Thomson Reuters recently released a study entitled “Patented in China II: The Present and Future State of Innovation in China”, which predicts that China is poised to become a global patent power in terms of volume in the near future.
According to the Thomson report, patent filings in China are on pace to surpass those in Japan and the United States by 2011. Looking at the period between 2003 and 2009, China’s patent volume witnessed an annual growth rate of 26.1%, compared to 5.5% for the U.S. Part of this growth can be attributed to China’s transition from an agriculture-centralized economy to one focused more on technology and innovation. In recent years, domestic applications outnumbered applications from foreign entities by over 2 to 1, and that trend looks to continue into the future.
However, this incredible growth must be taken with a grain of salt. The Chinese government and domestic corporations offer many incentives to local applicants, leading many to question the quality of the applications being filed there. The Economist recently published an article commenting on China’s patent filing incentives and its effects in the State Intellectual Property Office of the People’s Republic of China (SIPO). Rewards, such as university tenure, cash bonuses for applicants and corporate income tax cuts, certainly encourage the filing of applications regardless of an invention’s underlying quality or value.
Furthermore, SIPO also accepts utility-model applications, which need only meet certain formal requirements and confer 10 years of protection instead of the typical 20 years. Utility-model filings in China have skyrocketed in recent years and their numbers now equal that of normal patent applications.
So although the number of China patent applications filed appears very impressive on its face, there is much skepticism as to whether the corresponding inventions would be patentable in other jurisdictions.
However, one should not discount China as a patent destination. Many applicants recognize that China has taken steps to improve their IP laws and enforcement. That, along with China’s vast market potential, creates a jurisdiction that cannot be ignored by foreign interests. Just last year, inovia filed more PCT applications into China on behalf of our clients than any other country.