The patent system is designed to exchange advanced technology disclosure for legal protection. However, when a patent application involves inventions related to national security or significant public interest, its disclosure may cause irreparable harm to national interests. Therefore, to protect national security and significant public interests, most countries have established security examination systems, requiring inventors to obtain approval before filing patents abroad for inventions completed domestically.
Multinational companies often have R&D facilities at their headquarters and overseas. When these R&D facilities collaborate on projects, deciding where to seek patent protection becomes a crucial decision, and the regulations and practices regarding security examinations in different countries play a key role in this decision-making process.
This article explores how to determine whether an invention is completed in China within the Chinese patent legal framework, and the necessity and methods of obtaining permission to file patents abroad, providing references for companies in patent compliance management and patent application strategy decisions.
In the Chinese patent legal framework, there is no term equivalent to the "foreign filing license" used in the US legal system. Instead, the corresponding concept is the security examination system. For inventions or utility models completed in China, a security examination by the China National Intellectual Property Administration (CNIPA) is required before filing a patent abroad. This system was introduced in the third amendment of the Patent Law in 2008. The security examination requirement applies to invention patents and utility model patents, but not to design patents.
The CNIPA will issue a security examination notice based on the applicant's request, specifying whether the patent application is approved for filing outside China.
The security examination is a mandatory procedural requirement. Regardless of whether the act is due to negligence or intentional, or even if the invention content does not require confidentiality, filing a patent abroad without undergoing the CNIPA's security examination will result in the invalidation of the corresponding Chinese patent. Once a patent application violates the security examination regulations, there are no remedial measures available.
In one of the top ten typical patent invalidation cases published by the CNIPA in 2022, a utility model patent titled "Scalable Transmission Assembly Device and Lifting Column" was declared entirely invalid (No. 55586) because the patent holder failed to fulfill the obligation of requesting a security examination before filing the patent abroad.
This utility model patent describes an anti-fall elevator, which enhances the safety and stability of the elevator through the arrangement of a bearing column, screw, load assembly, and drive assembly. The substantive content of this invention was completed in China. However, the patent holder completely ignored the requirement for a security examination and directly filed a provisional application in the US Using the US priority application, the patent was extended to China and quickly granted without substantive examination.
During the patent enforcement process, the accused infringer filed for patent invalidation and discovered that the patent holder had neglected patent compliance management, thereby violating mandatory procedural requirements. This oversight by the patent holder led to the complete invalidation of the Chinese patent, resulting in the loss of the legal basis for enforcement.
This case elaborates on the application standards of the security examination provisions in the Patent Law, underscoring the critical importance of procedural compliance. It serves as a reminder to innovators that adherence to mandatory legal requirements is essential when applying for patents to avoid the risk of invalidation. If a patent holder files a patent abroad without approval, thereby disclosing state secrets, they may face additional liabilities, including criminal responsibility.
If the substantive content of an invention is completed within China, the invention is considered to be completed in China. For inventions created through multinational team collaboration, determining whether the substantive content is completed in China can be assessed from the following dimensions:
3.1 Determining the Substantive Content of the Invention
The CNIPA's perspective from the aforementioned case is:
"For what constitutes the substantive content of a technical solution, it should be judged from the content of the invention and the technical solution in the application documents. On one hand, the substantive content should be reflected in the claims, especially the independent claims. On the other hand, the substantive content should generally be novel and not disclosed in prior art."
Therefore, the definition of the substantive content of an invention is not limited to the claims but also includes the content described in the specification. During the security examination, the CNIPA examines the technical solution completed in China, not the scope of protection requested by the applicant.
Additionally, determining the substantive content of the invention requires considering the level of prior art before the application date to ascertain the improvements made by the invention over the prior art. In other words, the substantive content of the invention should be novel and not disclosed in the prior art.
3.2 Determining Inventors' Contributions
According to Chinese patent regulations, an inventor is defined as any person who makes creative contributions to the substantive features of an invention. For inventions created by multiple inventors from different countries, determining the contributions of each inventor is crucial for assessing where the substantive content of the invention was completed.
Inventors' contributions can be evaluated based on whether each inventor contributed to the key features or auxiliary features that produce the technical function and effect. Additionally, for Chinese patents of third parties, the order of inventors can be used as a reference to determine inventors' contributions. Although there are no explicit regulations in China linking the order of inventors to their level of contribution, in practice, the first inventor and subsequent inventors often have significant differences in terms of title evaluation and salary treatment. Therefore, the order of inventors is generally distinguished based on the primary and secondary contributions and the significance of their roles.
3.3 Determining Multinational R&D Capabilities
Similar to the US, China determines the need for a security examination based on the location where the invention was completed, rather than the inventor’s nationality or residence.
In multinational collaborative inventions, the actual R&D capabilities at the inventors' locations are an important consideration. Specifically, R&D capabilities involve the local level of technology, the equipment and facilities used for the invention, and the R&D funding. In the aforementioned invalidation case, the lack of evidence showing that the patent holder had R&D capabilities outside China was one of the reasons for the patent's invalidation.
Furthermore, multinational companies may have situations where employees are seconded between subsidiaries in different countries and collaborate with local R&D to complete inventions. Therefore, detailed records of the location and process of innovation and R&D are crucial for determining the R&D location and inventors. These records can take the form of lab notebooks, project reports, communication logs, etc.
There are several ways to conduct a security examination before filing a patent abroad, depending on the company's different patent application strategies:
4.1 First Filing Outside China
If the applicant needs to file the first patent application outside China, they must separately request a security examination from the CNIPA in advance. When requesting a security examination, a Chinese document detailing the technical content of the invention must be submitted.
4.2 First Filing in China
If the patent application is first filed in China, the applicant can request a security examination from the CNIPA either when filing the Chinese patent application or within the Paris Convention period before filing the patent application abroad. This method is relatively simplified, as there is no need to separately prepare and submit documents describing the technical solution of the invention. Unlike in the US, submitting the application first in China does not automatically imply a simultaneous request for a security examination.
4.3 Submitting a PCT Application to CNIPA
Submitting a PCT application to the CNIPA is considered a simultaneous request for a security examination by default. Since a PCT application can be filed in English or Chinese, this approach may be more economical and convenient for multinational companies that do not intend to nationalize the PCT application in China.
The review period for security examination is also a factor to consider in patent application strategies. In practice, if a security examination request is submitted simultaneously with the Chinese patent application, the review result is typically received within about one week. For security examination requests submitted by other methods, the review result is usually received within about one month. In complex cases, the CNIPA may issue a notice to defer the application abroad within two months and make a decision on the security examination within four to six months.
Conclusion
Patent compliance management for multinational companies is more complex due to the varying regulations across different jurisdictions. Patent application strategies involve not only R&D investment, business planning, and innovation protection but also careful compliance review and arrangements to avoid the risk of patent invalidation.
For inventions completed in China, undergoing a security examination and obtaining a foreign filing license is mandatory. During the patent application process, documenting and retaining detailed records of the invention's development and having inventors sign declarations can help clarify each inventor's contribution and legally establish the company's ownership, addressing potential future disputes over inventorship and ownership. By understanding and adhering to these compliance requirements, companies can better protect their innovations and manage their patent assets.
