Utility Models: A Strategic Tool for Global IP Protection

Among the most underused yet highly effective IP protection tools available is the utility model—an alternative form of IP right that offers faster, cheaper, and often strategically complementary protection to patents.

What Is a Utility Model?

A utility model (sometimes called a ‘petty patent’) is a registered right available in over 70 jurisdictions, including China, Germany, Japan, South Korea, Taiwan, and France. It protects inventions that may not meet the high inventive threshold of patents—but are still new, technically valuable and commercially important.

FeaturePatentUtility Model
Protection Term20 yearsTypically 6–10 years
Examination ProcessSubstantive examination of at least the 3 major patentability requirements: novelty, inventive step, utilityNo substantive examination
Time to Grant2–5 yearsUsually <1 year
Legal CostsHigh (office actions, etc.)Low (minimal prosecution)
Subject Matter LimitsNo limits except those imposed by lawIn some countries, utility models protect the same technologies as patents. In other countries, utility model protection is eligible only for the structure of products in certain fields of technology, such as mechanical devices and apparatus, but not for technical, chemical and biological processes. Eligible subject matter for utility models varies significantly from one country to another.

When Should You Consider Utility Models?

1. When Speed Matters

In countries like China, utility models can be granted in under 12 months, offering fast market entry and deterrence against copycats while patent applications are still pending.

2. When Budgets Are Tight

Filing and maintaining a utility model is significantly cheaper than prosecuting a patent. In a five-country filing scenario, utility models can save up to $40,000 per patent family by avoiding multi-stage office action responses.

3. When the Invention Is Incremental

Some innovations, especially product improvements—may not meet a patent’s inventive step threshold but are still protectable via utility models. In China, for instance, utility models require “substantive features” that “represent progress,” a lower bar than “considerable progress” required for patents (Article 22, Patent Law of PRC).

4. For Complementary Protection

Several countries (e.g., Germany and China) allow simultaneous filing of patents and utility models for the same invention. The utility model grants quickly, while the patent is pending, offering short- and long-term coverage. In China, if both rights are granted, one must be eventually abandoned to avoid double patenting.

Real-World Impact: Chint v. Schneider

Utility models are not merely theoretical. In a notable case in China, in 2006, Chint Group Corp., a leading Chinese manufacturer of low-voltage electrical equipment, filed a lawsuit against Schneider Electric Low Voltage (Tianjin) Co., Ltd., a subsidiary of the French multinational Schneider Electric, alleging infringement of its utility model patent. 

The Wenzhou Intermediate People’s Court ruled in favor of Chint in 2007, awarding damages of RMB 334 million (approximately USD $49 million), marking the largest patent infringement award in China at that time.

Schneider Electric appealed the decision, but in April 2009, the Zhejiang High People’s Court announced that both parties had reached a settlement. Under the agreement, Schneider Electric agreed to pay Chint RMB 157.5 million (approximately USD $23 million), about half of the original award. This case highlighted the potential strength and enforceability of utility model patents in China, challenging the perception that they offer weaker protection compared to invention patents.

This case remains one of the highest IP verdicts in China and underscores the potential enforcement power of utility models—even those obtained without examination.

Conclusion: Utility Models in Today’s IP Strategy

Utility models are a powerful, cost-effective IP tool—especially in countries where innovation cycles are fast and enforcement can be swift. For companies expanding globally, developing products rapidly, or seeking a layered IP strategy, utility models are a substantial IP tool to consider.

References

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