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The patent system is intended to exchange legal protection for the disclosure of advanced technologies. However, where a patent application relates to an invention involving national security or significant public interests, its disclosure may cause irreparable harm to national interests. Therefore, in order to protect national security and significant public interests, most countries have established secrecy examination systems, requiring inventors to obtain prior approval for filing patent applications abroad in respect of inventions or creations completed in their own countries.
Multinational corporations usually have R&D institutions at their headquarters and overseas. When these R&D institutions cooperate on development projects, the choice of jurisdictions in which to seek patent protection is often an important strategic decision, and the rules and practices on secrecy examination in different countries play a key role in this decision-making process.
This article discusses, under the Chinese patent law framework, how to determine whether an invention or creation is completed in China, as well as the necessity and methods of obtaining permission to file abroad, with a view to providing guidance for enterprises in patent compliance management and in formulating patent filing strategies.
1. What Is Secrecy Examination / Permission to File Abroad
Under the Chinese patent law framework, there is no term equivalent to “foreign filing license” as used in the U.S. legal system. The corresponding concept is the secrecy examination system. That is, for inventions or utility models completed in China, a secrecy examination by and approval from the China National Intellectual Property Administration (CNIPA) must be obtained in advance before filing patent applications in foreign countries. This system was introduced in the third amendment to the Patent Law in 2008. The secrecy examination requirement applies to invention patents and utility model patents, but not to design patents.
CNIPA will, upon the applicant’s request, issue a notice of secrecy examination, namely the “Notification of Opinion on Secrecy Examination for Filing Patent Applications Abroad,” specifying whether it approves the filing of patent applications outside China.
Secrecy examination is a mandatory procedural requirement. Regardless of whether the actor is negligent or intentional, or even if the invention does not need to be kept confidential, filing a patent application abroad without undergoing secrecy examination by CNIPA will result in the corresponding Chinese patent being invalid. Once the secrecy examination provisions are violated, there is no remedy available.
2. Chinese Patents Invalidated Due to Lack of Secrecy Examination
In its 2022 Top Ten Typical Patent Invalidation Cases, CNIPA disclosed a utility model patent entitled “Expandable Drive Assembly Device and Lifting Column,” which was declared entirely invalid (No. 55586) because the patentee failed to fulfill its obligation to undergo secrecy examination before filing abroad.
This utility model patent describes a fall-prevention elevator, which improves the safety and stability of the elevator through the arrangement of a bearing column, a screw, a load assembly and a drive assembly. The substantive content of this invention or creation was completed in China, but the patentee completely ignored the secrecy examination requirement and directly filed a provisional application in the United States. Claiming priority from the prior U.S. application, the patentee then extended the patent application to China, and the Chinese patent was quickly granted without substantive examination.
During the patentee’s enforcement of the patent, the alleged infringer filed a request for patent invalidation and discovered that the patentee had neglected patent compliance management and violated the mandatory procedural provisions. The patentee’s negligence led to the Chinese patent being declared entirely invalid, thereby losing the legal basis for enforcement.
This case explains in detail the applicable standards for the secrecy examination provisions in the Patent Law, highlights the importance of procedural compliance, and reminds technological innovators that they must comply with mandatory legal provisions when applying for patents in order to avoid the risk of their patent rights being declared invalid. If a patentee files a patent application abroad without approval and thereby discloses state secrets, it may bear further liabilities, including criminal liability.
3. Determining Whether an Invention Is Completed in China
If the substantive content of an invention is completed within the territory of China, the invention is deemed to be completed in China. For inventions or creations completed through cooperation by multinational teams, in determining whether the substantive content of the invention is completed in China, we recommend considering the following dimensions:
3.1 Determining the Substantive Content of the Invention
As to how to determine the substantive content of an invention, CNIPA expressed the following view in the above-mentioned case:
“As to what constitutes the substantive content of a technical solution, it should be determined from the perspective of the content of the invention or creation and the technical solution in the application documents. On the one hand, such substantive content should be reflected in the claims in dispute, especially the independent claims; on the other hand, in principle, such substantive content should be content that has not been disclosed in the prior art.”
Therefore, the definition of the substantive content of an invention is not limited to the claims, but also includes the content recorded in the specification. In the secrecy examination process, CNIPA examines the technical solution itself that was completed in China, rather than the scope of protection sought by the applicant.
In addition, determining the substantive content of an invention also requires consideration of the level of prior art before the filing date, so as to identify the improvements of the invention over the prior art. In other words, the substantive content of the invention should be novel and not disclosed in the prior art.
3.2 Determining the Contribution of the Inventors
According to Chinese patent regulations, an inventor is any person who has made a creative contribution to the essential features of an invention. For inventions or creations jointly completed by multiple inventors from different countries, determining the contribution of each inventor is crucial for identifying where the substantive content of the invention was completed.
The contribution of an inventor may be assessed by considering whether each inventor has contributed to the key features that give rise to the technical functions and effects, or to auxiliary features. In addition, for Chinese patents that have been published by third parties, the order of inventors may also serve as a reference for assessing the contribution of each inventor. Although China has no explicit provisions linking the order of inventors to their level of contribution, in practice, there are significant differences between the first-named inventor and subsequent inventors in terms of professional title evaluation, remuneration and benefits. Therefore, the order of inventors is generally determined based on the primary or secondary nature and the extent of each inventor’s contribution.
3.3 Determining Cross-Border R&D Capabilities
Similar to the United States, China determines whether secrecy examination is required based on the place where the invention is completed, rather than on the nationality or residence of the inventors.
In cross-border collaborative inventions, the actual R&D capabilities at the locations of the inventors are an important factor. Specifically, R&D capabilities involve the local level of technology, the equipment and facilities used for the invention, and R&D funding, among other aspects. In the above invalidation case, there was no evidence that the patentee had R&D functions outside China, which was also one of the reasons for the patent being invalidated.
Moreover, it is possible that multinational companies may second employees among their subsidiaries in different countries and have them cooperate with local R&D teams to complete inventions. Therefore, detailed records of the locations and processes of innovative R&D are crucial for determining the R&D locations and the inventors. Such records may take the form of laboratory notebooks, project reports, correspondence records, and the like.
4. How to Request Secrecy Examination
There are several ways to undergo secrecy examination before filing abroad, and the appropriate method may be chosen according to the company’s different patent filing strategies:
4.1 First Filing Outside China
If the applicant needs to file the first patent application outside China, the applicant must separately request secrecy examination from CNIPA in advance. When requesting secrecy examination, a Chinese-language document must be submitted, including detailed information on the technical content of the invention.
4.2 First Filing in China
If the first patent application is filed in China, a request for secrecy examination may be made to CNIPA at the time of filing the Chinese patent application, or within the Paris Convention priority period and before filing patent applications abroad. This method is relatively simplified, as there is no need to separately prepare and submit documents describing the technical solution of the invention. Unlike in the United States, filing the first application in China does not automatically constitute a request for secrecy examination.
4.3 Filing a PCT Application with CNIPA
Filing a PCT application with CNIPA is deemed to constitute a simultaneous request for secrecy examination with CNIPA. Since a PCT application may be filed in English or Chinese, this method may be more economical and convenient for multinational companies that do not intend to seek patent protection in China.
5. Time Limit for Secrecy Examination
The examination period for secrecy examination is also a factor to be considered in patent filing strategies. In practice, where a request for secrecy examination is filed simultaneously with the patent application, the examination result is usually received in about one week; where a request for secrecy examination is filed by other means, the examination result is usually received in about one month. In complex situations, CNIPA will issue a notice to temporarily defer foreign filing within two months, and then make a decision on secrecy examination within four to six months.
Conclusion:
Patent compliance management for multinational companies is more complex due to the differing rules in various jurisdictions. Patent filing strategies involve not only R&D investment, business planning and innovation protection, but also careful compliance review and arrangements to avoid the risk of patent invalidation.
For inventions or creations completed in China, undergoing secrecy examination and obtaining permission to file abroad are mandatory. During the patent application process, recording and retaining detailed information on the process of the invention or creation, and preserving declarations signed by the inventors, help clarify each inventor’s contribution and lawfully establish the company’s ownership, so as to address potential future disputes over the identification of inventors and ownership. By understanding and complying with these patent regulatory requirements, companies can better protect their innovative achievements and manage their patent portfolios.
