All versions of the patent examination guidelines have stated that insofar as they meet certain specific conditions, "inventions with omitted technical characteristics" can be deemed to possess an "inventive step" by "not being easy to accomplish." For example, Section 3.5.4.2 of the 2004 edition of the Examination Guidelines specifies that: "Inventions with omitted technical characteristics refer to those with certain prior art technical characteristics removed, such as an element of a product invention or a step of a process invention. If the invention with omitted technical characteristics still possesses all the original functions or produces unpredictable efficacy, such invention should be deemed not easy to accomplish and hence its inventive step should be recognized. If the invention with omitted technical characteristics loses all functions of such technical characteristics, said invention should be deemed to be easily completed and hence to lack an inventive step." Section 3.5.2.3 of the current Examination Guidelines maintains similar provisions.

 

In disputes on patent validity, although it is not uncommon for a patent holder to argue that the invention is one with "omitted technical characteristics" and therefore has an inventive step, such argument has rarely been accepted by the Intellectual Property Court (IP Court), and would typically result in denial of the inventive step of such invention. This practice has recently been questioned by the Supreme Administrative Court.

 

A patent holder claimed that the technical feature of the invention, which is entitled "A Processing Device for Transmission and Reception of Audio-Visual Signals," was its omission of the compression component in a conventional plug-in television card. In other words, the invented television card did not process signal compression. The patent holder argued that since the invention omitted technical characteristics of the prior art, it possesses an inventive step. However, the assertion was rejected by the IP Court in its Judgment No. 2012-Xing-Zhuan-Geng-(2)-3. According to the Court, an example set forth in the patent specification described that after the television card had transmitted the signal to the computer, the computer was still required to carry out the compression procedure in order for the computer to directly store or broadcast the audio-video signal; and hence the invented television card was unable to retain all the functions that had been present before omission. The court also held the view that the previous decisions of the Intellectual Property Office (IPO) as well as the precedent judgments of courts which confirmed the validity of the patent were the result of partial observation of the audio-visual signal transmission and reception device—the subject matter of the patent in question—without taking overall consideration of the circumstances after the signal had been transmitted to the computer.

 

In its decision on September 29, 2014 under Judgment No. 2014-Pan-533, the Supreme Administrative Court cast doubt on the IP Court for having on the one hand determined that the "computer" was not an element in the patent claims while on the other hand having relied on the "work carried out by the computer" as its basis for interpreting the claims of the patent. This was already in contravention of the principle of determining "scope of patent based on the claims." Furthermore, the Supreme Administrative Court stressed that when taking into account the descriptions in the specification and the drawings to interpret claims, one must observe the overall patent specification instead of focusing on the working examples only; working examples provided in the specification merely serve to illustrate implemental embodiments and cannot be used to expand or restrict the scope of the claims. Otherwise, the patent scope as published would be altered. The IP Court had, based on the computer-related descriptions in the example illustrated in the patent specification, determined that in the patent in question, the transmitted signal would still require a compression process before it could be stored or broadcast. By reason of the above, the IP Court had deemed that the invention did not meet the requirements for "omission of technical characteristics"; such viewpoint came from "use of the example to limit the scope of claims." The Supreme Administrative Court held that the IP Court's decision did not conform to the principles for claim interpretation.

 

It is worthy of note that although the Supreme Administrative Court is an arbiter of law and normally would not determine the factual issues involved, the Supreme Administrative Court, in a rare turn of events, held a contrasting technical understanding to the IP Court's main technical reasoning with respect to "omission of technical characteristics." As mentioned above, the IP Court deemed that the signal transmitted from the television card of the patent at issue would necessarily be compressed first so that the computer can broadcast it, and as a result concluded that the omission of compression process in the television card made it "unable to retain all the functions that had been present in a conventional television card." However, the Supreme Administrative Court adopted a different viewpoint on such technical fact; it pointed out that: "Generally speaking, any signal broadcast by the computer is one that does not require compression. If the received signal had been compressed, the computer would be required to 'decompress' (or more precisely, to 'decode') the signal before broadcasting it. For received signals that had not been compressed, the computer could directly broadcast them without performing any compression process. It is up to the user to decide how to use the computer; that is to say, the user can directly broadcast an uncompressed signal or compress it to store it."

 

It will be worth observing how the IP Court responds to the Supreme Administrative Court's contradicting view on technical facts since the former is staffed with technical examiners.