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Beware the utilities

Utility model patents are simple, quick and cheap to file in China. They can also be used as a weapon against under-prepared foreign companies, for as long as 10 years.

Issue: May 2009

Keywords (click to search): IP intellectual property utility-model patent

By Phil Taylor.

US$23 million is a lot of money, and Schneider knows it more than most companies at the moment. The French business recently agreed to pay that amount to Chint Group to end a Chinese court battle over a utility model patent.

Utility models, under Chinese patent law, can be used to protect relatively simple products (not methods or designs): they refer to a technical solution relating to the shape or structure of a product that is "fit for practical use". They last for 10 years and are quick, easy and cheap to file, particularly as there is no substantive examination involved in the process.

Crucially for Schneider, utility model patents can only be invalidated if there is prior use in China. When the revised PRC Patent Law comes into force on October 1, this will change, although it is not clear whether the new rules will...


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