The purpose of this post is look at the development of the Chinese patent system and how China has made the transition from being a ‘pirate’ nation to a ‘protector’ of patent rights, acquiring a functional modern patent system in three decades. This post also considers whether other countries can learn any lessons from China’s story.
A few days ago the Katpost ‘China patent targets for 2020: what do they say about China and the rest of us?’ described China’s aim of tripling the number of patent applications it files by 2020. Critics of China refer to the fact that most of the patent applications it files are for domestic ‘utility model’ patents which are arguably for relatively trivial inventions. In addition, whilst in recent years Chinese companies are filing many more patent applications abroad there continues to be the general perception that Chinese-originating patent are of low quality. However, it has been argued that what Chinese patents lack in terms of quality can be made up by the huge numbers of filings that are happening.
|Once upon a time the |
spinning wheel was novel
In the recent case Vringo Infrastructure Inc v ZTE (UK) Ltd  EWHC 3924 (Pat) (see Katpost here) the Chinese company ZTE was sued by the US company Vringo for infringement of its patent. It has been noted that in this dispute the Chinese company is the ‘good guy’, being an innovator company, and the US company is the ‘bad guy’, allegedly a patent troll. This is a reversal of roles from the usual perception that China is the ‘bad guy’ when it comes to IP protection.
The Chinese journey
As described by the academic Peter K. Yu, the Chinese opened up to foreign trade in the late 70’s, at the same starting a modernisation drive based on science and technology. The establishment of a modern patent system was seen as an essential part of this. Early versions of the patent system were driven by obligations in International treaties, and had severe limits to the protection that could be attained. Protection was not, for example, available for foodstuffs, medicines and chemicals. Further, while rights could be ‘granted’ to individual inventors, they were in practice ‘held’ by the state enterprises they worked for rendering them largely insignificant.
The 1984 Patent Law is seen as the first step towards the development of the present modern Chinese patent system. This was amended in 1993 and again in 2000 to comply with acceding to the World Trade Organisation (WTO) in December 2001. During this time China’s private sector expanded rapidly in a system in which state-owned enterprises had previously dominated.
In 2008 the patent law was amended again to help develop a knowledge-based economy. This was the first time the Chinese patent system had been changed based entirely on its own needs rather than International obligations. The patent system was improved in many ways including adopting an absolute novelty standard, increasing levels of damages and providing a Bolar exemption.
What is the Chinese patent system like now?
|Chinese Examiners were very relaxed in the old days |
when nothing was patentable
China continues to feature in the US government’s ‘Special 301 Report’ as being on the ‘Watch List’. In this annual report the US looks at the IP systems of its trading partners and identifies issues it is unhappy with. However at the moment Canada, Finland and Greece are also on the ‘Watch List’ and it could be argued the report is written from the perspective of US interests.
What is clear is that China has made the transition from a ‘pirating nation’ to a nation respectful of IP rights, just as the US, Germany, Japan, Singapore and South Korea did in their own time.
Can other less developed nations replicate China’s success?
Academic studies have listed the following characteristics of the way China developed its patent system that could be useful to other countries:
* at each stage the patent system was in line with Chinese local needs and national interests
* it was an incremental process that was done at a pace which reflected China’s technical development
* patent laws had public interest exceptions, such as for public health.
|Treaty obligations are serious matters|