On November 3, 2023, the China National Intellectual Property Administration (CNIPA) released its "Guidelines for Determining the Eligible Subject Matter for Utility Model Patents" (the "Guidelines"), delineating the boundaries for what qualifies as protectable subject matter under utility model patents.

Under the Chinese Patent Law, there are three patent categories: inventions, utility models, and designs. Utility model patents are granted for novel technical solutions related to the shape, structure, or their combination in products. Although these patents do not extend to processes and have a shorter protection span of ten years compared to invention patents, they are processed more quickly, often issued within six months, and do not require substantive examination. Utility model patents are highly favored amongst Chinese enterprises, leading to a surge in filings. However, this surge has been accompanied by the emergence of "junk patents," characterized by their broad and sometimes unjustifiable scopes, which complicate Freedom to Operate (FTO) evaluations for businesses.

The ambiguity surrounding what exactly is considered eligible subject matter for utility model patents has been a contentious issue. Utility model patents aim to protect the structural and shape-related attributes of products, yet many extend into areas like formulations, parameters, and software-implemented steps, often lacking clear standards for eligibility. Moreover, during patent invalidation proceedings, the examination has historically centered on novelty and inventiveness rather than eligibility, resulting in the upholding of utility models that, in essence, cover areas like formulas and software improvements.

The Guidelines provide a wealth of concrete examples to clarify the eligibility of an applicant's technical improvements for utility model patent protection.

When it comes to product claims that include method features, it is permissible to use established method names to define a product's shape and structure, such as connections made through conventional techniques like welding or thermo-compression. However, claims that propose enhancements to the methods themselves—such as refinements to production steps or technological processes—are not covered under utility model patent protection. Claims that encompass both method improvements and a product's tangible characteristics are also deemed ineligible.

One illustrative case involves a degradable, antibacterial film cover for food preservation. The claim details not only the cover's physical attributes—constructed from a biodegradable material with an elastic closure—but also an improved antibacterial treatment process designed to strengthen the bond between the antimicrobial agent and the film, thereby ensuring lasting antibacterial action. Such a claim does not have an eligible subject matter for the utility model since it fundamentally pertains to a method improvement.

The Guidelines also specify the treatment of product claims involving computer programs. Claims that reference established computer program names may qualify for utility model patent protection. However, a claim will not be eligible for utility model patent protection if it encompasses improvement to both hardware and computer program.

Take, for instance, a claim for a self-regulating traffic light control system featuring a central unit interfacing with input devices, manual overrides, and advanced inductive loop detectors. The system's key innovation is its ability to autonomously modify vehicle release timings and sequences based on real-time assessments of vehicle queue lengths. Central to this system is a non-precedent computer program within the control unit that processes vehicle detection data to determine queue lengths and adjust timings accordingly. If this computer program is novel, the claim, which includes improvements to the computer program, is ineligible for utility model patent protection.

The Guidelines address artificial layout planning, typically associated with the deliberate organization of spaces like building sites, driven by human needs and reliant on artificial rules and methods for optimization. As these applications hinge on enhancements to human-imposed schematics to achieve technical solutions, they do not align with the criteria set out in the patent examination guidelines, which focus on product-related shape and structural advancements. Consequently, they are excluded from utility model patent protection. For example, a claim for a traffic intersection managed by signal control and designed with specialized lanes to enhance flow capacity is based on the artificial segmentation of lanes, underscoring its nature as an improvement in layout planning and thus disqualifying it as eligible subject matter.

The Guidelines also make clear that certain amendments as made during the prosecution can not resolve the underlying ineligibility for utility model patent subject matter. Attempts to rectify the issue through claim deletion, consolidation, or specification amendment are unlikely to be successful.

The introduction of the Guidelines is poised to improve the quality of utility model patents. It also enables the public to accurately evaluate the stability of existing utility model patents, alleviating the issue of an overabundance of such patents.