The Three-Step Method and Other Factors in Inventiveness Analyses

Release time:2022-11-25 Reprinted from: Reading volume:

In this issue, we briefly discuss a 2021 patent invalidation case, in which the Supreme People's Court clarifies how inventiveness analyses, using the Three-Step Method1 and considering Other Factors (similar to Secondary Considerations in U.S. practice), should be conducted. 

The following is a literal translation of the Supreme Court's own headnote for the case in the court's publication announcing the case as one of 48 Exemplary IP Cases of 2021.

The Three-Step Method, widely used in inventiveness determination, is a universally applicable logical deduction method; whereas an inventiveness analysis based on direct evidences such as solving long-time technical problem, overcoming technical bias, achieving unexpected technical results, and obtaining commercial success, is a method of empirical presumption. Both are analytical tools in determination of inventiveness. When a technical solution is determined to possess inventiveness by the Three-Step Method, it is usually unnecessary to further examine any direct evidence. On the other hand, when it is determined that a technical solution does not possess inventiveness by the Three-Step Method, it is necessary to further examine the direct evidences, repeat the Three-Step Method analyses based on empirical presumptions established from the evidences, and make a determination based on comprehensive considerations of the conclusions by both the logical deduction and empirical presumption.

The case originates from separate invalidation requests filed by Alibaba, Apple China, and Industrial and Commercial Bank of China against a patent related to “A Multi-Element Confidence Matching System and Method,” owned by Never Patent Museum LLC, a U.S. company. The patent was declared invalid by the then Patent Reexamination Board (PRB) of the SIPO. The patentee appealed, first to the Beijing IP Court and then to the Supreme Court, both of which affirmed.

A key issue of the case relates to inventiveness. In this regard, the PRB, after identifying the closest prior art and the distinct features of the claimed invention, states that, combining the closest prior art reference and common knowledge, the claimed invention is obvious. This is a common practice by many Chinese examiners in that a general Three-Step Method analysis is conducted, in which the distinct features of the claimed invention, as compared to the closet prior art, are asserted as common knowledge.

The patentee appealed the decision to the Beijing IP Court, which affirmed. In the final appeal, the Supreme Court agreed with the decisions by the PRB and the Beijing IP Court because, as stated by the court, the patentee, while asserting unexpected technical results, did not provide any evidence or identify any disclosure in the specification to that effect. Significantly, the court also used the opportunity to clarify how inventiveness analyses should be conducted.

As indicated in the above headnote, the Supreme Court states that a two-pronged analytical approach should be used in the determination of inventiveness: (I) The always applicable Three-Step Method (TSM); and (II) The sometimes applied Empirical Presumption Method. According to the court, the TSM is the dominant prong and should be always or universally applied in inventiveness analyses. A finding of inventiveness by the TSM is usually conclusive; and the inventiveness analyses should go no further. On the other hand, a finding of non-inventiveness by the TSM should prompt the analyses to the second prong, an empirical presumption method based on available evidences.

According to the court, when the second prong is involved, the final determination should be made by repeating the TSM analyses based on empirical presumptions established from the evidences, and comprehensively considering the conclusions by both the logical deduction and empirical presumption. In this regard, the court elaborates that, in repeating the TSM logical deduction, different emphasis should be made according to the nature of the direct evidences. For example, if the evidences are related to solving long-time technical problem, overcoming technical bias, or obtaining commercial success, the TSM logical deduction should focus more on whether enough consideration has been given to the stage and limitations of technological development, such that the teachings of the combined prior art were misjudged. On the other hand, if the evidences are related to unexpected technical results, the TSM should emphasize on whether the technical effects of the distinct technical features were misidentified, such that the technical problem solved by the technical solution was mischaracterized. 

We note that the analytical approach announced by the Supreme Court is not principally different from the current practice, as, for example, the Patent Examination Guidelines specifically identify the four types of direct evidences mentioned above as factors that should be considered in inventiveness analyses. However, we think that the court's clarification on this issue, especially regarding the relationship between the TSM logical deduction and the empirical presumption based on the evidences, is important and helpful. We hope that the Supreme Court's guidelines in the case will make inventiveness analyses and arguments more streamlined, more focused, and clearer in the future.

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1 In Chinese practice, the Three-Step Method generally consists: (1) Determining the closest prior art; (2) Determining the distinguishing features of, and the technical problem solved by, the claimed invention; and (3) Determining whether the claimed invention, compared to the prior art, is obvious to a person of ordinary skill in the art.

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