In a report on SIIA.net, Mark McCarthy describes the potential for major NPE activity in China, particularly due to the China’s laws regarding utility patents:
“The threshold of inventiveness is lower for utility model patents. As compared to prior art, an invention patent has “prominent substantive features and represents a notable progress;” while a utility model patent merely has “substantive features and represents progress.” As a result it is more difficult to invalidate a questionable utility model patent. And there is no mandatory examination upon filing an infringement action.
The utility models are issued without substantive examination typically in under 6 months (3 months is the target) Utility models are 20% cheaper than invention patents to obtain.
Because of these attractive features utility model patents are growing quickly. Most of these are owned by Chinese individuals.”
And, note this ominous part: “The situation is ripe for abuse. Since 2008, well-known non-practicing entities have begun to establish a presence in China. It is only a matter of time before the patent troll problem burst out there and by then it will be too late to prevent the damage these.”
Please go to this link for the entire post (and the “patent cockroach” reference: http://www.siia.net/blog/index.php/2012/09/chinas-utility-model-patent-system-a-perfect-storm-for-patent-trolls/