China Patent Eligibility Update: Human Embryonic Stem Cells

On September 23, 2019, China National Intellectual Property Administration (“CNIPA”) announced its proposed amendments to China’s Guideline on Patent Examination (the “Guideline”), which is the counterpart of the Manual of Patent Examining Procedure in the U.S.  The proposed amendments will become effective November 1, 2019.

The current Guideline explicitly provides that “human embryonic stem cells and the methods of preparing them are patent-ineligible inventions in accordance with Article 5(1) of the Patent Law.” The Guideline, as amended, has removed this categorical exclusion, and instructs patent examiners in China that they cannot refuse to grant patent rights by reason of “contravening social morality” with respect to inventions on “isolating or obtaining stem cells using human embryos within fourteen (14) days after fertilization that have not been developed in vivo.” 

Article 5(1) of China’s Patent Law provides that “[n]o patent shall be granted for an invention that contravenes any law or social morality or that is detrimental to public interests.” This provision is in accordance with Article 27.2 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, which permits WTO members to “exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.”  Similar exclusions based on ordre public or morality can be found in Article 53(a) of the European Patent Convention.

Whether an invention contravenes social morality is subject to preliminary examination under China’s Patent Law.  This means that patent examiners in China can reject an application based on contravention of social morality even before substantive examination.  This is particularly important in cases where substantive examination is not provided under the Patent Law, i.e., utility model patents and design patents in China.  Although these types of patent applications are not substantively examined, they can nevertheless be rejected based on Article 5(1) of the Chinese Patent Law.  For example, obscene designs are not patent-eligible in China.

Article 5(1) also provides a basis for rejecting a Chinese patent application during substantive examination, and for invalidating a Chinese patent claim.  Therefore, passing the preliminary examination or even obtaining an issued patent is no guarantee that CNIPA will not come back to reject a patent application or invalidate an issued patent for contravention of social morality.

An obvious example of inventions contravening social morality in the life sciences industry is methods of human cloning.  Other inventions explicitly prohibited from being patent-eligible under the Guideline for contravention of social morality include “human bodies, regardless of the stages of formation and development, including human germ cells, oosperms, embryos and entire human bodies.”  To accommodate the proposed amendment related to human embryonic stem cells, the Guideline, as amended, states explicitly that “human embryonic stem cells are not human bodies at any stage of formation or development.”

Unlike in the United States, where patent eligibility or the lack thereof is frequently the subject of heated legal battles and often subject to judicially crafted tests, China’s primary approach to this issue has been administrative.  Even though the Guideline supposedly only binds patent examiners, we can expect that the Patent Reexamination Board of CNIPA (“PRB”), which is the venue where patents can be invalidated in China, will take a position consistent with the Guideline.  PRB decisions of validity or invalidity are of course, subject to judicial appeal and review, but when it comes to issues related to contravention of social morality, it is also unlikely that Chinese courts will take a different position from that of the Guideline.