 of the ‘621 patent in a similar manner, the PRB determined that only claims 2 and 9 of the ‘621 patent can enjoy priority to the ‘536 application while the remaining claims were not disclosed by the domestic priority document and therefore cannot enjoy the September 6, 2010 priority date.

Significance of the case

On April 26, 2019 (which coincidentally is also “International Intellectual Property Day”) the above PRB decision was selected by the Chinese Patent Office as one of the Top 10 Chinese Patent Re-examination cases of 2018.

First, the above decision is significant for making explicit that invalidation on the basis of lack of foreign filing license needs at least prima facie evidence that the inventive concept of was completed outside China.  Mere evidence of citizenship of the inventor and/or location of where the inventor resided is by itself insufficient to establish invention completion.  Moreover, the decision clarifies the meaning of “domestic priority” under the Chinese Patent Law and provides a framework for evaluating a claim of priority via evaluation of same subject matter.

Furthermore, by finding for same subject matter for claim 1 of the Chinese filing and the prior US provisional despite some variations in language- the decision clarifies that a finding of same subject matter does not require identical terminology and descriptions between the two documents, but instead that the documents should be the same or equivalent in “overall technical solution, technical problem solved, and technical effects achieved.”

We expect this decision to be an important reference for evaluating foreign filing license and claim of priority issues in China.

[View source.]