1.11.
Nevertheless, there are constraints on innovation; the small size and limited resources of the majority of local manufacturers, the fact that local manufacturing is, in the main, contract manufacturing and that sub-contracting to China enables Hong Kong to produce competitively priced, simple products by labour-intensive methods (paragraphs 7.13, 7.14, 7.16).
1.12.
The limited use made of the existing patent system is explained also by the short commercial life of the typical Hong Kong product. A patent is of little use if the time taken to obtain it is longer than the commercial life of the product to be protected. This is the rationale of our proposal for a petty patents system to operate in addition to a system for full patents (paragraph 11.1).
1.13.
Where the population, and therefore the number of likely inventors, is small, where there are constraints on innovation in manufacturing and where the typical product does not require the protection given by a patent, there is no reason to think that there will be a sufficient demand for patent protection to support a system that relies on examination and original grant being done in Hong Kong.
Ways of granting an examined patent in Hong Kong
1.14.
The option to establish a system of original grant of patents with full search and examination in Hong Kong is investigated at length in the report (paragraphs 4.18 to 4.46). The small number of patent applications and the high cost of establishing a technical information centre and of staffing the patent office to conduct search and examination makes this option untenable, even if staff with the necessary qualifications and expertise in all fields of technology could be recruited (paragraphs 9.23 to 9.26).
1.15.
Other ways of achieving the grant of an examined patent are considered (paragraphs 4.47 to 4.58). Contracting out the work of search and examination of patent applications to a suitable examining authority is unlikely to prove satisfactory as a permanent arrangement (paragraph 9.27). Although the work of examination would be contracted out, skilled examiners would still be needed in Hong Kong to evaluate the results of the examination and to decide whether the patent should be granted with or without amendment (paragraph 4.51).
1.16.
Similarly, there would be a need for skilled examiners in Hong Kong if a patent application under the Patent Co-operation Treaty (PCT) were used to obtain an international search and preliminary examination as the basis on which a patent could be granted in Hong Kong (paragraphs 4.55 to 4.58, 9.25).
1.17.
A patent system in which patents are granted without a prior search and examination for validity (non-examination system) does not require a staff of skilled examiners. However, that advantage is outweighed by the disadvantages. A non-examination system leaves open the question of whether the invention is patentable and the claims valid until such time as the patent is litigated in the courts. Patent litigation is expensive, difficult and time consuming. Adjudicating unexamined patents will make additional demands on judicial time. Many businesses will find it prohibitive to challenge a patent. Invalid patents on the register may deter trade (paragraphs 4.5 to 4.13).
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