Utility Models: Foreign Oddity or Valuable Addition to Your IP Portfolio?

This article was included in our Spring/Summer 2012 edition of Inside IP magazine.

In the UK, we have a number of registered rights for the protection of intellectual property (IP), particularly patents, trade marks and registered designs.  However, a further form of IP protection that is less well known to UK businesses is available in many countries outside the UK – utility models.

The scope, duration, protectable subject matter, and many other factors vary from country to country and, although it is not possible to provide a detailed analysis of every county’s utility model provisions in this article, we can provide a brief guide to this lesser known tool for protection of your IP.

What Are They and What Do They Protect?

In general, a utility model provides protection for similar subject matter to a patent and provides similar remedies for infringement.  They are known under various different terms such as innovation patent, utility certificate, short-term patent, small patent and, to a lesser degree nowadays, petty patent.  However, there are a number of key differences between patents and utility models, and these are summarised below.

Where Can I Get One?

Utility models are available in a number of European countries including Austria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Poland, Portugal and Spain.  Utility models are also available in many countries outside Europe including Argentina, Australia, Brazil, Chile, China, Indonesia, Japan, Malaysia, Mexico, Philippines, Republic of Korea, Russia, Taiwan, Turkey andUkraine.  Over 60 countries worldwide provide for utility model protection.

Duration

Utility models have a shorter duration than patents, with terms generally ranging from 6 – 10 years, depending on the jurisdiction.

Requirements for Grant

Patent applications in almost all jurisdictions undergo a strict examination process for novelty and inventive step in light of prior art before a patent is granted.

Utility Models must be new to be valid, which means they must not form part of the state of the art.  However, what counts as the “state of the art” for utility models is often more limited than for patents.  For example, for German utility models, prior public use outside Germany does not count, nor does any prior oral disclosure.  In addition, a 6-month grace period exists in Germany prior to the filing date within which any disclosure by the applicant is not relevant for the validity of the subsequently filed utility model.

In Spain, a “relative” novelty standard applies, meaning that the “state of the art” only extends to prior disclosures within Spain.

As well as a more lenient novelty requirement, the standard for inventive step is often much reduced, or is absent entirely.  This means that utility models can often be obtained for innovations which are only subtly different to known technology and which may not necessarily meet the strict criteria for patentability.

Although there are requirements for a utility model to be valid, the majority of countries that provide utility models do not examine them for such substantive issues; they usually proceed through to grant provided that some basic formality requirements are met.  The absence of substantive examination means that obtaining grant of a utility model is much simpler and quicker than for patents, usually a matter of only a few months rather than years.  However, many jurisdictions (e.g. Australia, Japan) require the registered utility model to be examined before it can be enforced.  Although in Germany this isn’t a prerequisite for enforcement, it can be requested at any time by either the right holder or a third party.

Protectable Subject Matter

Utility models are often only available for a limited range of subject matter compared to patents.  For example, some countries (e.g. Germany, Japan, Russia, Korea, China) do not allow method claims in utility models.  In addition, chemical compositions or biotechnological inventions are commonly excluded from protection by utility models.

Filing Options

Aside from simply filing an application directly, a utility model can often be obtained from an international PCT patent application.  Generally, a national patent may not co-exist for the same subject matter as a utility model, with the notable exceptions of Germany, France and Italy.

In addition to the direct or PCT filing route, a utility models can often be obtained by conversion from a pending national patent application.  This can be a good option if the prior art is sufficiently relevant to prevent the grant of a patent.

What Are the Benefits?

Due to the absence of substantive examination, utility models are quick and cheap to obtain, providing a more cost-effective form of IP protection than a patent.  Also, the speed of grant can be beneficial if urgent enforcement is required, and utility models commonly provide the same relief for infringement as a patent such as damages, destruction of infringing products and injunctions. They can also be used to enforce customs seizures which, combined with their speed of grant, has meant utility models have become popular tackling the problem of import of counterfeit goods from east Asia.

Utility models may serve as a basis of a priority claim for a later patent application and so are useful for cheaply and quickly obtaining a priority date for such later filings.

Since the requirements for a valid utility model are less stringent than those for a patent, a utility model may be useful when a patent is simply not available, for example if the prior art is relevant enough that there is not sufficient inventive step for grant of a patent or if the inventor has already disclosed the invention before filing a patent application.

The particular properties of utility models can render them useful strategic tools in litigation.  For example, in Germany where a patent and a utility model may exist in parallel, it is common to quickly obtain grant of a utility model to initiate litigation early while the patent application is still pending, and then to commence proceedings based on the granted patent later on.

Recent Trends

Statistics from the World Intellectual Property Office (WIPO) on global utility model filings and grants show that this form of IP protection is steadily increasing in popularity.  For example:

- 407,000 utility models were granted worldwide in 2010, representing a 54% increase over 2009 (see graph below)

- The bulk of the increase in filings/grants is accounted for by China, in which applications increased from 51,000 in 1998 to almost 410,000 in 2010.

- Four-fifths of the world total utility model filings/grants are Chinese utility models (see graph above for top 10 countries by number of applications)

- Utility models remain a form of protection used mainly by resident applicants – globally, 98% of utility model applications were by resident applicants.

The fact that China has seen such dramatic increase in utility model filings recently is somewhat inevitable due to the ever-growing power of the Chinese economy and refinements of its legal system.  However, the fact that such a high proportion of Chinese utility models are filed by resident applicants shows how this form of economical IP protection is particularly suitable to their domestic industry, particularly the manufacturing industry, but also to more incrementally progressive technology, where patents may be too expensive, too slow to grant, and possibly too difficult to obtain.

It can be seen from the above that there are numerous benefits to obtaining utility model protection where available and these benefits are being increasingly recognised by applicants worldwide.  Although utility models may not be available in the UK, when considering your European or worldwide IP portfolio, this form of protection may well be worth bearing in mind.

Alex Brown 25 May 2012

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