SUMMARY

This research is composed of four parts: (1) an overall scenario of the development status quo and the future of the Creative Industry in China, including the analysis of several representative sub-industries in particular and the analysis of the industrial design existing in the Creative Industry; (2) an overall scenario of evolution of Chinese legal regime to protect industrial design in last three decades including the essential changes occurred in the third and fourth revisions of Patent Law in 2000 and 2008 respectively, which established the judicial review on final reject of application of industrial design and improved the preliminary examination of industrial design, which would depend on the objective assessment in aspects of judicial review and practices of China’s Patent Office; (3) an overall scenario of judicial protection for industrial design in accordance with the Chinese Patent law and judicial interpretation promulgated by China’s Supreme People’s Courts at both the national and provincial levels, in particular, the relevant cases tried by Higher Courts in cities of Shanghai, Beijing, and the provinces of Jiangsu, Zhejiang and Guangdong so as to compare the judicial practices in Shanghai and other cities and provinces; (4) an overall scenario of the comparison of industry design regimes in several representative countries (regions), particularly in the protection of Graphical User Interface (GUI) as an industrial design.

It has been more than three years since the China’s Patent Law of the 2008 Revision (New Patent Law) was entered into force on October 1, 2009. During the past three years, the Rules for the Implementation of the New Patent Law and Guidelines for Examination that work together with the New Patent Law have also experienced a corresponding revision. In 2009, according to the New Patent Law, the China’s Supreme People’s Court promulgated the new judicial interpretation on patent litigation. All these new rules have brought some new problems in administrative and judicial practices with respect to patent for industrial design.

Considering the above mentioned developments of laws and regulations, the research was conducted in the hope to understand the new problems of the legal framework for protection of industrial design in recent years. This final report consists of nine chapters.

Chapter I is a brief introduction to the industrial design and legal regime to protect the patent for industrial designs. Chapter II is a general picture of Creative Industry in China and the existing and potential industrial designs in it. The Chapter III is an analysis of the patent application, grant and validity of the industrial design in China, mainly in the form of analyzing the data, tables and diagrams organized in different ways. Chapter IV focuses on the analysis of the New Patent Law, Rules for the Implementation of the New Patent Law in 2010 and Guidelines for Patent Examination in 2010, the underlying reasons of the most important revisions were illustrated, both in theory and practice, from perspectives of the general policies and economic interests, etc. Chapter V is a research on the problem of the potential overlaps and conflicts between industrial design and other rights, both in theory and practice. Chapter VI is a comparative law review of industrial designs in different regimes, such as the EC, Germany, the UK, Hong Kong, the US and Japan. The US part also took an examination of the recent Apple v. Samsung case. Chapter VII is a brief case report concerning industrial designs which is divided into the administrative part (confirmation or nullification of patent rights in Beijing) and the judicial part (infringement of patent rights in five main provinces/municipalities). Great efforts have been made to analyze the new problems of the changing system of industrial designs in China. Chapter VIII is a detailed discussion about industrial designs in electronic products (GUIs). The granted patent of industrial designs in several main categories of electronic products was analyzed, the granted patent of very few GUIs as exceptional cases was questioned and some legislative advice on the protection of GUIs as industrial designs in China was proposed. Chapter IX is a detailed discussion about animation industry, in which the necessity of protection of derivative products of animation under the regime of industrial designs was highlighted.

 Chapter I  An Introduction to the Patent for Industrial Design

The New Patent Law defines the designs in an elementary way as “with respect to a product, new designs of the shape, pattern, the combination thereof, or the combination of the color with shape and pattern, which create an aesthetic feeling and are fit for industrial application. In accordance with the administrative interpretation by State Intellectual Property Office of the People’s Republic of China (SIPO), there are four more specific requirements supplementing the abovementioned definition: (1) industrial design is a design of the shape, pattern, the combination thereof, or the combination of the color with shape and pattern; (2) industrial design pertains to the appearance of products; (3) industrial design is aesthetic; and (4) industrial design can be applied in industries.

According to the definition and further requirements, the concept of industrial design has an extension, i.e., creative design. Industrial design is related to, but also different from creative design. Creative design can obtain protection under the Patent Law when it has fulfilled certain conditions. However, creative designs extend to advertisements, art works, costume designs, music, architecture, etc., and have a broader coverage than that of industrial design. The Creative Industry is based on creative designs. The development of Creative Industry is beneficial to the progress of the industrial design regime.

In view of laws and regulations, this report focuses more on substantive rules of industrial designs than procedural rules. The most important laws and regulations involved include the New Patent Law, the Rules for the Implementation of the New Patent Law, the Guidelines for Patent Examinations (2010 Revision) and some relevant interpretations by the Supreme People’s Court on patent disputes. 

Chapter II  Patent for Industrial Design in Chinese Creative Industry

This chapter mainly discusses about the following topics:

First, it offers the definition and content of Creative Industry. Creative Industry means activities which originate from personal creativity, skills and intelligence, and can create potential wealth and employment opportunities through the exploitation and application of intellectual properties. In China, it is generally considered to cover multiple industries, at least including media, art, industrial design, fashion design, architecture design, network information, software, consultation service, advertisement and exhibition, entertainment, etc. It is argued that Creative Industry is a brand new industry, breaking through the tradition classification of different industries. It is a redefinition of the traditional industries from the angle of industry inputs such as creativity and intelligence. Creative Industry is a perfect combination of culture and science.

Secondly, it focuses on the rapid development of Creative Industry. With the promotion of a series of policies, the scale of Chinese Creative Industry has largely expanded and gradually become the pillar of economic development in recent years. Meanwhile, more importance has been attached to the improvement of the quality of Creative Industry. The perfection of various supporting systems, such as the protection of intellectual properties, has ensured the Creative Industry works in a good order. Take Shanghai as an example. The Cultural and Creative Industry in Shanghai has developed in a rapid and steady manner for many years. The value added by the Industry in 2011 amounted to 192.37 billion RMB, with a 15.8% growth, which accounted for 10% of the total GDP of Shanghai. Taking the representative software industry and online game industry as an examples, these industries have developed rapidly and maintained huge potential for further progress and will definitely play an even more important role in the prosperity of the Creative Industry in the future.

Thirdly, it is related to industrial designs in the Creative Industry. The broad coverage of Creative Industry and Creative Design and their breakthrough of the traditional industries also challenged the definition of industrial design. Traditionally, an industrial design must be a design of the appearance of a product and must adapt itself to industrial application (duplicated by machines in industrial process). However, in a digital era, on one hand, “products” is no longer only restricted to those traditional commodities in physical or material forms, but also those in a virtual form existing in the environment of the Internet or in a service form. “Industry”, on the other hand, is also a broad concept. In the wave of the Third Industrial Revolution, the designs created and shown by computers and spread through the Internet can also fulfill the requirement of industrial application. Combined with the actual patent grant analysis, this chapter further separates those industrial designs patentable from the whole Creative Industry, including industrial designs, architectural and decorative design, images and charts displayed (GUIs, etc.), character (or equipment, etc.) image design in online games and animations, etc.

Chapter III A Scenario of Application, Grant and Validity of Patents for Industrial Design in China

In this chapter, a large amount of data has been collected and analyzed and some conclusions have been drawn. Subject to the accessibility of the information, some data has been updated to April 2013, while most of the rest has been updated to the year 2012 or 2011. In China, the number of application, grant and validity of industrial designs has been increasing in recent years. Even though the number of applications for industrial design both home and abroad is increasing, the domestic figure prevails over the foreign figure and the gap between them is getting larger. Regarding the regional distribution of industrial designs, the number of patents for industrial design varies from city to city due to the unbalanced economic development level. Four leading cities are selected for comparison, i.e., Beijing, Shanghai, Guangzhou and Shenzhen. The numbers of industrial design originated from these cities are growing annually at different speed. Shanghai leads the race of them. In terms of service or non-service industrial design, the service design is growing at a faster pace than the non-service design, with respect to application, grant and validity, and has surpassed the latter in the last few years. As for periods of examinations, even with the continuous growth of patent applications, all three kinds of patent including industrial design are in stable with a slight decline situation in recent years.  

Chapter IV  Recent Development of the System of Patent for Industrial Design in China

This chapter respectively summarized the New Patent Law, the Rules for the Implementation of the New Patent Law and the Guidelines for Examination and analyzed the reasons and significance of these revisions.

The New Patent Law is the third revision of the Patent Law. It was based on Chinese experiences for more than twenty years to protect the creation and innovation in the technical fields by patent system which it now prioritized in the necessities to promote further social and economic development in China and to solve many problems in practice by balancing protections for both domestic and foreign patent holders on one hand and the public interests on the other hand.

The New Patent Law has seventy-six articles with thirty-six article revised including ten related to industrial design. The main revisions for industrial design include the newly-incorporated definition of industrial design (Article 2.4), the confirmed principle to prohibit the so called double granting (Article 9), the new right of offer to sale (Article 11.2), the higher standard of grant (Article 23.2), the new situations to reject the application (Article 25.6), the modification of requirements for application (Article 27.2), the allowed joint application (Article 31.2), the clarified scope of protection for patented designs (Article 59.2), the extension of the application for report of patentable assessment (Article 61) and the new defense of existing design (Article 62).

Among the ten revised Articles, the newly-incorporated definition of industrial design and the confirmed principle of prohibiting double granting have already been stipulated in the 2002 Rules for the Implementation of the 2000 Patent Law. The revisions were aimed to codify the Rules as administrative regulations into the New Patent Law, which made the patent system more integrated at the legislative level.

Other revised Articles are formulated on the basis of practical experience and for the purposes of balancing the interests of patentees and public in China. For example, the higher standard of grant and the new situations to reject the application would facilitate application while reducing the burden of the Patent Office to examine unnecessary applications in order to improve quality of industrial design in China. It is the measure taken by clarifying the scope of protection and extending the application of report of patentable assessment to define the scope of the patent for industrial design and to facilitate the patent litigation efficiently. Considering the need to protect public interests, the revision provides a defense of existing design to promote implementation and utilization of the existing design in more efficient ways.

The 2010 Revisions of the Rules for the Implementation of the Patent Law in Respect of Industrial Design are mainly embodied in: the provision for patent right used as a pledge (Rule 14.3), the content of design applications (Rules 28-29), the priority provisions (Rules 30-33), the provisions for designs of products under the same category (Rules 34-35), the provisions for assessment reports on granted patent for industrial design (Rules 56-57) and the provisions for the reward and remuneration granted to inventors or creators of service inventions-creations (Rules 76-78).

The 2010 Revision of the Guidelines for Patent Examination was made to be in compliance with the New Patent Law and the 2010 Revision of Implementing Regulation, and prescribes more detailed and specific requirements accordingly. Key revisions include:

Chapter 3 of Part I (Preliminary examination of applications for design patents): the essential contents and elements of a brief description provided in section 4.3, the non-patentable situations for industrial design provided in section 7.4, the number and comparing methodology of similar industrial designs provided in section 9.1 and the broader definition of “products in set” provided in section 9.2, etc.

Chapter 5 of Part IV (Examination of requests for reexamination and for invalidation) has been substantially revised, mainly embodied in those provisions on the judging standards and methods that have been dispersedly indicated in the sections with respect to the standard of “identity or substantial identity” or standard of “significant distinction” in the 2010 version, rather than the standard of identity or similarity of designs in the 2006 version. The newly-added rules mainly lie in: firstly, under the standard of “substantial identity”: (1) the substitution of one design element as a whole by another common design element; (2) a repeated and continuous arrangement; and (3) a mutually mirror image of a design. Under the standard of “significant distinction”, the combination of the prior designs or the design features thereof and the transformation of the prior design shall be taken into consideration by the reviewers. The product bearing a prior design under some conditions is no longer limited to be in the identical or similar category to that of the product concerned. The methods of comparing the patent involved with a combination of two or more designs, or a combination of separate design elements and features from different designs, have been introduced to the new Guidelines, which means that the previous “one v. one” comparing method is no longer the only method to be applied in the examining process of design patents. Other important revisions to this chapter include increasing the authority of the patent reexamination board. For example, when the petitioner withdraws his request for invalidation, the Patent Reexamination Board may decide not to terminate the examination procedure under certain circumstances. Besides, The Board may also conduct examination not confined by the scope of requests raised by the parties at its discretion.

Chapter V A Cross-over Study on Patent for Industrial Design and Other Rights

One design can be granted different kinds of rights other than patent for industrial design, including copyright, trademark, unique name, package or decoration of a famous commodity if it meets the requirement stipulated in the relevant statutes. The multiple protections can be attributed to the intangible and statutory nature of IP itself. This chapter begins from a comparison of the pros and cons of different rights from the perspective of the right holders, so as to find the best solution to protect a design, regarding the term, cost and effectiveness of protection. With respect to the public interest, the multiple protections may aggravate the adverse monopolistic effect and deprive the public of the access to those rights. Therefore, this chapter suggests that a statute specially covering the overlap of these rights be made which limits scope of these rights.

In other situations where different kinds of rights are owned by different subjects, the prevailing principle is to protect the pre-existing right. The Patent Reexamination Board may declare a patent for industrial design invalid as applied, which conflicts with any prior right.

Chapter VI  A Comparative Study on Industrial Design Regimes

This chapter is a comparative study on industrial design regimes of the EU, Germany, the UK, Hong Kong, the US and Japan.

The EU part analyzes the general description of Community Design Regulation, the definition and requirement of authorization of industrial design, the classification of Registered Community Design, the term of protection and the character of unity in effect. Moreover, it refers to a recent case in European court to illustrate the standard of “individual character”.

The Germany part mainly introduces the general regime and mode of legislation of industrial design in Germany (that Germany adopts the dual protection of both copyright and patent for industrial design), the definition, authorization requirement and the object that is protected under Germany Industrial Design Act, as well as the term of protection. Concerning the authorization requirement, it stresses the element of “distinctiveness”, which is the most important change in Germany law. Compared with China, partial industrial design is protected in Germany and the concept of “complex products” is provided in German law. Two special regimes (the permission of revocation of industrial design and the decision of partial preservation of industrial design of industrial design) in German law are also specified in this part.

The UK part focuses on a case study of UK. First, it generally introduces the Creative Industries in the UK and emphasizes its importance in the national economy and governmental decision-makings. Then this part pertains to an overview of industrial designs in the UK IP system, including a comparison between China and the UK and a discussion on the dual protection issue of industrial designs.

The Hong Kong part focuses on the rapid development of the creative industries in Hong Kong and explores the reasons behind, such as market condition, administrative support and legal assurance etc. Then it makes a comparison of the IP regimes between mainland China and HK, especially in terms of design patent, copyright, etc.

The US part makes a comparison of the industrial design regimes between the US and China. Firstly, in terms of the legislative pattern for industrial design, both China and the US put the Patent Law in the first place, combined with other laws (Copyright Law/ Trademark Law/ Law Against-Unfair Competition) as complements. Secondly, by referring to the US statutes and some related cases, the report indicates some differences between the standards of granting patent for industrial design of the US and China. The most notable one is the invention requirement for the industrial design. The US emphasizes more on the invention or non-obviousness from the view of an ordinary designer, whereas China emphasizes the obvious distinction with the prior design from the angle of an ordinary consumer. Some other differences also exist as to the examination and the scope of the patent for industrial design. Thirdly, the tests for infringement upon the patent for industrial design are gradually converging. Both emphasize the essential status of the whole appearance from the view of an ordinary consumer. At last, considering the context of the Apple Inc. v. Samsung Electronics Co.Ltd.et al case, this part further analyses the patentability of GUIs and differences between the legal practices in China and the US.

The Japan part introduces the general description of legislation of industrial design in Japan and then describes the definition, conditions for authorization and the object that is protected in Japan. Concerning the object, it introduces partial industrial design and GUI design that are not protected in China’s patent law. Some other special regimes in Japan’s Industrial Design Act are also provided, including “one design one application” principle, the regime of reconfirmation the date of application and the regime of confidentiality of industrial design application. At last some implications are provided for China’s legislation and for Chinese applicant who is intended to apply for the patent of industrial design in Japan.

Chapter VII A Case Report of Patent for Industrial Design in China

This chapter is focused on enforcement of the New Patent Law including the administrative decision by the Patent Reexamination Board, the cases of litigation under administrative and civil procedures. Through case research and statistical analysis, this Chapter wants to create a general picture of the development trend of design patents, to find some new problems in practices, in particular, some errors that occurred in the application of laws and regulation by the Patent Reexamination Board and different courts, and even some flaws of the rules themselves and the inconsistency thereof.

First, the great efforts are made to calculate the total number of administrative decisions with respect to design patents in recent years and to do research on application of the relevant articles or rules in the review proceeding of invalidity. Following these researches, the report is focused on the application of Article 9.1 and Article 23.1, 23.2, 23.3 of the New Patent Law. It seems that the Title 8 of Part IV of Chapter V of the Guidelines regarding the application of Article 9.1 is not only unnecessary, but also inconsistent with other contents of the Guideline. Then, the report has the discussion on the new problems arisen from some cases such as the finding of substantial identity, the acquaintance of the consumers, the relationship between distinctions and substantial identities, the separated or overlapped applications of article 23.1 and 23.2 with respect to partial nuances, the authority prescribed in Article 23.2 to grant patent for industrial design and the standard under Article 23.3.

Secondly, this Chapter moves to the situations of administrative litigations during the period from 2008 to 2012. The total number of judgments is 202, among which, only 4 cases were decided under the New Patent Law. It appears that the time of extensive applications of the new law in administrative litigations has not yet occurred. More attentions are paid to the cognizance of “partial nuances” and “entire visual effects” in combination with certain cases. It is found that, considering the subjectivity of the concept or the standard itself, different examiners would probably reach different conclusions even if they are faced with quite similar facts.

Finally, the detailed researches are made on the infringement cases regarding industrial design in the cities of Shanghai and Beijing, the provinces of Jiangsu, Zhejiang and Guangdong. The total numbers of civil judgments, mediation and judicial orders are 472, 115 and 354 respectively. The judgments were classified according to their final conclusions or the reasons taken by the courts in favor either the plaintiff or the defendant. Among the 472 civil judgments with merit, almost 80% of them are favored for the plaintiff, which means that, generally speaking, the plaintiff is more likely to win infringement litigation with respect to design patents. It is also found that the reasons why the accusation of infringement could not be established as follows: (1) the patent involved is neither identical nor similar to the accused infringing design; (2) the defense of existing design is established; (3) there is no infringing act; (4) the patent involved has been declared invalid and is deemed to be non-existent from the beginning.

In the aforementioned civil cases of infringement, the report obtains the conclusion for some problems in practice: (1) the misapplication of laws; (2) the changes of the reviewing standards and methods; (3) the inconsistency between the reviewing standard under the judicial interpretations and the Guidelines; (4) the comparative objects under the defense of existing design; (5) two possible constructions of the “existing design” in the New Patent Law; (6) the determination of the amount of compensation; (7) the improper understanding of the inclusion relation between the reasonable expenditures and the determined amount of compensation; (8) the change in the subjects of litigation; (9) the proportion of infringements and non-infringements. 

Chapter VIII A Detailed Discussion about Industrial Design Protection of Electronic Products (Including GUIs)

Booming in the background of the development of information technology, electronic product is the most fast developing and dynamic kind of products in the market. Design of the appearance of the electronic product generates promising added-value because of the satisfaction of consumers’ pursuit of high quality. Therefore, it is necessary to analyze the scenario of electronic product designs to realize the general overview of design patent in China.

The research started from the International Classification for Industrial Designs (Locarno Classification) and focused on the patent grant scenario of various sub-classes including the changing patent grant numbers of some typical electronic products. This chapter intends to find the way the characteristics of design patents (essentials of designs) were embodied in different electronic products and further clarify the most potentially competitive product in the market and its underlying reasons.

The further analysis was made on the issues of pattern display and graphical user interface (GUIs) on the electronic product screen, and of patents granted in this regard so as to find the standards to examine this class of products for granting patent under the Chinese laws and regulations. Foreign legal regimes and their judicial practices regarding the industrial design protection of pattern display and GUIs shown on the screen of electronic product (the US and the EU as two representative examples) were reviewed. By analyzing the merits of both copyright and industrial design protection, this chapter finally reflected on China’s current denial to grant design patent to such subjects and proposed some legislative advice.

Chapter IX A Detailed Discussion about Industrial Design Protection of Derivative Products of Animation

The incomes from the derivative products of cartoon account for almost half of the incomes of the whole animation industry. However, owing to the high price but low cost of the derivative products, the infringements are rampant. In cases relating to the derivative products of animation, the right holders often instituted proceedings for infringement of industrial designs. But in some other cases, the right holders instead instituted proceedings for infringement of copyright. After a detailed analysis, this chapter views that the few examination requirements and the effective protection of industrial designs makes it the best way to protect the derivative products of animation.