Zunxia Li, Partner of IP March

The Supreme People’s Court of China (SPC) recently published a previously decided administrative patent case addressing whether a granted Chinese patent should be invalidated for failure to comply with the confidentiality examination requirement applicable to inventions completed in China. The decision provides useful guidance for multinational companies and cross-border R&D teams on how Chinese courts identify the substantive content of a technical solution and determine where that content was completed.

Case Background

A U.S. company owned Chinese invention patent No. 201310322059.8, entitled “An In Vitro Medical Diagnostic Device and System” (“the Patent”). The company first filed a patent application in the United States on December 6, 2012 and subsequently filed in China, where the Patent was granted.

A Guangzhou-based company petitioned the China National Intellectual Property Administration (CNIPA) to invalidate the Patent. It alleged that the claimed technology had resulted from a scientific research project conducted in Guangdong Province and that, because the invention had been “completed in China”, the U.S. company was required to obtain a confidentiality examination before filing abroad. The petitioner argued that the company’s failure to comply with Article 20(1) of the 2008 Patent Law—now Article 19 of the current Patent Law—meant that the corresponding Chinese patent should not have been granted.

CNIPA rejected the invalidation request in Decision No. 41277 and maintained the Patent as valid. The petitioner then commenced an administrative action before the Beijing Intellectual Property Court, which dismissed the claim. On appeal, the Intellectual Property Tribunal of the SPC held that the evidence was insufficient to establish that the substantive content of the technical solution had been completed in China. It therefore dismissed the appeal and affirmed the first-instance judgment.

The SPC’s Key Holdings

The SPC explained that the confidentiality examination requirement is intended to prevent inventions involving national security or other major national interests from being disclosed through foreign patent filings in a manner that could prejudice China’s national interests. Accordingly, the legal test is whether the substantive content of the relevant technical solution was completed in China.

1. Identifying the Substantive Content of the Technical Solution

l  Relevant examination document: When determining whether a granted Chinese patent should be invalidated for non-compliance with the confidentiality examination requirement, the primary document for review is the foreign patent application filed before the Chinese application. As a general rule, the substantive content of the technical solution should be identified from that foreign filing. The Chinese application may be used as the basis of review only where the technical solutions disclosed in the Chinese and foreign applications can be confirmed to be substantively identical.

l  Scope of the technical solution: Because the confidentiality examination regime is designed to prevent premature disclosure of inventions that may implicate national security or major national interests, the relevant technical solution is not limited to the claims. The entire disclosure of the patent application must be considered.

l  Meaning of “substantive content”: The substantive content refers to the improvements over the prior art that enable the invention to solve a particular technical problem and achieve the corresponding technical effect. The relevant prior art may be the background technology described in the patent specification or the technology identified by the patent owner or inventors as the starting point of the invention. Where the inventors’ identified starting point is closer to the claimed solution than the specification’s general description of the background art, the inventors’ account of the inventive contribution may serve as the principal basis for determining the substantive content.

Specifically in the case, the background section of the Patent described the prior art only in general terms. During the first-instance proceedings, the first-named inventor testified and identified three inventive points distinguishing the Patent from the prior art. Because the prior art used as the reference point in that testimony was closer to the claimed technical solution than the general background description in the specification, the SPC accepted the inventor’s statement as the principal basis for identifying the substantive content of the technical solution.

l  Dependent-claim features: An additional technical feature appearing in a dependent claim is not automatically part of the substantive content merely because it is recited in a claim. The key question remains the extent to which that feature contributes over the prior art.

2. Determining Whether the Substantive Content Was Completed in China

The SPC held that the place where the substantive content was completed must be determined by considering the formation of the technical solution, the inventors’ locations when that substantive content was completed, and the ordinary R&D and commercialization patterns of the relevant industry.

l  Formation of the technical solution: Email communications among the inventors showed that the three principal inventive points and the related technical concepts had already been formed by the end of June 2010.

l  Inventors’ locations: The inventors’ passport records, considered together with the development timeline, supported the conclusion that the substantive content of the technical solution had not been completed in China.

l  Industry-specific R&D and commercialization patterns: Medical-device inventions typically require a lengthy process from identifying needs and developing core concepts through testing, clinical studies and commercialization. The background and progress records of the Guangdong research project were more consistent with the commercialization of an already-developed solution than with the creation of the invention’s substantive content. The SPC therefore concluded that the substantive content had already been completed before the Guangdong project began, rather than during the project’s implementation in China.

Practical Implications for Cross-Border R&D

The SPC decision provides practical guidance on the documents, evidence and analytical framework relevant to China’s confidentiality examination requirement. In particular, it confirms that the mere performance of testing, verification, improvement or commercialization activities in China does not necessarily mean that the substantive content of an invention was completed in China, where the key inventive concepts had already been developed abroad.

l  Document the invention timeline: Maintain contemporaneous records showing when and where the core inventive concepts were conceived, developed and reduced to a sufficiently complete technical solution.

l  Preserve cross-border communications: Emails, meeting notes, invention disclosures, version histories and inventor travel records may be critical in demonstrating the development sequence and the inventors’ locations.

l  Distinguish invention creation from later-stage work: Project records should clearly separate the formation of the inventive concept from subsequent testing, validation, adaptation, engineering refinement and commercialization.

l  Assess confidentiality examination requirements before foreign filing: Where any substantive inventive contribution may have been completed in China, the filing strategy should be reviewed before a foreign patent application is submitted.

l  Use sector-specific evidence: The normal R&D and commercialization cycle of the relevant industry may help establish whether activities undertaken in China were part of invention creation or merely later-stage implementation.

Conclusion

Although the judgment itself was issued earlier, the SPC’s decision to publish it as a reference case underscores its continuing relevance. For multinational companies and cross-border R&D teams, the case highlights the importance of creating and preserving a clear evidentiary record of when, where and by whom the substantive inventive contribution was made. Such records may be decisive in determining whether China’s confidentiality examination requirement was triggered and in defending the validity of a subsequently granted Chinese patent.