Third Party Observations – Early Prevention of Patent Infringement Risk

For an innovative enterprise, continuously launching new products is an important way to get a return on their prior investment in research and development. To continuously develop and market new products and get profits therefrom, and also to reduce research and development costs while avoiding patent infringement risk, an enterprise should pay close attention to its competitors, the leading players and the intellectual property development trend in the relevant industries or at least in the related technical field, and then take corresponding intellectual property protection measures if necessary.  

 
Third party observation is a precautionary measure which enterprises may take to reduce or avoid patent infringement risk. Any enterprise, if finding that a pending invention patent application may hinder their products from entering into market, may submit third party observations with the China Intellectual Property Administration (CNIPA) and point out the issues of the patent application which are not in conformity with the provisions of Chinese Patent Law during the prosecution of the patent application so as to prevent it from being granted and becoming an enforceable right.

Legal Basis:

Rule 48 of the Implementing Regulations of the Patent Law of the People's Republic of China: Any person may, from the date of publication of an application for a patent for invention till the date of announcing the grant of the patent right, submit to the patent administration department under the State Council his observations, with reasons therefor, on the application which is not in conformity with the provisions of the Patent Law.

Early opportunity for preventing infringement risk

During the prosecution of a patent application, i.e. before the patent application is granted, a third party may submit reasons for non-patentability of the patent application and corresponding evidence with the CNIPA.

After submitting a third party observation, the third party may follow up on the progress of the patent application to monitor any adjustment made by the applicant to the protection scope of the patent application as well as the applicant’s explanation about or amendments to the technical schemes made in the response to Office Actions. In this way, the third party may, to a certain extent, predict whether their products have a potential risk of infringement and how to reduce the risk, and also may obtain some guidance for adjusting their products or even the direction of future research and development.

Simple requirements on documents:

When submitting a third party observation, reasons and evidence regarding why the patent application is not in conformity with the provisions of Chinese Patent Law are needed. The evidence is not necessarily in Chinese language but a Chinese translation may help the examiner better understand the content. Notarization or legalization of the evidence is not required. Identity certificate of the third party is not required and anonymity can be created by using a straw man.

In contrast, there is a higher requirement on documents for the invalidation procedure if an enterprise is going to act against a granted patent. For example, the Certificate of Incorporation of the enterprise is needed; a Chinese translation is required if the evidence is in foreign language, and the evidence, if it is not patent documents, usually needs to be notarized, certified, or meets other legal requirements on formality.  

Cost saving:

Filing third party observations will not incur official fees. Other fees, such as those for translation, notarization, or certification, may be avoided as well.

Flexible opportunity for filing:

In practice, third party observations may be filed at any time after a patent application is published but before the notice of allowance is issued to the patent application.

After filing a third party observation, if the third party finds new evidence, they may file a new observation, with no limitation on the number of times of filing. However, it should be noted that if a third party observation is filed after the notice of allowance is issued, the third party observation is likely not to be considered at all.

Handling at the CNIPA:

The CNIPA will put third party observations into the file of patent applications for Examiners’ consideration in substantive examination. The CNIPA will not inform the third parties whether they have considered or what opinions they may hold on the third party observations. As seen from some of our cases, if the Examiner accepts a third party observation and the corresponding evidence, he/she will cite such evidence in the next or further Office Action.

Accordingly, a third party may, after filing a third party observation against a patent application, monitor the progress of the patent application on a monthly basis until the prosecution of the patent application ends.

Should you have any questions regarding the practice of third party observations as well as the strategy or manner thereof, please feel free to contact us and we will be glad to assist.