Abstract
I. Introduction
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China is one such market. As one of the world's fastest growing economies, China has committed to developing into an innovation-based country by 2020. As such, companies doing or looking to do business with or in China should establish adequate patent protection there. Such needs are particularly important for U.S. life sciences—including both biotechnology and pharmaceutical (hereinafter bio/pharma)—companies that look to reap benefits from China's vast market size and huge potential for business growth. However, given the innovation-driven and -dependent nature of this sector, many are concerned about China's patent system and have viewed it as severely flawed, dysfunctional, or even mysterious; and thus have (perhaps unknowingly) prevented themselves from effectively procuring patent rights in China.
This article intends to shed light on China's patenting system by comparing some of the key aspects of the patent procurement procedures for bio/pharma inventions in the U.S. and China. Some practical tips for bio/pharma inventions are provided at the end of this article.
Before diving into the details, a significant difference between the two legal systems should be noted: China has a civil law system, as opposed to the United States' common law. Therefore, instead of relying on precedents set by courts or a competent government authority, precedential orders or judgments usually are not followed in China. One possible exception is directories issued by China's Supreme People's Court (SPC), including advisory opinions and guidelines on statutory interpretations, which are binding on the lower courts. However, even those directories are clarifications of statutes and thus are materially different from opinions issued by U.S. courts in that they lack factual contexts.
With regard to relevant laws, rules, and regulations, China's most recently amended patent law was enacted in 20081 and is equivalent to Title 35 of the U.S. Code (USC). Implementing regulations, which contain many of the “how to” instructions for patent practitioners,2 are equivalent to the U.S. rules of practice codified in Chapter 37 of the U.S. Code of Federal Regulations (CFR). China's State Intellectual Property Office (SIPO) also has Guidelines for Patent Examination,3 which are equivalent to the U.S. Manual of Patent Examination Procedure (MPEP) published by the Patent and Trademark Office (PTO).
With this background, this article provides comparative analysis of types of patents, patent-eligible subject matter, standard(s) for patentability, and post-grant proceedings in the two countries, in the context of their respective relevant laws, rules, and regulations, along with discussion of certain U.S. case law, as well as directories and decisions of China's SPC and SIPO.
II. Types of Patents
Both the U.S. and China have three types of patents (two of which are essentially the same, despite some differences in nomenclature), as listed in Table 1. A so-called “invention patent” in China is equivalent to a U.S. utility patent, directed to a composition of matter, machine, process, manufacture, and improvements thereof. Both countries grant design patents that protect ornamental designs. China does not allow plant patents, but the U.S. provides protection for asexually reproduced plants. A third type of patent offered in China (but not the U.S.) is utility model patents, which protect only new shapes and/or structural features of a product that have practical or industrial use. It is worth noting that utility model patents are not subject to substantive examination but generally allowed after an examination of the formalities.
Whereas U.S. patent law allows provisional applications (as a type of utility patent application) that do not require claims for priority date purpose, China does not provide such an opportunity. A Chinese patent application must include at least one claim regardless of whether it is used as the basis for a priority claim by a later-filed application.
The following discussion focuses on the standards governing utility patents, which are the type of patent most relevant to the bio/pharma industries.
III. Patent Eligible Subject Matter
One of the first thresholds in obtaining a patent is what constitutes patent-eligible subject matter. In the U.S., that landscape has changed significantly in the past few years, resulting in a narrower set of patent-eligible subject matter than previously available to the bio/pharma industries. In China, the law regarding patent eligibility has been relatively stable. Nonetheless, differences between the two countries' systems remain as deep as the ocean dividing them.
A. U.S.
Under U.S. patent law, “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor.”6 However, the U.S. Supreme Court has interpreted this provision multiple times, and articulated three exceptions to patent eligible subject matter under 35 USC §101: the laws of nature, physical phenomena, and abstract ideas.7
For example, in 1948, in Funk Brothers Seed Co. v. Kalo Inoculant Co. (“Funk Brothers”), the Supreme Court held that an inoculant comprising a plurality of selected mutually noninhibitive strains of root-nodule bacteria was not patent eligible, as being based on properties of bacteria that are “no more than the discovery of some of the handiwork of nature.”8
In a 1980 decision in Diamond v. Chakrabarty, the Supreme Court contrasted it with Funk Brothers and considered that an oil-eating bacterium containing at least two stable energy-generating plasmids “qualifies as patentable subject matter” because it is “a nonnatually occurring manufacture of composition of matter.”9
The most recent case concerning patent eligibility of biotechnological compositions of matter is the June 2013 decision in Association for Molecular Pathology, et al. v. Myriad Genetics, Inc., et al. In that case, the Supreme Court ruled that patent claims covering isolated, naturally occurring DNA sequences corresponding to human breast cancer genes (BRCA1 and BRCA2) are not patent eligible.10 In contrast, complementary DNA (cDNA) was held to be patent eligible as non-naturally occurring.11
In view of Funk Brothers, Chakrabarty, and Myriad, the general trend appears to be a narrowing scope of patent eligible composition of matter, where the line is drawn at naturally non-ccurring versus non-naturally occurring substances. Following the logic presented in Myriad, it is plausible to argue that other natural compositions, such as small molecules, proteins or cells—even in an isolated or purified form—also may not be patent eligible. Unless the Myriad ruling is overturned by legislation, the bio/pharma industries might have to limit composition of matter claims to those containing artificial modifications, such as recombinant DNA or protein or analogous molecules.
In addition to compositions of matter, the patent eligibility of certain methods has also been considered by the Supreme Court. In Mayo Collaborative Services v. Prometheus Laboratories, Inc., a landmark case decided in 2012, the Court invalidated Prometheus' patents directed to diagnostic methods based on the concentration of a metabolite in the patient, as they only “set forth laws of nature—namely, relationships between concentrations of certain metabolites in the blood and the likelihood that a dosage of a thiopurine drug will prove ineffective or cause harm.”12
Taken together, these cases have significantly impacted the scope of patent-eligible subject matter in the U.S., expressly excluding naturally occurring DNA (and possibly other natural compositions of matter)—even in its isolated or purified form—and methods directed to laws of nature from the broad categories provided under 35 USC §101. The patent eligibility of some commonly sought-after subject matters in the U.S. is summarized in Table 2.
×=not eligible; √=eligible.
B. China
In China, a patent-eligible invention is a new technical solution proposed for a product, process, or improvement thereof.13 Any inventions “that violate the law or social ethics, or harm public interests” are not patent eligible.14 In the area of biotechnology, examples of such unpatentable inventions include human embryonic stem cells and preparation methods therefore; the human body at any stage of formation and development; and inventions based on indigenous genetic materials without proper prior approval.15
In the boarder life sciences sector, certain inventions are specifically excluded from patent eligibility:
(1) scientific discoveries; (2) rules and methods for intellectual activities; (3) methods for the diagnosis or treatment of diseases; and (4) animal or plant varieties.16
As explained in the Guidelines for Patent Examination 2010, “scientific discoveries” refers to “the revelations of substances, phenomena, transformation processes and their features and law, which objectively exist in the nature.”17 Thus, this concept is similar to the “laws of nature” and “physical phenomena” categories excluded from patent eligibility in the U.S. “Intellectual activities,” also referred to as “mental activities” in the Guidelines, are defined as “human's thinking movements,”18 which is equivalent to the “abstract idea” category similarly excluded in the U.S.
The other two Chinese exclusions do not have U.S. counterparts. “Methods for the diagnosis or treatment of diseases” are excluded from patent eligibility for humane and ethical reasons.19 It should be noted that such methods are not limited to those practiced on humans, but also those applied to animals.20 However, instruments or apparatuses for implementing these methods, and materials for use in connection with these methods, are patent eligible.21
Patent ineligible “plant varieties” include the whole plant and its reproductive material, e.g., a seed.22 As an example of “animal varieties,” an embryonic stem cell of an animal and an animal at various stages of formation and development are patent ineligible, with the exception of somatic cells or part of an animal.23 It is worth noting that transgenic animals and plants are also considered “animal and plant varieties.”24 However, microorganisms, genes, and DNA fragments, if isolated and having industrial use, are
The patent eligibility of some commonly sought-after subject matters in China is summarized in Table 2.
C. U.S. and China Compared
Table 2 compares U.S. and Chinese patent eligibility for some of the common subject matters in the bio/pharma industry. In summary, for compositions of matter, unlike U.S. patent law, Chinese patent law is receptive to naturally occurring substances to the extent they are isolated or purified, while expressly excluding plants or animals from patent eligibility. On the method side, methods of treatment or diagnosis are patent ineligible in China, whereas U.S. patent law allows such methods as long as they do not merely recite laws of nature or abstract ideas.
IV. Standard for Patentability
A. Novelty and Scope of Prior Art
Both countries require a patentable invention to be novel, i.e., new or unanticipated, in view of the prior art. However, the scope of prior art is defined differently.
In China, prior art is defined broadly to include all domestic and foreign publications as well as public use or making anywhere in the world before the filing date of the application or the applicable priority date.26 It should be noted that an earlier-filed patent application disclosing the identical invention, regardless of its publication date, also defeats the novelty of the same invention claimed in any later-filed application.27 For this reason, China is referred to as a “first-to-file” jurisdiction, which means that the right to patent an invention lies with the first person to file an application therefor, regardless of the date of actual invention.
The U.S. has a narrower definition for prior art, although the gap with China is closing after the changes imposed by the Leahy-Smith America Invents Act (AIA).28 Some of the key changes are discussed below.
Briefly, applications filed before, or having all priority claims prior to March 16, 2013, will continue to be examined under the pre-AIA rules, which have a more limited scope of prior art.29 For example, public uses and sales are not prior art unless they occur in the U.S.;30 published U.S. patent applications are not citable as of their foreign priority date;31 and PCT publications must be in the English language to qualify as prior art.32 An applicant also has the opportunity to provide a written affidavit to “swear back” the date of invention to pre-date a prima facie prior art reference if that publication or activity occurred within one year prior to the earliest priority date of his or her application.33 In addition, pre-AIA applications are subject to the “first-to-invent” doctrine, under which a patent is granted to the person who first invented the claimed subject matter, rather than to the person who first filed a patent application on the same invention.34 Priority of invention amongst rival applicants is decided by the PTO in an interference proceeding.35
Under the provisions effected by the AIA, a patent application filed after and, if applicable, having any priority claims on or after March 16, 2013, is subject to an enlarged pool of qualifying prior art.36 For example, under the new law, public uses and public sales anywhere in the world constitute prior art; the foreign priority date of a published U.S. patent application is recognized for prior art purpose; and PCT publications in any one of the ten current official PCT languages are considered prior art.37 This essentially eliminates certain “secret” prior art that is not citable under the pre-AIA rules, such as prior secret invention by another, prior knowledge transferred from another to the applicant, and prior secret sale.38 Although broadening the scope of prior art, the AIA carved out a 1-year grace period limited to the inventor's own activities.39 The AIA has also changed the U.S. patenting system from “first-to-invent” to “first-inventor-to-file,” which, among other things, eliminates “swearing back” as an option for removing prior art falling between the invention date and the filing date.40 Under the “first-inventor-to-file” system, interference proceedings are replaced by derivation proceedings for applications filed on or after March 16, 2013.
In summary, the AIA reforms bring the U.S. prior art standards closer to the Chinese system. However, given the significant examination backlog at the PTO, pre-AIA applications are likely to remain dominant for at least another 2 or 3 years. Thus, in practice pre-AIA rules will remain part of “current” law and coexist with post-AIA rules for awhile.
B. Non-Obviousness or Inventive Step
A second requirement for patentability in both countries is that the claimed invention be “non-obvious” (the U.S. term of art) or possess an “inventive step” (the Chinese standard) over the prior art.
Specifically, China's Patent Law defines “inventiveness” as “when compared with technology existing before the date of application, the invention has prominent substantive features and represents a notable progress.”41 Although the definition of “prior art” for evaluating inventiveness is largely identical to that in connection with examination of novelty, the Guidelines specifically state that any unpublished patent application at the time of filing will not be used as a prior art reference in examining inventiveness.42 That is, the SIPO will consider an unpublished but earlier-filed application for the purpose of evaluating novelty only if it discloses the same invention as the application at hand (which is filed later): once that threshold is passed, the earlier-filed application will not be used as prior art to reject a claim for allegedly lacking an inventive step. A claimed invention meets the “prominent substantive feature” requirement when it is non-obvious to a person skilled in the art in view of the prior art, in the sense that a person skilled in the art cannot obtain the invention merely by logical analysis, inference, or limited experimentation on the basis of the prior art.43 Note that the fictional “person skilled in the art” is “not presumed to have creativity.”44 In practice, the Guidelines provide a three-step method for assessing inventiveness: (1) determining the closest prior art, which may be from the same or different technical field as the claimed invention; (2) determining the distinguishing feature(s) of the claimed invention compared with the closest prior art, and the technical problem solved by the invention; and (3) determining whether there exists a technical motivation to apply such distinguishing features to the closest prior art in solving the existing technical problem, which technical motivation may be found when the distinguishing feature is common knowledge or a relevant technical means known in the prior art and having the same function.45 The “notable progress” requirement is met when the claimed invention can produce advantageous beneficial technical effects compared with the prior art, such as overcoming defects in existing technology, providing a different technical solution to a technical problem, or representing a new trend of technical development.46
In the U.S., the case law has long settled that a patent may not be obtained if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious to one of ordinary skill in the art.47 In Graham v. John Deere Co., the Supreme Court decided that a prima facie obviousness test depends on: (1) the scope and content of the prior art; (2) the level of ordinary skill in the art; (3) the difference between the claimed invention and the prior art; and (4) any evidence of secondary factors.48 In 2007, the U.S. Supreme Court, in its ruling in KSR v Teleflex, relaxed a long-held “teaching, suggestion, and motivation” test for determining obviousness49 and held that motivation to combine known elements may be found beyond specific teachings in the prior art references, such as “the effects of demands known to the design community or present in the marketplace” and “the background knowledge possessed by a person having ordinary skill in the art.”50 It was also held that a combination resulting from a “finite number of identifiable predictable solutions” is likely obvious,51 and that a person of skill in the art is “one of ordinary creativity, not an automaton.”52
Thus, the post-KSR standards for obviousness in the U.S. have been heightened, which, in combination with the enlarged prior art pool under AIA, have increased the burden on the applicant in rebutting a prima facie case of obviousness. Compared with the relatively rigid three-step method applied by the SIPO in assessing inventiveness, applicants in some cases have historically found it easier to overcome prior-art based rejections in China than in the U.S. However, recent trends in China suggest that the bar for inventiveness is rising higher.
A recent SIPO Patent Reexamination Board's (PRB) decision to invalidate all claims in a Chinese patent can illustrate the heightened threshold of inventiveness in China.53 The subject patent concerned Gilead Sciences' anti-HIV drug Viread®, with claims directed to complexes and salts of a free-base compound, second medical use of the complexes or salts, preparatory method for the complexes or salts, and compositions of the complexes or salts.54 No specific salt was particularly recited in the claims. To support the claims, Gilead Sciences stated in the specification that the claimed complexes or salts have, surprisingly, the best combination of physical chemical properties, including, e.g., melting point, solubility, and stability in both solid state and water solution; and that these properties confer excellent bioavailability on the drugs. The four examples in the specification discussed the physical properties of only one salt (fumurate) and compared its stability in the solid state with that of a citrate salt. The PRB stated that the comparison of the fumarate salt with the citrate salt in only one aspect was insufficient and the patentee did not explain why the citrate salt was used as the basis for the comparison. Therefore, the PRB held that one could not conclude that the fumarate salt has, surprisingly, the best combination of physical chemical properties. Further, because the specification did not provide examples or data showing the excellent bioavailability of the salts as claimed, the PRB invalidated the patent additionally for lacking supporting data.
It may suffice to say that both the U.S. and Chinese patent laws for determining obviousness/inventiveness are becoming increasingly stringent. Close attention must be paid to current case law and decisions by the competent authorities in that regard.
C. Patentability Issues Not Related to Prior Art
1. Written Description and Enablement
Both Chinese and U.S. patent laws require a complete written description that enables a person skilled in the art to practice the claimed invention. A description should include figures when they are necessary to understand the claimed invention.
In the U.S., the written description requirement is separate and distinct from the enablement requirement.55 For written description, “the ‘essential goal’ of the description of the invention requirement is to clearly convey the information that an applicant has invented the subject matter that is claimed.”56 An applicant shows possession of the claimed invention by describing the claimed invention with all of its limitations, using such descriptive means as words, structures, figures, diagrams, and formulas that fully set forth the claimed invention.57 By comparison, enablement requires that the disclosure of a U.S. patent application or issued patent teach those skilled in the art how to make and use the full scope of the claimed invention without “undue experimentation.”58 The Federal Circuit has explained that although a disclosure must enable one of ordinary skill in the art to practice the full scope of the invention, “[t]hat is not to say that the specification itself must necessarily describe how to make and use every possible variant of the claimed invention, for the artisan's knowledge of the prior art and routine experimentation can often fill gaps, interpolate between embodiments, and perhaps even extrapolate beyond the disclosed embodiments, depending upon the predictability of the art.”59 The PLPRC provides that the description shall set forth the invention in a manner “sufficiently clear and complete so as to enable a person skilled in the relevant field of technology to carry it out.”60 “Clarity” requires that the application describe the technical problem, the solution, and the advantageous effects of the invention.61 To meet the “completeness” requirement in China, the Guidelines require that the description of an application include contents that would help the reader understand the invention; contents that set forth the novelty, inventiveness, and utility of the invention; contents that enable the practice of the invention; and everything that a person skilled in the art could not obtain directly and solely from the prior art in order to practice the invention.62 Data not included in the original application to support either a composition or a method claim will not be accepted by the SIPO. If the claimed invention is a new use of a known compound, it is even more important to set forth experimental or test data for proving the new use.
It should be noted that in both countries, “new matter” rejections are often raised under the written description requirement where new or amended claims that introduce elements or limitations which are not supported by the originally filed disclosure would violate the written description requirement. In practice, China has a stricter standard, by requiring literal or express support in the original specification for claim amendments made later. In the U.S., it is possible to point to drawings for support, or to paraphrase certain disclosures in the description to support claim amendments.
2. Specific Examples and Best Mode
Although rarely raised as a ground of rejection, the U.S. patent law requires that the application provide the best mode of an invention as contemplated at the time of the invention.63 Failure to disclose the best mode could be used as a defense to validity in infringement suits until recently eliminated by the AIA.64
On the other hand, China's Patent Law does not have a best mode requirement and requires only that the description be clear enough to allow a skilled person to carry out the invention.65 However, the Guidelines do require an application to include a detailed description of the “preferred embodiments” in the form of specific examples.66 The proper number of specific examples should be determined according to the nature of the invention, the technical field to which the invention relates, prior art, and the claim scope sought. But in practice, the scope of a claim allowed by the SIPO is dependent mainly on the number and collective scope of the examples disclosed in the specification. If a skilled person in the art, in view of the disclosure in the specification, can reasonably predict all of the equivalent variations or if obvious analogs of the examples have the same properties or utilities as the specific examples, then the Examiner is more likely to allow a claim to such equivalent variations or obvious analogs. In general, claims directed to pioneering innovations are likely to receive a broader scope than those directed to mere improvements.
V. Post-Grant Proceedings
In China, the validity of an issued patent can be challenged by anyone at any time after the patent is granted by filing an invalidation request with the PRB of the SIPO.67 An equivalent of the pre-AIA Board of Patent Appeals and Interferences (BPAI), or the post-AIA Patent Trial and Appeal Board (PTAB) of the PTO, the PRB is the sole jurisdiction for challenging the validity of a patent. That is, Chinese courts do not adjudicate invalidity claims. Grounds for filing an invalidation request include lack of novelty, inventiveness, or practical applicability; inadequate enablement or written description; indefinite claims; addition of new matter through amendment; patent-ineligible subject matter; and double patenting.68 The requester theoretically has unlimited chances to file such requests, but the principle of res judicata applies.69
A first difference is that competent U.S. courts, as well as the PTO, may hear and decide invalidity issues. The U.S. proceeding, similar to Chinese invalidation, prior to AIA was reexamination conducted ex parte or inter partes in front of a primary examiner of the PTO's Central Reexamination Unit.70 Grounds for both are limited to novelty and obviousness issues based on patents and printed publications. The threshold standard for initiating reexamination is whether the prior art raises a substantial new question of patentability of at least one claim.71 During reexamination, only prior patents and printed publications will be considered.72 Unlike ex partes reexamination, where estoppel does not attach to a challenger, the challenger may not institute another proceeding before the PTO or assert an invalidity defense in litigation based on any ground that was raised, or could have been raised, in the inter partes reexamination proceeding.73
The AIA has changed the post-grant proceedings in a significant way. Beginning September 16, 2012, although ex partes reexamination remains in effect, inter partes reexamination will be replaced by inter partes review (IPR) conducted before the PTAB.74 An IPR is available only after 9 months following grant of a patent, or, if later, after the termination of a post-grant review (see below).75 Whereas (like inter partes reexamination) the invalidity grounds for IPR are confined to novelty and obviousness issues, the threshold standard has been changed to a reasonable likelihood that the challenger will prevail with respect to at least one claim in the challenged patent.76 Finally, estoppel will attach to an IPR challenger.77
The AIA also adds a new post-grant proceeding, post-grant review (PGR).78 This proceeding is available only for patents examined under the AIA first-inventor-to-file rules—i.e., patents effectively filed on or after March 16, 2013.79 The petition for PGR must be filed within 9 months of the patent being granted and is reviewed and decided by the PTAB.80 The grounds are broader than reexamination and include lack of patent eligibility, novelty, obviousness, enablement, written description, and indefiniteness.81 A PGR will be instituted if it is more likely than not that at least one of the claims challenged in the petition is unpatentable.82 If PGR results in a final written decision, estoppel attaches, and the petitioner cannot institute another proceeding before the PTO or assert an invalidity defense in litigation based on any ground that the petitioner raised or reasonably could have raised during that PGR.
A summary of the currently available U.S. and China post-grant proceedings is provided in Table 3.
VI. Practice Tips for Patenting Bio/Pharma Inventions
A strong patent starts with well-drafted claims and specification. In addition to drafting the claims with the closest prior art in mind, it is important to have a complete detailed description to support claims of different scopes. To support broad claims, the specification shall include a complete and detailed description that is commensurate with the scope of the claims sought. The examples should be representative of the claim scope and the variations (or Markush group) of each limitation, and this requirement is particularly emphasized by the SIPO. Therefore, to obtain a reasonably broad claim, the specification must include a fairly large number of examples of different variations to support the claimed invention, whether the invention is new compositions or new utilities (e.g., treatment of certain diseases). Further, in order to have claims covering specific embodiments of compounds or biological products, SIPO requires the specification to include actual data from tests or experiments. Prophetic examples of the compounds or biological products, without showing the actual data, are unlikely to be allowed. The data are not required to be biological or pharmaceutical activities data; however, it is safe to say that data that can be derived without experiments or tests (e.g., mass spectra data or the molecular weight) alone are unlikely to be enough to satisfy SIPO's data requirements. Therefore, to meet the heightened requirements in the SIPO, a patent application certainly should include as much and as complete information as possible in order to obtain claims with the maximal scope.
When considering patent protection, it also is important to determine what subject matter to pursue. As noted above, in China, methods for the diagnosis or treatment of diseases are expressly excluded from patent eligibility. However, such method claims can be rewritten into the so-called Swiss-style medical use claim: e.g., “use of compound A for the manufacture of a medicament for treatment of disease X.” In fact, it is recommended that such medical use claims be included in an international (PCT) application so as to provide adequate support for subsequent national-phase filings in China as well as in other jurisdictions that do not allow diagnosis/treatment claims (such as Europe and Japan).
During prosecution, applicants should bear in mind that China has a strict requirement for literal support of claim amendments in the original specification. Furthermore, whereas it is a common and accepted practice for a U.S. patent applicant to submit, in responding to an Office action, data that were not included in a specification to support the stated or claimed utility of an invention, the SIPO will not consider such new data. Thus, to the extent possible, it is highly recommended that actual data, in particular those supporting surprising results, be included in the specification at the time of the filing.
In both the U.S. and China, the standard for determining obviousness/inventiveness has become increasingly stringent. To better guide patent prosecution, close attention must be paid to current case law and decisions by the competent authorities.
In conclusion, there are many similarities and distinctions between the U.S. and China's patenting systems. A competent patent counsel needs to familiarize herself or himself with both systems in order to help companies with business interests in both countries—in particular, bio/pharma companies, where the stakes are high—procure adequate patent rights.