According to Article 2.3 of the Chinese Patent Law, “utility model” means any new technical solution relating to the shape, the structure, or their combination, of a product, which is suitable for practical use. It can be seen that, all the processes (methods, uses) are not the subject matter, they cannot be protected by utility model; on the other hand, according to GUIDELINES FOR PATENT EXAMINATION, a product with non-fixed shape, e.g. materials in powder state, liquid state, etc. is not the subject matter either.
Although the legal system is intended to protect relatively small advances over existing technology, utility model patents can actually be an important weapon in a company’s arsenal since they are quick and easy to obtain but carry the same remedies as invention patents, including substantial fines and injunctions. There are many cases where applicants have captured huge markets through utility models, such as the selfie stick CN201420522729.0, and the keyboard CN201520064963.8. The selfie stick utility model patent won the China Patent Gold Award due to the significant influence generated by the large number of litigation cases involved. It is said the patent holder had initiated about 8,000 lawsuits based on this patent, this utility model’s commercial value is more than 100 million RMB; on the other hand, accordingly, this utility model patent had also faced about 30 invalidation challenges, yet ultimately, only Claim 1 was invalidated. The patent holder selected utility model for this selfie stick does not mean that the inventive step of the application is not high enough, as this utility model’s patent family members in US, EP, JP, and KR all were all granted as invention (Utility) patent, and the reason is that this product, like many other electrical products, has fast iteration cycle, accordingly the patent holder wanted this patent granted fast, and also wanted to get a broader protection scope; if the patent holder selected invention to protect selfie stick, its commercial value would drop significantly: first the invention could not get such broad protection scope, second, it might be rejected in the substantial examination or be invalided easily (yes the utility model is more difficult to invalidate compared with invention if they have the same claims). Regarding the keyboard ‘9638, there is no data about how much money the holder had made on this patent, but it can be seen that this patent faced about 18 invalidation challenges, claims 1-7 had been invalidated gradually, and even as this utility model patent nears expiration, invalidation challenges were still being filed against the remaining claims 8-10.“Many foreign businesses are not familiar with the utility model patent system or are suspicious of the real value of a utility model patent registration. Whilst it is understandable that there are concerns about abuse of the system by domestic applicants and the enforceability of utility model patents, there is no doubt that if used properly, utility model patents can be an effective and valuable part of a company’s patent portfolio.
The Chinese utility model has the following advantages:
1. THE SPEED AND SIMPLICITY OF REGISTRATION
There is only novelty search by machine for utility model (no such search before 2019), and in China the registration of a utility model patent can proceed to grant within 6-8 months (for domestic applicants the timeframe may be longer). This quick file-to-grant cycle makes the regime ideal for products that will be entering the market quickly. Rapid registration means the possibility of prompt enforcement against infringement which is critical if a product launch is imminent, or in industries with constantly evolving product lines, or products that may be easily copied/reverse-engineered.
2. LOWER REQUIREMENT FOR INVENTIVE STEP AND MORE DIFFICULTY IN INVALIDATION
Although the novelty requirement is the same, the standard of inventive step required for a utility model is lower than that for an invention patent. For a utility model, the invention must possess “substantive feature and indicates an advancement”, which is in contrast to an invention patent which requires “prominent substantive feature and indicates remarkable advancements”. Accordingly, the lower inventiveness requirement means that the utility model patent can actually be more difficult to invalidate than an invention patent with the same claims.
3. CHEAPER THAN INVENTION PATENT APPLICATIONS
Application fees and maintenance costs are all lower compared with invention patent.
4. DUAL-FILING SYSTEM
It is possible to file an invention patent application and a utility model patent application simultaneously for the same subject matter. The utility model patent will normally be granted quickly. If the invention patent is subsequently granted for the same subject matter, the applicant will then have to abandon the utility model patent for obtaining grant of the invention patent. The patent owner can enjoy the benefits of the fast issuance of the utility model patent, as well as the advantage of protection of the invention patent in a longer term.
5. OPTION OF PCT NATIONAL PHASE
A Chinese utility model can be filed as a PCT national phase application, while the applicant can only select one type (invention or utility model) to protect in China.
6. Divisional application is available
Utility model can also have divisional application, which is the same as invention in China.
