I. History of Utility Model Development
The world’s first utility model law was enacted and implemented by Germany in 1891, known as the “Utility Model Protection Law,” which has a history of over 130 years.
Since then, many countries have followed Germany’s example and established their own utility model patent systems or similar protection systems to safeguard inventions that, while not highly creative, have certain practical value.
China established a three-pronged patent system from the beginning, encompassing invention patents, utility model patents, and design patents.
However, on a global scale, not all countries/regions have utility model patents. For example, the United States, the United Kingdom, and Canada do not have a utility model system. Additionally, among countries/regions with a utility model system, the terminology used varies.
For instance, China refers to them as utility model patents, a term also used in Germany, Japan, South Korea, and Italy. In Thailand and Indonesia, they are called petty patents; in Australia, innovation patents; in Hong Kong, short-term patents; in France, certificates of utility; and in Malaysia, utility innovations.
II. Subject Matter Protected by Utility Models
China’s utility model patents only protect specific tangible products.
According to Article 2, Paragraph 3 of the Chinese Patent Law: “A utility model refers to a new technical solution proposed for the shape, structure, or combination thereof of a product, which is suitable for practical use.” Based on this, the “Examination Guidelines” provide detailed criteria for determining a “product.” For example, Part 1, Chapter 2, Section 6.1 states: “A product should be an object that is manufactured by an industrial method, has a definite shape and structure, and occupies a certain space.” Naturally occurring objects not made by human effort do not fall within the scope of China’s utility model protection. Products without a definite shape, such as gases, liquids, powders, or granular materials, cannot have their shapes protected as utility models. Besides objects inherently without a definite shape, those obtained through placement or stacking methods are also not protected by utility models, as their shapes are essentially arbitrary. Composite layers can be considered a product structure, such as the carburized layer or oxidized layer of a product. However, molecular structures, compositions, and metallographic structures of substances do not constitute the structure of a product. Additionally, printed layers on products, such as advertising layers on bags, are not considered product structures.
III. Examination of Utility Models
China adopts a preliminary examination process for utility models, and patent holders or interested parties can request a patent right evaluation report from the State Intellectual Property Office, which can only be applied for after the utility model patent is announced. Both invention patents and utility model patents in China require absolute novelty, which means they must be novel compared to prior art disclosed publicly in any form both domestically and abroad.
However, the inventive step requirement for utility models is lower than that for inventions. While inventions must demonstrate “prominent substantive features” and “remarkable progress,” utility models only need to have “substantive features” and “progress.” In other words, utility model patents in China need to meet a lower threshold of inventiveness to be granted protection.
The examination procedure for utility model patents includes the following stages: filing, preliminary examination, and grant. The preliminary examination covers formal examination of application documents, examination for obvious substantive defects, examination of other documents, and fee examination. Compared to invention patents, the stages of publication and substantive examination are omitted, resulting in a shorter examination cycle for utility models.
IV. Duration of Protection for Utility Models
The termination of patent rights can be categorized based on the cause of termination:
- Expiry: The protection period for invention patents is 20 years; for utility model patents, it is 10 years; and for design patents, it is 15 years, all calculated from the filing date.
- Non-payment: If the patentee fails to pay the annual fee or late fee as prescribed, the patent right will terminate from the expiration of the previous year.
V. Utility Model Patents Entering China
The “Paris Convention” does not define the concept of utility models but provides that utility models enjoy the same benefits as invention patents. The “Agreement on Trade-Related Aspects of Intellectual Property Rights” (TRIPS) also does not separately specify utility model patents. As a member of the Paris Convention, China provides utility model patent protection to foreign applicants. Therefore, applicants who file for an invention or utility model patent in another country can claim priority and apply for a utility model patent in China within 12 months.
Furthermore, China allows simultaneous applications for utility model and invention patents under specific conditions. For instance, within 12 months of filing an invention or utility model patent application in another country, the same technical solution can be used as the basis for priority in a Chinese application. These applications follow the Paris Convention provisions, allowing simultaneous applications for utility model and invention patents in China.
VI. Summary of Advantages and Disadvantages of Utility Models
Advantages:
- Quick Authorization, Same Protection: Utility model patents do not require substantive examination, and unlike invention patents which can take 2 to 5 years to be granted, utility model patents can be granted within 6 to 12 months, providing the same protection and basis for claims.
- Lower Inventive Step Requirement: The China National Intellectual Property Administration (CNIPA) requires the same novelty for utility model patents as for invention patents but has a lower inventive step requirement. The law stipulates that utility model patents need only to have “substantive features and progress,” which is lower than the requirement for invention patents to have “prominent substantive features and remarkable progress.” Therefore, utility model patents are particularly suitable for protecting improvements or modifications to existing products that do not meet the higher inventive step requirement for invention patents. The lower inventive step requirement also means that, compared to invention patents, utility model patents are not only easier to obtain but also harder to invalidate, which is an unintended benefit of lowering the patent application threshold. Germany, however, applies the same examination standards for both invention and utility model patents.
- Lower Costs, Maintenance Costs: The application and examination process for utility model patents is simpler, the statutory protection period is shorter, and the costs for granting and maintaining utility model patents are significantly lower.
Disadvantages:
- Limited Subject Matter: Unlike Germany, China’s utility model patents are only applicable to product patents with certain shapes, structures, or combinations and are not applicable to method patents or product patents for pharmaceuticals, chemicals, or new materials.
- Short Protection Period: The protection period for utility model patents in China is 10 years from the filing date. The shorter protection period makes utility model patents suitable only for products with shorter life cycles.
- Uncertain Enforceability: To enforce a utility model patent through a court or administrative litigation, the patentee must obtain a patent right evaluation report from the CNIPA, which serves as a favorable examination opinion. The official fee for a utility model patent evaluation report is almost the same as for patent examination. Similar to patent examination, the evaluation report cannot guarantee a 100% favorable outcome for the patentee. Therefore, the enforceability of granted utility model patents must be confirmed through a post-grant examination process due to the absence of substantive examination at the time of grant, resulting in uncertainty.
Conclusion:
Utility models, with their quick and easy authorization, have become one of the most commonly used protection methods in China’s patent law. When used appropriately, whether alone or as a supplement to invention patents, they can be very effective. Consider whether your company should establish its own utility model patent portfolio!