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On October 27, 2016, the State Intellectual Property Office (SIPO) published a Draft of Revisions to the Patent Examination Guidelines that would appear to reduce the barrier to software and business method patents in China. The draft has been published for public consultation and comments can be submitted by 27th November 2016.

 Article 25(2) of the Patent Law of the People’s Republic of China states that patent rights shall not be granted for rules and methods for intellectual activities. This section of Article 25 is often used as a basis for rejecting computer implemented business method patents.

 The proposed amended guidelines provide two paragraphs of relevance to software and business method patents.

 Claims related to business methods that contain both business rules and methods and technical characteristics, shall not be excluded from the possibilities of obtaining patent rights be Article 25 of the Patent Law.”

 In the second line of Part II, chapter IX, section 5.2, paragraph 1, the third sentence of the Patent Examination Guidelines are amended from, “and describe in detail which parts of the computer program are to be performed and how to perform them” to provide that “The components may not only include hardware, but may also include programs.”

 The first paragraph would appear to provide clear guidance to examiners that so long as the claims include technical features then the claims should not be rejected under Article 25(2) as a mere rule or method for intellectual activity. This appears to set a very low standard for allowable subject matter, particularly when compared to the US Alice I standard.

 The second paragraph appears to strengthen the applicants position for software inventions by allowing the software components to be considered equally to hardware components.

 When these two paragraphs are considered together in light of the current practice of SIPO, it would appear that the already lenient position of SIPO to patent eligible software and business methods is likely to move even further in favour of applicants. Companies generating software and business method inventions should therefore consider grasping the opportunities available to them in China.

Thanks to John Collins, Schwegman, Lundberg & Woessner, P.A.

Principal & Chief Innovation Officer

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