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Revised guidelines set to protect business models

Wang Xin
Updated: Mar 30,2017 9:40 AM     China Daily

The revised Guidelines for Patent Examination, a new set of rules regulating patent filings in China, will take effect on April 1, ushering in expanded intellectual property protection for business models, the internet, e-commerce and big data, experts said.

“The changes in the latest guidelines signal a major revolution in our IP legal framework, expanding patents’ coverage,” said Wu Handong, a renowned IP law expert and the former president of Zhongnan University of Economics and Law in Hubei province.

Among the major amendments is one concerning business models. Under the current Patent Law, they are generally excluded from patent claims.

Yet, according to the new guidelines, filings involving both business methods and technical characteristics are now patentable.

Wu cited the United States to illustrate that there is precedence for such legislation worldwide.

Filings featuring the combination of business models and technology still need to meet the patentability requirements of novelty, inventiveness and usefulness, he said.

A host of innovative business models in such sectors as finance, leasing, auctions, investment, marketing and advertisement are emerging amid the rapid development of internet technologies, offering more user-friendly experiences and increased efficiency in the distribution of social resources.

Their filings can now be patented as encouragement and protection of technological solutions concerning business models, according to the State Intellectual Property Office.

Innovations by business models draw a throng of imitations from other enterprises keen to cash in. As a result, the innovators’ accomplishments go unrewarded, as they cannot obtain justified returns from their investments, Wang Honglei, an IP attorney based in Guangdong province, told business portal Caixin.

The new guidelines open a door to protection of innovative business models and methods, Wang said.

Another highlight in the guidelines concerns the distinction between computer programs and related inventions. The former are generally considered unpatentable as they are “rules and methods for mental activities”, while the latter are eligible for patents.

A lack of distinction between the two in the previous regulations tended to result in rejection of patent applications for the related technologies.

Software is, in essence, a technological solution based on computer language, Wang said. Before the amendment, it was a common practice to “bind software to hardware” in patent filings in a bid to increase odds of approval, he said.

The amendment will change the industry practice and reduce difficulties in maintaining rights in subsequent patent disputes, he noted.

With software protection on the rise, software’s value will gain more acceptance and consumers will become more willing to pay for it, helping to create a friendly environment for developing high-quality software, he added.

In addition, the revisions also include a period extension for consulting and duplicating patent applications, which will help to monitor processing and improve patent quality. The amendment will prove to be of great significance to the entire IP system, Caixin quoted Zhang Taolue, an associate professor at the Tongji Law School in Shanghai, as saying.

The new guidelines still face challenges in implementation, Zhang said. “While advanced international practice can be taken as a reference, it still needs to be tested in practice.”

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