Abstract
This chapter looks at trends in Chinese patent quantity as well as Chinese patent “quality”, which is one way to measure the extent to which patents reflect innovation. The role of the Chinese state in influencing patent quantity and quality is also explored.
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Notes
- 1.
- 2.
- 3.
Ibid.
- 4.
Ibid.
- 5.
Analysis of statistics from national offices provided to WIPO here: http://www.wipo.int/ipstats/en/statistics/country_profile/.
- 6.
For example, Japan and Korea are well-known to have instituted laws and regulations that restricted foreign direct investment (FDI) in favor of cultivating domestic industry during their catch-up stages (e.g., Johnson 1982; Kim 1993; Morris-Suzuki 1994; Hobday 1995). In contrast, the US and UK are generally perceived to have been more open to foreign investment in modern times than Japan and South Korea. China has relied much more on FDI for its modern economic development than South Korea and Japan did for their own development (e.g., Lin 2012).
- 7.
The shortcomings of this metric (for example the lack of lag between R&D investment and patenting) should be considered.
- 8.
Perhaps one of the most fundamental economic conceptualizations of “quality” patents could be if they constitute inventions that are actually commercialized. Inventions that are not actually commercialized (which is the case for many low-quality patents), do not constitute innovations and therefore cannot contribute to economic growth (Schumpeter 1942).
- 9.
Patent quality metrics most commonly used include: (i) the lifespan of patents (whereby patents with longer lifespans are generally more valuable given that rational actors will only pay fees needed to maintain patents if they are valuable); (ii) forward citations (whereby more often cited patents are generally thought to be of higher value); (iii) size of patent families (with the logic being that patents filed in more offices internationally are generally of higher value given the costs required to do so, and the larger number of markets to which the patents are relevant); (iv) number of international patent classification (IPC) codes in which the patent is categorized (whereby the wider technological breadth is thought to make a patent more technologically impactful); (v) number of claims, including independent claims only or both independent and dependent claims (whereby a higher number of claims, especially independent claims, can indicate a more sophisticated invention which may indicate it has higher value); (vi) number of applicants (whereby a larger number of co-applicants may indicate higher value patents resulting from collaboration); and (vii) invalidation rates (whereby patents that are invalidated, as one aspect of a patent infringement lawsuit or as part of an invalidation case only, are proven to be of low quality). Yet other metrics (e.g., breadth of patent claims, backward citations in a patent to scientific and other non-patent literature (NPL), among various other measures) are sometimes used.
- 10.
FTO is the ability to utilize a product, process, or service without infringing on patents owned by other entities.
- 11.
It is not fully clear how these figures mesh with other data sources on recent average patent lifespans in China (e.g., the 6 year average for 2015 cited in Table 3.1). Data for Fig. 3.5 inferably refers to both foreign and domestic applications in China while data in Table 3.1 inferably refers only to domestic applications, but clarifications from SIPO are warranted to confirm.
- 12.
See above footnote. Note that the average lifespan for patents in the UK reported to WIPO spiked in 2014 to 10.4 years. Also note, according to WIPO data, the average lifespan of patents in China from 2010–2013 (7.25 years) was actually longer than those in South Korea (6.65 years). However, WIPO data shows the average patent lifespan in South Korea in 2013 was 5.3 years, which is abnormally low compared to other years (and therefore may be a reporting error), thus weighing down its average lifespan.
- 13.
ISRs are the search reports used in the international phase of Patent Cooperation Treaty applications.
- 14.
Other related concepts may sometimes be used, namely ‘foreign-oriented’ or simply ‘foreign’ patent families, which are a subset of patent families with at least one filing office that is different from the one at the applicant’s origin.
- 15.
See China’s statistical profile on the WIPO website, available at http://www.wipo.int/ipstats/en/statistics/country_profile/profile.jsp?code=CN.
- 16.
In 2016, the origins of the top 30 PCT firm filers were: Japan (18), the US (13), Germany (6), China (5), South Korea (3), two each from France and the Netherlands, and one from Sweden (WIPO 2017, p. 19). In 2016, the origins of the top 30 PCT filers from government and public research institutes were: South Korea (8), the US (6), China (4), three each from France and Japan, two from Germany, and one each from Australia, India, Malaysia, the Netherlands, Singapore and Spain (WIPO 2017, p. 20).
- 17.
The state approach of encouraging patent quantity is not always completely counterproductive for growth. The policy of encouraging patent filings was originally meant by the Chinese state to improve awareness about how to file IP and about the strategic benefits of filing IP (Zhu 2013). It was perceived that there was little to lose through this approach because many Chinese firms had low technological capabilities anyway, and therefore were not in a position to file high-quality patents even if the government set up incentives for doing so (Zhu 2013). Further, although not necessarily conducive to innovation, increasing the quantity of patents—even if they are not particularly high quality according to traditional metrics—in latecomer Chinese firms’ portfolios provides them a valuable tool to compete with incumbents who leverage their own portfolios as barriers to entry (Prud’homme 2015, 2016, 2018). Such Chinese-owned patents can be used to block freedom-to-operate, raise licensing revenues, threaten or counter litigation, engage in cross-licensing, and in other strategic ways—especially in industries that are prone to incremental/sequential inventions and patent thickets and in which Chinese firms have at least basic technological capabilities (Prud’homme 2018). As such, at least during the early stages of the catch-up process, the strategy of boosting patent quantity has merit.
- 18.
Latecomer Chinese firms that are currently capable or could soon become perfectly capable of producing a product using a certain process at acceptable levels of quality and efficiency are legally excluded from doing so by patents held by incumbent firms (**ao et al. 2013). And even if the incumbents do license their patents to Chinese latecomers, royalties charged can constrain latecomer profits while being reinvested by the incumbents to maintain their frontier lead (**ao et al. 2013).
- 19.
During the 12th five-year policymaking period, this included the promulgation of over 10 national-level quantitative patent targets and over 150 provincial/municipal quantitative patent targets, mostly to be met by 2015 (Prud’homme 2012). The 12th Five Year Plan on National Social and Economic Development sets the target of 3.3 patents “owned” (note: the Chinese term here “拥有” is best translated as “owned” and is different from the term SIPO uses for “in force” [有效]) per 10,000 people; the National Patent Development Strategy (2011–2020) promulgated on November 11, 2010 prescribes that 2 million patents should be filed annually by 2015.
- 20.
For a listing of such initiatives, see the annex in Prud’homme (2012), pp 172–185.
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Prud’homme, D., Zhang, T. (2019). Chinese Patenting Trends and the Role of the State. In: China’s Intellectual Property Regime for Innovation. Springer, Cham. https://doi.org/10.1007/978-3-030-10404-7_3
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