Into the Slammer - The Sale of 'Grey Goods' a Criminal Offense, Says UK Supreme Court

The sale of branded goods can be a complicated affair, especially when the line between counterfeits and 'authorized' goods can be blurry at times. This is highlighted in the sale of 'grey goods', which are items obtained from licenced manufacturers without the authorisation of the licensor. Having discussed the criminality of the sale of grey goods last year (more here), the decision of the Court of Appeal was appealed by the defendants, ultimately ending up on the desk of the Supreme Court, which handed down its judgment in early August.

The case of R v M, C and T concerned three defendants (including one company), who were engaged in the importation of branded goods into the UK that were manufactured outside the EU. These goods included notable brands such as Ralph Lauren, Adidas and Under Armour. Many of the goods were duly accepted as being counterfeits, but a significant portion of them were ones made by authorized manufacturers, but not authorized for sale to other parties. The defendants were taken to court for, among other offenses, the unauthorized use of trademarks (a criminal offense).

The focus of the case is section 92 of the Trade Marks Act 1994, which sets out that a person commits an offense under the Act if the proprietor "…sells or lets for hire, offers or exposes for sale or hire or distributes goods which bear, or the packaging of which bears [a registered trade mark]". There is a separate offense under section 92 for the possession and control of such goods, for which the defendants were prosecuted as well. The defendants' appeal argues that section 92 would only relate to the counterfeit goods and not the 'grey goods' as set out above.

The defendants argued that the phrase "such as sign" in the Act would only apply where the sign has been applied to the goods without the authorization of the rightsholder. As 'grey goods' have had the sign applied to them with the consent of the rightsholder, section 92 would not apply to those goods, but only to truly counterfeit goods.

Lord Justice Hughes, handing down the Court's unanimous decision, rejected this argument. In his view, the use of the phrase "such a sign" refers to "…a sign which is 'identical to, or likely to be mistaken for, a registered trade mark'", not just in instances where it has been applied without consent. This means that 'grey goods' would be caught by section 92 just as well as counterfeit goods would be.

Making fakes ain't easy

The judge also noted that all three offenses set out in section 92 are separate, not cumulative, and that both intent and the application of a sign without the authorization of the rightsholder apply to all three offenses. This is important, since the defendants argued that there is a link between the first and the second offense (subsections a and b), which, if the offenses are separate, could not be the case. Lord Justice Hughes emphasised that there is no ambiguity or obscurity in the law that would require a further investigation into Parliament's meaning of the section, particularly in relation to the defendants' argument on the different meanings of counterfeit and 'grey goods' (and subsequent differing treatment under section 92).

Lord Justice Hughes acknowledged that there has been a distinction between the two in the case of R v Johnstone; however, the distinction came about through the facts of the case, and does not reflect the general view of the Court on 'grey goods' and counterfeit goods.

The defendants further argued that due to the exhaustion of rights in the goods under EU law, and subsequently section 12 of the Act, any further objections to the sale of the goods would be limited to very narrow special cases, such as changes or impairments to the goods. The Court rejected this argument, as the exhaustion of rights only relates to civil law, not criminal, nor would it be useful in interpreting the construction of section 92.

A further argument put forward was that the more stringent test of a mental element used in the previous Trade Marks Act 1938 would exclude 'grey goods' from the current Act due to the previous Act only applying to only 'true counterfeits' (and therefore carrying over into the new Act in intention). The Court rejected this interpretation, as the previous Act would have included 'grey goods' due to its inclusion of goods irrespective of the authorized application of the mark onto the goods or not. Lord Justice Hughes also mentioned that, in his view, the sale of 'grey goods' and counterfeits would both be unlawful, as "…[b]oth may involve deception of the buying public".

Finally, the defendants argued that the construction of section 92 to include 'grey goods' would infringe on their human rights to enjoy and keep their possessions. The Court rejected the notion that the defendants have any rights in the trademarks affixed on the goods, even though they have the right to the goods excluding the marks. While they could sell those goods without the marks on them, the Act prevents them from misleading purchasers and infringing on the marks while doing so. The defendants are not deprived of the goods they own, but only regulated in the manner of the disposal of the goods. Lord Justice Hughes concluded that there was nothing disproportionate in the imposition of criminal sanctions under the Act, which legitimately balances "…the rights of the proprietor to protect his valuable trademark and goodwill, and those of the person who wishes to sell goods which he has bought".

Ultimately the Court rejected the appeal and allowed for the criminal trial to proceed.

The case will undoubtedly be hugely influential, especially for rightsholders who wish to prevent the sale of 'grey goods' in the UK market. This writer would agree with the interpretation of the Court, as the inclusion of 'grey goods' under section 92 makes sense, since one can draw an analogy between them and counterfeit goods due to the lack of authorization during their initial sale to the ultimate distributor. Should a proprietor wish to sell the goods without the marks they would be wholly entitled to do so, provided no other rights exist in the goods. The case seems to have finally settled the matter of 'grey goods' in the UK, at least for now.

Source: JDSupra

A Big Bite of the Apple - Supreme Court Decides the Fate of Design Patents

The two titans of technology, Apple and Samsung, have fought long and hard over many aspects of intellectual property law, especially ones relating to the design of the (now ancient, at least in smartphone terms) iPhone. The two companies have fought legal battles all over the world since 2011, with varying results for both parties. After a monstrous $1.05 billion award of damages to Apple in earlier cases by a jury, the matter ended up with the Supreme Court, who were destined to look at an aspect of design patents often overlooked by the judiciary, even if it was merely from a damages perspective. The Supreme Court handed down its judgment in early December.

The case of Samsung Electronics Co. v Apple Inc., dealt with design patents owned by Apple on aspects of the iPhone, in particular a black rectangular design (D618,677), the same with a bezel on a surrounding rim (D593,087), and a colourful grid of 16 icons on a black screen (D604,305). Samsung employed similar design aspects in its various smartphones (including the Galaxy S line), and Apple took them to court for infringement in the aforementioned design patents. What the Supreme Court were tasked to determine was the infringement, and subsequent award for damages for infringement, under section 289 of the US Patent Act.

The above section provides a remedy for damages when "[a] person who manufactures or sells “any article of manufacture to which [a patented] design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit". While this is more straightforward in instances of whole infringement of a simple, single article, it is more difficult, as admitted by Justice Sotomayor (handing down the Court's unanimous judgment), in cases with complex, multi-component items and subsequent profits using the infringing elements.

Complexity comes with a need for introspection

What remains key is the liability for the infringing articles where the designs have been applied, which has been traditionally set at "…the extent of his total profit, but not less than $250". This then means you have to initially identify the 'article of manufacture' to which the infringed design has been applied, and then calculate the infringer's total profit made on that article of manufacture.  The Court therefore had to decide "…whether, in the case of a multicomponent product, the relevant “article of manufacture” must always be the end product sold to the consumer or whether it can also be a component of that product". This would either enable the patent holder to claim all profits made by selling the Samsung smartphones (i.e. the whole phone), or restrict the damages that can be claimed (i.e. only allowing damages for the particular designs used, and not the whole phone) by the rightsholder.

The Supreme Court left quite a bit unanswered in relation to the question of when an article of manufacture would be the whole product, or simply a component thereof, which, at least to this writer's mind, is a huge part of this matter and many others involving complex technology. Arguably, as the decision will be sent to the Federal Court for a rethink, the lower rungs will have to fill this space; however, there is a chance that an agreement will not be reached (yet again) by the lower courts, and the Supreme Court will have to address this matter in the future.

Justice Sotomayor saw that, after a simple reading of the term 'article of manufacture' that it would encompass both an individual component of a product, or the product as a whole. Design patents can be acquired for both, and while a component has to be embodied in an article, the designs can themselves only cover those components.p

The Supreme Court ended up saying very little in their judgment, and the future of design patents, especially in the smart device space, will remain very unclear. Whether the Federal Court comes up with a good test for the above remains to be seen, but this writer for one thinks the Supreme Court should've added more meat to their decision. Although they did highlight some issues with the parties' briefs, one would have concieved that some more guidance was to be given. Either way, the decision is important, and sets the scene for Apple and Samsung to compete more for the future of their devices and their designs.

Source: IPKat

Genes Lost - Myriad Genetics Loses in the Australian High Court

The Myriad Genetics saga has been going on for several years now in the Land Down Under, and this writer has been waiting for the Australian High Court decision with bated breath. After a ruling in both the Federal Court and the Full Federal Court (more on which can be found here) in favor of Myriad Genetics, the cause seemed all but lost to the appellant, Yvonne D'Arcy. She was awarded the right to appeal to the High Court of Australia, who handed their judgment down only last month.

Although the case has been discussed on this blog before, some exposition is needed for those who might not be wholly familiar with the matter. The case of D'Arcy v Myriad Genetics dealt with the protein BRCA1; one that is quite relevant as a marker for a potential heightened risk for breast and ovarian cancer should it possess a mutation within it. Myriad Genetics acquired a patent for the sequence's isolation and subsequent analysis (Australian patent no. 686004), which was challenged by Yvonne D'Arcy, a cancer patient herself, in 2013.

What the High Court had to consider was whether the patent can be defined as a 'manner of manufacture' under the Statute of Monopolies 1623; a requirement for patentability under the Australian Patents Act 1990.

Genes are not that important

In a lengthy, multi-opinion decision, the High Court unanimously decided that the disputed claims of the patent were not a 'manner of manufacture', and thus were not patentable. Discussing the science and precedent, the majority still focused on the substance of the patent in in-depth detail. What Myriad Genetics argued, and the preceding judges agreed with, was that the isolation of the genetic sequence, and its analysis, created an artificial state of affairs, changing what is in simplistic terms a natural phenomenon into a man-made substance falling under the definition of a 'manner of manufacture'. The majority disagreed, and saw that "...the information stored in the sequence of nucleotides coding for the mutated or polymorphic BRCA1 polypeptide is the same information as that contained in the DNA of the person from which the nucleic acid was isolated. It is the existence of that information which is an essential element of the invention as claimed. The product is the medium in which that information resides". In the majority's view the isolation of the genetic content retains the very same information as occurs naturally within that person, adding or 'making' nothing new. Myriad Genetics' claims honed on the information within the genetic sequence, and not the chemical changes made to it when isolating, falling foul of a 'manner of manufacture' as a result, attempting to claim what already exists through nature (echoing, and accepting, the position by the US Supreme Court, more on which can be found here).

Ultimately what befell Myriad Genetics' case was the language used in the patent's claims, as stated by the majority: "Although it may be said in a formal sense that the invention as claimed, referring to isolated nucleic acids, embodies a product created by human action, that is not sufficient to support its characterisation as a manner of manufacture. The substance of the invention as claimed and the considerations flowing from its substance militate against that characterisation". As such the High Court allowed the appeal by Ms. D'Arcy.

The complexity and uncertainty around the case is evidenced by the length and multitude of opinions, and even though the decision was unanimous in allowing the appeal, the opinions reflect different approaches in arriving in the same answer. To this writer the focus seems to be very language specific, and had Myriad Genetics differentiated their claims through more specific, composition-heavy language, they could have been successful. Nevertheless, the case was more of a point of principle, as the patent expired only a few months ago, but it does set a precedent for the genetics industry in Australia. The Australian government has given guidance on proper practice in relation to genetic materials and patents, which looks gloomy for the industry, but the consultation does allow for comments and thoughts going forward.

Source: ABC Online 

Medical Treatments Patentable in Australia

Patents related to medicine or treatments carry quite the oomph when discussed in the public sphere. The recent examples of genetics patents, or even the potential to choose your future child's genetic traits, always spark a conversation about patents and whether certain areas of research should even be allowed to be patentable. In Australia medical treatment methods have been assumed to be patentable, but this has never been judicially tested. Finally, the High Court of Australia had to decide whether this was the case under law.

The case in question was Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd, which concerned the drug Leflunomide, which is used for the treatment of psoriatic and rheumatoid arthritis. A patent for leflunomide's composition and preparation were owned by Aventis, which had expired almost 10 years ago. A subsequent patent was also held by Sanofi-Aventis (after its merger in 2004), which utilized the drug in the treatment of the aforementioned conditions; or as is worded in the application: "A method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis, which comprises administering to a recipient an effective amount of a pharmaceutical composition containing as an active ingredient a compound of the formula I or II". After the expiration of the initial composition and preparation patent, Apotex proceeded to manufacture and sell its generic version of the drug, selling it as a treatment for both psoriatic and rheumatoid arthritis. Subsequently they were sued for patent infringement by Sanofi-Aventis for allegedly infringing their medical treatment patent. 

Some treatments are much more enjoyable than others

What the High Court had to answer was whether medical treatments would fall under the definition of a manner of manufacture in the Statute of Monopolies 1623 (a more in-depth discussion of what a 'manner of manufacture' is can be found here). This entails that the invention would have to be a vendible product, and has to provide economic utility through a possible new function or effect. The current position of the law, as was accepted by the courts, was cited in the case of Anaesthetic Supplies Pty Limited v Rescare Limited by Justice Lockhart: "If a process which does not produce a new substance but nevertheless results in 'a new and useful effect' so that the new result is 'an artificially created state of affairs' providing economic utility (emphasis added), it may be considered a 'manner of new manufacture' within s 6 of the Statute of Monopolies". The Patents Act 1990 does not expressly exclude methods of treatment, and the courts have struggled in distinguishing methods of treatment and the drugs which produce the same results, with Justices Black and Lehane discussing "the difficulty ... of drawing any logical distinction between a method of treatment and a patentable pharmaceutical product that produces the same beneficial results" in Bristol-Myers Squibb Co v F H Faulding & Co Ltd. A method of treatment can introduce a new function of effect which provides economic utility; however the question is not necessarily that easily answered.

The High Court, in its deliberation, came to the conclusion that methods of treatment could be patented under Australian law. Their emphasis was clearly in economic utility: "It could not be said that a product claim which includes a therapeutic use has an economic utility which a method or process claim for a therapeutic use does not have". Finally the Court summarized its position with relation to methods of treatment: "Assuming that all other requirements for patentability are met, a method (or process) for medical treatment of the human body which is capable of satisfying the NRDC Case test, namely that it is a contribution to a useful art having economic utility, can be a manner of manufacture and hence a patentable invention within the meaning of s 18(1)(a) of the 1990 Act". As the Court accepted that these methods can be patented, Apotex's claim for the revocation of Sanofi-Aventis' patent failed. However, the Court did not find that Apotex had infringed Sanofi-Aventis' patent, as they merely provided the generic version of the drug without the provision of the treatment itself.

As one can see the Australian High Court almost unanimously accepted the patentability of methods of treatment, bar the dissenting judgment of Justice Hayne. Patents relating to methods of treatment are important, and do not in themselves necessarily provide a barrier for innovation. Whether the Australian legislature will take the initiative and legislate on this matter in more express terms will remain to be seen.

Source: JDSupra

Retrospective - What is an Invention? An Early Australian Perspective

When considering the humongous advances through invention humanity has undergone in its existence in this world, starting from the primitive inventions such as the ability to control fire to more modern marvels such as the Internet, one cannot be nothing but at awe with the collective capabilities of humans. Inventions themselves can cover almost anything when thinking in laymen's terms, but what amounts to an invention under law? In Australia this is judged based on the NRDC case, which has been discussed on this blog prior; however a case nearly 50 years earlier set the stage for NRDC which is often overlooked.

The case in question is Rogers v Commissioner of Patents, decided in 1910 by the High Court of Australia. The invention being dealt with in the case was a device or a contraption designed to burn down standing timber, causing only a segment of the bottom to burn, thus felling the tree once burned sufficiently. The device used kept the burning piece of wood used to burn down the tree in constant contact with the tree through a tripod of sorts (two forked pieces of wood) which rested the burning piece of wood against the base of the tree at an angle. Due to this the smaller burning piece of wood would fall towards the base of the tree as it was heavier, keeping it in constant contact with it as desired. 

Much like the aforementioned NRDC case the question at hand for the High Court of Australia was whether this device would fall under the 'manner of manufacture' requirement in the Statute of Monopolies 1623. Chief Justice Griffith contemplated the phrase's meaning in the majority decision, seeing that the word 'manufacture' can apply both to the product itself or the manner in which it is produced. He further distinguished that mere new ideas themselves will not be sufficient to be patentable, drawing from the case of Harwood v Great Northern Railway Co: "...you cannot have a patent for a well-known mechanical contrivance merely when it is applied in a manner or to a purpose, which is not quite the same, but is analogous to the mariner or the purpose in or to which it has been hitherto notoriously used". His Honor clearly refers to the use of the two forked sticks in the device in question as to whether they would fall under such a definition. In further explaining his position, his Honor referred to the case of Lane Fox v Kensington and Knightsbridge Electric Lighting Co: "A patentee must do something more; he must make some addition, not only to knowledge, but to previously known inventions, and must so use his knowledge and ingenuity as to produce either a new and useful thing or result, or a new and useful method of producing an old thing or result".

Joseph was confused as to how to use the device

As said above, the use of a very primitive device, clearly already known, would be hard-pressed to fall under the definition of a manner of manufacture under his Honor's considerations. His Honor does go into more detail applying the aforementioned precedents in the patentability of new ideas: "There may... in some circumstances be a patentable invention if the discovery involves novelty in the use of a known thing as distinguished from novelty of purpose or if any new modification of the thing or any new appliance is necessary for using it for the new purpose". In his mind a tripod, as the two sticks served as, did not fall under this doctrine, as the device was not a modification of the conventional tripod nor was there a new appliance; the sticks merely served as a tripod even under the new use. His Honor dismissed the appeal on these grounds.

Justice Isaacs showed a different approach, giving a dissenting opinion. In his Honor's mind new uses for old apparatuses could attract patentability, quoting a number of cases, the more illustrative of which is the House of Lords decision of Patterson v Gas Light and Coke Co: "...if by reason of knowing the theory he [the appellant] is enabled to make some improvements he may take out a patent for those improvements, but he cannot take out a patent to prevent others using what they had used before, though only empirically". In his Honor's mind the use of the tripods in this manner would be patentable.

As one can see the old views of what can be considered an invention, or a manner of manufacture, showcase themselves to be incredibly archaic, although still very useful in further considerations. Rogers v Commissioner of Patents was used extensively in NRDC, and therefore merits discussion, but it's application in today's patent law can be said to be minimal at best. Regardless, this case is still overlooked, and does give more insight to the origins of modern patent laws and their application.

Retrospective - Manner of Manufacture in Australia

With the Myriad Genetics appeal here in Australia looming in the near future, I thought it'd be time to discuss an important aspect in the case, both at first instance and in the appeal; what can be classed as being a 'manner of manufacture'? To give more clarity as to where this stems from, a component for an invention to be patentable is that is has to be 'a manner of manufacture' under the Patents Act 1990. This requirement dates as far back as the Statute of Monopolies 1623 in England. What can be classed as such has not been restricted to a literal meaning of the phrase, but has encompassed a wide variety of things, not purely industrial inventions relating to the manufacture of goods. The leading case in Australia in what can be seen as a 'manner of manufacture' is National Research Development Corporation v Commissioner of Patents, often referred to simply as the NRDC case.

The bane of every budding farmer

NRDC concerned a patent relating to the killing of weed plants in agriculture. NRDC had developed a method of using previously known chemicals and applying them directly to the soil, killing weed plants but still retaining the crops. What was new in this invention was that the chemicals only killed the weeds if applied in this specific manner, when it was previously believed they would not have this effect. NRDC applied for a patent for their invention which was rejected by the Patent Office based on the fact that it was not a manner of manufacture under the (at the time in force) Patents Act 1952 as the chemicals used were already known and their application in that manner would not constitute a 'vendible product'. The matter was taken further to the Deputy Commissioner of Patents, who also rejected the patent based on the same facts. NRDC subsequently appealed and the case went all the way up to the High Court of Australia in 1959.

The High Court therefore had the final say in determining whether NRDC's invention was indeed a 'manner of manufacture' under the 1952 Act, which was previously rejected both during the initial application and on its appeal. Their Honors considered other matters in the case, such as novelty, however these are not relevant to determine what can constitute a manner of manufacture; although equally still important as requirements for patentability in their own right.

A manufacturer with great manners

In their decision Justices Dixon, Kitto and Windeyer boiled down the matter into one single question: "Is this a proper subject of the letters patent according to the principles which have been developed for the application of s 6 of the Statute of Monopolies?" This was, in their mind, a matter of weighing the old definition according to the evolution of patents and how they have been assessed relying on older precedents and formulating an approach that would encompass the considerations put forth prior. Their Honors considered the case of Re GEC's Application where Justice Morton formulated the definition for what could amount to a 'manner of manufacture': "a method or process is a manner of manufacture if it (a) results in the production of some vendible product or (b) improves or restores to its former condition a vendible product or (c) has the effect of preserving from deterioration some vendible product to which it is applied". The judges in NRDC criticized this approach as having a narrowing effect if given a literal interpretation. This however links a 'manner of manufacture' to the idea of a 'vendible product', which was the consideration taken into account in the Patent Office's decision regarding NRDC's patent. Putting forth a clarification on Justice Morton's 'rule', their Honors stated that "It is, we think, only by understanding the word "product" as covering every end produced, and treating the word "vendible" as pointing only to the requirement of utility in practical affairs, that the language of Morton J.'s "rule" may be accepted as wide enough to convey the broad idea which the long line of decisions on the subject has shown to be comprehended by the Statute." Their Honors therefore accepted Justice Morton's approach, but insisted that the term 'vendible product' be given a wide and generous interpretation so as to not limit it.

Setting out the test for what would amount to a 'manner of manufacture', their honors saw that the invention "...must be one that offers some advantage which is material... the process belongs to a useful art as distinct from a fine art... [and] that its value to the country is in the field of economic endeavour." Applying this to the case at hand their Honors saw that the method employed by the claimant fell squarely within the definition of a manner of manufacture. The method can be considered a 'product' as it consists of an artificial state of affairs which can be observed if looking at the growth of the crops and the weeds when used. The method also has a significant economic effect as it gives an advantage to its users, yielding more and better crops. Clearly it also is a useful art as opposed to a fine art. The judges accepted the appeal and saw that NRDC's application should be accepted as lodged.

As one can easily see, the test for what can amount to a 'manner of manufacture' is quite broad, and justifiably so. With new technologies evolving fast and new inventions taking on wholly new functions and applications, leaving the test narrow, much like in Justice Morton's test, would hinder the progress of industry and lower the desirability of patenting those inventions or methods. Even though the test was formulated over 60 years ago, it still plays an important part in modern litigation; most recently the genetic patent litigation (which was discussed on this blog previously here) involving Myriad Genetics. What the appeal will yield still remains to be seen, but whether the isolation of genes is a 'manner of manufacture' still plays an important part in that determination.

Chinese Intellectual Property Law (Part 3) - Patents

(Part 1 discussing Copyright can be found here and Part 2 discussing Trademarks can be found here)

The final third installment of my short introductory series into Chinese intellectual property law will discuss the final big area of intellectual property: patents. The current legislation in force in China dealing with patents in the Patent Law of the People's Republic of China (English translation can be found here, Chinese text here), having been enacted in 1984. The legislation has seen several amendments in the last few decades, with the last having been made in late 2008.

Much like the previous two subject matters discussed, copyright and trademarks, much of the content in the Chinese legislation is dictated by international treaties and conventions, making the legislation similar to those found in other signatory nations. Even though the content of the legislation would seem to afford protection much like in other nations, there are issues which still linger, which shall be discussed later in this piece.

As has been the case in the previous two instances dealing with other intellectual property topics, the Chinese law provides us with a great explanation of its goals:

"This Law is enacted for the purpose of protecting the lawful rights and interests of patentees, encouraging invention-creation, promoting the application of invention-creation, enhancing innovation capability, promoting the advancement of science and technology and the economic and social development".

Your friendly neighborhood patent troll

Patents are often thought of as purely a method of seeking out an easy pay-out due to patent trolls (entities or people who merely hold patents to sue if they're infringed, not to actually use and sell that particular invention) being an issue in the industry, but the Chinese legislation does endeavor to protect the interests of patent holders and to encourage new developments in technologies or science. Although high-minded and completely rational in its aims, much like with other countries, patent legislation can be abused in practice.

The Chinese legislation sets out patentable subject matter as "...inventions, utility models and designs". All three are defined even further in the provision. Often left as merely an 'invention' in other jurisdictions, such as Australia, all three should cover any and all patentable content accepted in other nations with similar legislation. The law however does not allow the patenting of inventions which violate the law, social ethics or harms public interest. What would constitute as violating 'social ethics' seems to be incredibly vague, but arguably could pertain to human experiments for example.

The law also sets out when a patent is the property of an employer. Should the invention be created "...in the course of performing the duties of an employee, or mainly by using the material and technical conditions of an employer" the employer has the right to apply for the patent, not the inventor. The latter part of the provisions grants the right even when just using the equipment provided by an employer and does not require an explicit agreement as to the transfer of the patent to the employer, which is a relationship defined in a much stricter sense in other jurisdictions. Is the ability to apply for the patent given automatically, what is the degree of use required? Clearly the provision could give the employer an upper-hand and could be abused to strip inventors of their patents. The provision does however expressly state that any contract giving the rights to the inventor shall prevail over the mere use of the technical conditions or equipment.

Basic requirements for an invention to be patentable are very much like ones found in Canada or Australia for example; an invention has to be novel, creative and of practical use. Although worded slightly differently, one can equate the terms in the Chinese provision with terms often used in the common law jurisdictions: novelty requiring the technology being something entirely new; creativity pertaining to a requirement of improvements to any possible prior art (i.e. inventive step); and practical use requiring a possible manner of manufacture or production, with positive results, in other words, is useful. Excluded subject matters are, again, much like in other jurisdictions, including plant and animal varieties, scientific discoveries and methods of diagnosis or treatment of diseases. The Chinese legislation saw some big changes in its third Amendment, one creating a 'absolute' requirement of novelty, which prohibits the patenting of something already published or disclosed either in China or internationally. This is a transition from the old 'relative' novelty in prior provisions, where the use or publication of something outside of China would not prevent its patenting in China.

Siri faced patent litigation in China

The standard term for an invention patent is 20 years and for a utility model or a design patent 10 years from the date of filing. The durations are similar to those used in Australia or the UK for example. In a patent application claims have to be submitted relating to the scope of protection sought for the patent, again being very similar to the requirements set in common law jurisdictions.

What plagues the Chinese patent system is not the process itself, it being much the same as in a plethora of countries, but in the enforcement of the patents and their protection. An extensive report on the matter written by the USPTO details much of the downfalls of the Chinese system, but still showing the improvements being made. The biggest issues noted of in the report relate to the rule of law (transparency, certainty, fairness, impartiality and consistency of judgments); efficacy of remedies and their enforcement; and short-comings in certain types of patents in China, such as pharmaceutical and utility model patents.

For the previous two installments, please refer to the links offered at the top of the article. As these articles are merely meant to be overviews of Chinese law, should any glaring omissions exist please do let me know in the comments of the given article (or this one) and any possible mistakes shall be corrected posthaste. Chinese legislation and its application contains more intricacies than I have even begun to discuss, so some aspects have been left untouched due to lack of knowledge on the writer's part.