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The Value of Design Patents in Greater China Area



I. Design Patents Are an Important Part of an IP Portfolio.
 
Unlike invention or utility model patents, which protect an innovation of technical concept, design patents protect the outer appearance (design) of a product or part thereof. A design is constituted of shape(s), pattern(s), color(s) and combination(s) thereof. A product may involve both (1) technical innovation and (2) creative design, and an applicant can strategically seek protection for both aspects by filing an invention/utility model patent application(s) as well as a design patent application(s). An IP portfolio including design patents is comparatively comprehensive and provides greater leverage in IP enforcement and licensing.
 
In Taiwan and China, design patents are misunderstood, undervalued and rarely used to their potential. For example, given the prevalence of consumer products as subject matter for design patents, there is a misunderstanding that an internal component of a product is not a patentable subject matter for a design patent. In fact, as long as the component is viewable any time during its life time, such as by a purchasing agent before installation into the final product, its design is patentable subject matter, and once it is patented, such a design patent can be used against an infringer.
 
Furthermore, in Taiwan, a broader scope can be protected by claiming only a portion of a product. It is anticipated that such partial design patents will soon be accepted in China as well, which is in the process of amending its patent law to this effect. Furthermore, graphical user interfaces (GUIs) and icons are patentable design subject matter in Taiwan. In China, a GUI is also patentable subject matter if claimed in conjunction with a device on which said GUI is shown.
 
II. Filing Design Patent Applications Is Cost Effective
 
A court finding of infringementof a design patent, just like an invention or utility model patent, entitles the patent holder to exclude unlicensed parties from manufacturing, selling, offering to sell, importing and/or using the infringing products. Calculation of damages for design patent infringement is basically the same as for invention or utility model patents. In several design patent infringement cases we handled, significant damages were awarded. However, the cost of filing and maintaining a design patent is much lower than that for an invention or utility model patent (generally around a third or a quarter of the cost). This makes design patents a particularly attractive choice for IP protection where costs are a major concern.
 
Even though the current term of a design patent in Taiwan and China is shorter than the twenty year term for an invention patent, the difference will be reduced in the near future. China is becoming a member of the Hague Agreement and is amending its patent law to extend the term of a design patent would from ten years to fifteen years. The Taiwan Intellectual Property Office (TIPO) has also expressed its intention to initiate amendments to the Taiwan patent law to extend the term of a design patent from twelve years to fifteen years.
 
III. Enforcing Design Patents Is Advantageous
 
Under both China and Taiwan practices, a court should find design patent infringement if (1) the classification of an accused product is the same as or similar to that of the product embodying the claimed design, and (2) the design embodied in the accused product is the same as or similar to that of the claimed design, unless there is any valid legal defense such as invalidity of the claimed design or prosecution history estoppels. Thus, design patent infringement analysis does not involve complicated technical issues as typically are involved in invention/utility model patent infringement analysis. As a result, litigation cost and time for a design patent infringement case are generally much less than for an invention/utility model patent infringement case.
 
According to statistics released by the Taiwan IP court, the chance of success for design patentees is higher than for invention or utility model patentees. Furthermore, according to the amended Patent Infringement Assessment Guidelines issued on February 2016 by the Taiwan Intellectual Property Office, the only test for design patent infringement in Taiwan is the so-called modified ordinary observer test: whether in the eyes of an ordinary customer who is reasonably familiar with similar prior art, the overall appearance of a claimed design is the same as or similar to that of an accused product. One of the previous tests, the "point of novelty" test provided in the old Guidelines, is abolished. Such new practice is generally favorable to design patentees.   
 

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