Trademark filings in bad faith are a big problem in China over the past decades. There have been quite some improvements in the Chinese legal landscape with this, even though more still needs to change to get rid of the problem.
On the patent-side, bad faith patent applications have not had the proper attention they deserve. Many companies that conduct business internationally, are confronted by Chinese patents that have been applied under dubious circumstances to say the least. It is therefore a positive sign that CNIPA is putting more effort in battling these bad faith patent applications. After all a crackdown by CNIPA on abnormal patent applications can contribute to the high-quality development of intellectual property undertakings as understood under 14th Five-Year Plan for the Protection and Use of National Intellectual Property Rights.
In order to get rid of abnormal patent applications, CNIPA is recently focusing on fabricated and plagiarized patent applications and has imposed administrative penalties on a number of agencies that acted for abnormal patent applications in violation of regulations and included them on a blacklist of serious violations and untrustworthiness. In this article we will look at four typical cases of abnormal patent applications, as published by CNIPA.
1. Patent agency submits plagiarized or fabricated patent application
Case 1: An IP agency filed a patent application that copied prior art where the content of the application was obviously the same. The patent applications the IP agency represents involved different fields of technology, but the contents of the description and claims were exactly the same except for the different titles of the inventions. Furthermore, after the abnormal patent application was noticed and voluntarily withdrawn, the patent agency again submitted multiple identical applications on behalf of their client. The agency was given the administrative penalty of "revocation of the practice license of the patent agency" due to the huge number of abnormal patent applications it represented.
2. Patent agency uses false address and contact information to submit a patent application
Case 2: CNPA found out that the addresses and telephone numbers of applicants for a large number of patent applications were incorrect. For example, If the applicant for the patent application submitted by an intellectual property agency limited company is a company with the address of "Room 602, in a building, after on-site verification by the local intellectual property office, they found out that the building only has five floors, and the sixth floor is the rooftop. Thus, there is no room 602.
Another example is that the applicant for the patent application submitted by an intellectual property agency limited company is a hospital in with a certain address in a city, and after on-site verification by the local intellectual property office, the place is a residential residence and there is no hospital around.
CNIPA issued administrative penalties in these cases, ordering the two agencies to stop undertaking new patent agency business for six months. Furthermore, they were included on a blacklist of serious violations and untrustworthiness.
3. Organized fabrication, re-buying and reselling of patents
CNIPA mentions two cases as abnormal patent applications for organized fabrication re-buying and reselling of patents.
Case 3. In the third case example, in order to obtain patent application funding for the park, an enterprise and 50 companies associated with it hired local university students to fabricate patent applications, and the applications submitted generally stacked claims and used complex mechanical structures to achieve simple functions. At the same time, these companies or their legal representatives change the applications names of others during the authorization period to their own names. Many of which are changed by the inventor, and then changed to different parties in many places across the country after the patent application is granted.
Case 4: In the fourth case example, a company formed a large-scale abnormal patent application gang, and from 2018 to 2020, many shell companies with no R&D investment, no R&D personnel, and no production and operation were registered nationwide. The companies submitted a total of 3602 abnormal patent applications. The patent claims were all manifested as stacked technical characteristics and unnecessarily reduced the scope of protection. At the same time, the above-mentioned companies also have a number of patent applications that change the applicant and inventor during the authorization period. As such, there is obvious subjective intention to defraud financial assistance and resell the patent.
The local market supervision department has ordered the companies to return the financial subsidy funds for intellectual property rights and has started criminal prosecution against the gang with the procuratorate and public security organs.
Conclusion
It is a positive sign that CNIPA is recently focusing on battling bad faith patent applications. These patents are not good for China's position as a serious IP powerhouse. By making it clear that such patents are not accepted, and agencies and companies that apply for these in bad faith will be severely punished and prosecuted, China's IP environment will benefit greatly in the long term. Hopefully, CNIPA will continue to further battle these bad faith patent applications. Changing the laws and regulations in this regard, would make it easier for CNIPA to take these bad faith applications down further in the future.
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