Business Methods and Software-related Inventions can be Patented in China

Since April 1, 2017, business methods and software-related inventions are eligible for patent protection in China. What does this change mean for the business? Furthermore, how would it change innovation landscape and business environment? 


"Internet companies who have hardware and software as their products, as well as hardware manufacturers with innovative business methods, are expected to seize the opportunity and obtain intellectual property rights to protect their innovations." Prof. Can Huang, Co-Director of Institute for Intellectual Property Management (IIPM) at School of Management, Zhejiang University told JMedia. 


The State Intellectual Property Office of China (SIPO) revised its current Patent Examination Guidelines, which come into effect on April 1, 2017.


Prof. Can Huang thinks that it enables a number of innovative companies in internet industry who perform well in the market to better protect their new business model by patents. For example, some existing bike-sharing start-ups, such as Mobike and ofo, can make full use of their unique business model innovation which is based on technical innovations, to achieve sustainable growth. 


In addition, for computer program inventions, the new Guidelines state that the apparatus “may comprise not only hardware but also computer programs”, which extends the previous limited protection on "only hardware". 


Prof. Can Huang believes that revision of the Guidelines after it was announced seven years ago has considerable practical significance. "Although currently China receives the largest volume of patent filing than any other countries do and ranks the top five in terms of PCT (Patent Cooperation Treaty) applications, China’s intellectual property development is still facing severe challenges." He argued that for Chinese companies, improvement of intellectual property management capabilities will be the key in the next stage of development. 

"Over the past decade, the number of China’s patent filings has been increasing stably, and often grows at an annual rate of nearly 30%. We can see that China’s intellectual property system is developing rapidly." Prof. Can Huang summarized the long-term trend. “The recent revision of the Guidelines should have positive impact on innovation activities in China.”

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