Should Hong Kong have an Original Grant Patent? Government Proposes Amendment to the Patent Law

The Hong Kong Government has issued a consultation paper seeking views on the Hong Kong patent system. The current patent system (re-registration of patents granted in Designated Patent Offices – Europe, Mainland China and the United Kingdom – together with unexamined short- term patent applications) has been generally accepted as user-friendly and cost-effective. However, the Government is concerned that the system meets the changing needs of Hong Kong's economy and its vision of developing Hong Kong into a regional innovation and technology hub.

The consultation paper asks for feedback on the following questions:

• Standard patents – Should Hong Kong have its own "original grant" (OGP) patent system? It is envisaged that, if introduced, a standard patent could be obtained directly from a Hong Kong application.
• Irrespective of whether Hong Kong has OGP, should the current "re-registration" system be maintained? If so, should the existing re-registration system be expanded to recognise patents granted by jurisdictions other than Europe, Mainland China and the United Kingdom?
• Short-term patents – Should the short-term patent system be retained as a supplement to the standard patent system? If the short-term patent system is maintained, how can the existing process be enhanced?
• Regulation of patent agency services – Should the provision of patent agency services in Hong Kong be regulated? If so, what is an appropriate form of regulation?

OGP

There are divergent views as to the merits of an OGP system for Hong Kong. Many applicants pursuing patent protection in Hong Kong are also likely to seek patent protection in other jurisdictions including major trading partners such as Europe and Mainland China.

Under the existing re-registration system, granted patents pursued in Hong Kong have a strong presumptive validity, in view of the relatively thorough and established examination conducted by the Designated Patent Offices.

As the grant of a Hong Kong patent right is based upon progression of corresponding applications, the additional time and cost involved in re-registering the patent in Hong Kong is relatively minimal. In fact, there is a significant saving compared to the cost that would be incurred if separate substantive examination were to be conducted in Hong Kong.

Critics of the re-registration system argue that the requirement of first obtaining a patent from a designated patent office is expensive and/or inconvenient for Hong Kong applicants, particularly for applicants who have limited resources, or who only wish to have a Hong Kong patent.

Similar concerns have been raised in relation the recent amendments to US Patents Act. In the Hong Kong context, the relatively limited usage of the short-term patent system raises the question of how many such applicants there are and whether there is sufficient critical mass to warrant a complete change in the existing system.

Another criticism of the existing re-registration system is that, since the substantive examination is done overseas, arguably this does not encourage the development of the patent agency business in Hong Kong or the local expertise necessary for the drafting and prosecution of patent applications. There is concern that this, in turn, leads to fewer work opportunities for local graduates with scientific and technical backgrounds.

If an OGP system is introduced, it could be introduced in conjunction with the current "re-registration" system. This would allow applicants the choice to apply directly in Hong Kong or through "re-registration", depending on market and operational needs. However, operating a parallel system will increase administrative and substantive workloads and will obviously entail extra cost. Inevitably, this will be passed on to users of the system.

If Hong Kong is to conduct independent substantive examination, this would require a large team of experienced examiners and comprehensive technical databases with up to date developments in the full range of scientific and technological fields. However, given the relative size of the market, it is unlikely that Hong Kong could provide a fully-fledged in-house examination capacity. Therefore, it is likely that substantive examination would need to be outsourced.

The Chinese Patent Office has been raised as a possible choice for outsourcing. However, historically, Hong Kong's patent law and experience is most similar in approach to established United Kingdom and Commonwealth precedents; whereas the Chinese legal and patent system is very different. Whilst using SIPO as an office for substantive examination may have its advantages if a Chinese language patent is involved, it does create some difficulty in determining how the validity of a patent in dispute will be assessed in Hong Kong.

Short-term patents

In Hong Kong, short-term patents cover the same range of inventions that may be protected by standard patents and may be obtained after filing a search report from an international searching authority. Importantly, there is no substantive examination of short-term patents prior to grant, which opens the short-term patent to potential abuse.

Supporters of the system feel that it offers a fast and inexpensive way of protecting simple inventions with a limited commercial life span. Many welcome the fact that Hong Kong covers a relatively wider range of inventions as compared with "petty patent" systems in other jurisdictions.

Critics of the system argue that as short-term patents are not substantively examined, patents that may actually be invalid and unenforceable, may remain on the register and deter others from using the technology covered by the patents.

To address this issue, the possibility of including substantive examination has been raised. This could be a pre-condition to the commencement of infringement proceedings. The draw back of requiring such pre-commencement substantive examination is increased costs and longer processing time, which reduces the attractiveness of the short-term patent system.

Other possible suggestions mentioned in the consultation paper are:

• Extending the maximum term of protection. However, this may prolong the period that a potentially invalid patent may remain on the register;
• Increasing the maximum number of allowed independent claims. Currently, each application for a short-term patent is limited to one independent claim. However, the system is meant to protect relatively simple inventions and allowing a large number of claims may exacerbate potential abuse of the system.
• Lowering the patentability criteria to enlarge the pool of inventions that may benefit from protection under the system. This would be aimed at giving small and medium sized enterprises added incentive to invest in research and development. Again, if there is a concern that there may be abuse of the system, then this may aggravate the situation.
• To discontinue the short-term patent system altogether. However, this could act as a disincentive to the development of products with a short commercial life span.

Regulation of patent agency services

Advice on the patentability of inventions and the drafting of patent claims and specifications requires specialised technical skills and knowledge. Many patent agents in active practice in Hong Kong are qualified in other jurisdictions such as the Australia, Europe, Mainland China, the United Kingdom or the United States. Currently, any person may practice as a patent agent in Hong Kong, which arguably gives free choice in hiring agents and promotes competition.

Critics say that with an unregulated profession, any person, whether they have the relevant technical or legal skills or not, can do patent work and there is less assurance of the quality of the services. There are suggestions that a regulatory regime will help to build a local patent profession and create job opportunities for local graduates.

The Hong Kong Government has asked for views on whether a regulatory regime should be dependent on whether an OGP system is introduced in Hong Kong. If a regime is to be introduced, should the provision of patent services be limited to people meeting certain qualifications or requirements only? Or should any person still be allowed to provide patent services and the restriction would only be as to the particular title used? For example, in the United Kingdom, anyone can advise on patent applications, but the use of terms such as "patent agent" or "patent attorney", are restricted.

It is clear that there are differences in opinion within the Hong Kong patent profession and trying to reconcile so many competing interests will not be an easy task. The consultation period ends on 31 December 2011.

Chris Britton, the Head of Deacons' IP Department, has been appointed by The Secretary for Commerce and Economic Development (SCED) to the Advisory Committee on Review of the Patent System in Hong Kong. The Committee will advise the SCED on:

• how the Administration should position Hong Kong's patent system, having regard to the issues outlined in the consultation paper and the responses received; and
• how best to implement changes to the system.

Key Contacts

Charmaine Koo

Consultant | Intellectual Property

Email or call +852 2825 9300