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This post is co-authored by Jinglin Duan The U.S
One factor, of course, is that economic growth in China has led to the need to “buy-in” to the global IP system, as well as the desire to reinforce the “Made in China / Created in China” philosophy. In October, policy makers named innovation as one of the five key concepts for the development of China for 2016 thru 2020. Tax breaks and other significant incentives have already been introduced to support patent filings by Chinese entities, as well as rewards for patent grants. Of course, other nations also have incentive plans in place, such as reduced filing fees in the U.S., Korea and Singapore, so that is not unique.

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On January 14, 2016, China’s State Intellectual Property Office held a news conference in Beijing and released data that put China once again in the patent spotlight: The number of invention patent applications received by China in 2015 broke the 1 million barrier, reaching 1.102 million and showing an increase of 18.7% over the previous year. This contrasts with the United States, where figures released by the USPTO for 2015 show an increase of 1.8% in utility patents from 578,802 in 2014 to 589,410 in 2015. What is more, 359,000 invention patents were authorized in China in 2015, with 263,000 being granted to domestic applicants, up 100,000 over 2014.

 

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Until now, there appears to have been a two-tiered system of patent awareness in China. The top level has comprised a core group of 100+ entities that have already integrated patents as part of their modus operandi, while a second tier of organizations is rapidly emerging that is becoming increasingly patent savvy. While the second tier appears currently to be motivated by incentives, how long is it likely to be before such companies turn their attention towards reaping the even greater benefits of investing in a highly-directed global patent strategy? A substantial rise in filing abroad, for example, is an obvious advance for a country that has a large, educated and motivated workforce where investment in R&D, as was noted earlier, is the world’s number two. As an example, the share of Chinese applicants at the USPTO accounted for 3% in 2010, but 6% in 2014. What can be expected in 2024?

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Going back to applications, Fig.5 shows the Top 10 offices in 2014, which feature all of the BRIC countries, along with Japan, Korea, the EPO, Germany and Canada. Global patent filings rose in 2014 for the 5th year running, with China being the main contributor. Of the 2.68M applications worldwide in 2014, China led with 928,177, followed by the U.S., with 578,802 and then Japan with 325,989. That’s 1.8M just from the top 3 alone. China led the pack, showing a double-digit growth of 12.5% over the previous year and, in 2014 accounting for more than the next 2 jurisdictions combined, i.e. from the U.S. and Japan put together.


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While it does appear that the Chinese patent office approves a greater proportion of overall applications compared to international counterparts, it is uncertain what this may indicate with regard to patent quality. It is true that we do not have metrics to compare patent quality in different jurisdictions, and we can’t exactly measure how rigorous the examination process is in any country. However, it is a natural progression for quality to continue to increase over time, and inevitable that the sheer numbers going through the system mean that Chinese patents will play an increasingly major role towards significant advances in global innovation as well as representing a growing body of significant prior art.