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Friday, 9 January 2015

China's patent targets for 2020: what do they say about China and the rest of us?

The national perspective of patents, technology and innovation has been on the IPKat radar recently. Two weeks ago, this Kat reported on the apparent policy in China to engage in a form of import substitution to support local hi-tech champions, the ultimate goal being perhaps to replace foreign technology with home-grown development. More recently, fellow Kat Annsley discussed the status of patents and measures of innovation, largely from the European perspective. Against this backdrop, an interesting report appeared on various news sites this week regarding the policy decision taken by the Chinese government to treble by the year 2020 the number of patents filed by local Chinese inventors ( see for instance the report on WIPR). The metric cited is that China hopes to encourage local inventors to increase the number of filed patents from four patents filed for each 10,000 persons to 14 inventions per 10,000 persons, this to be accomplished by the year 2020.

Several data points demonstrate the context of this goal. It is reported that, in 2013, more than 825,000 patents were filed at the China State Intellectual Property Office. For that same year, it is reported that 629,612 patents were published in China (according to a Thomson Reuters study of December 2014, this is 200,000 more than the patents published in the US for the same year). On a comparative basis, as reported in the World Intellectual Property Indicators for 2014, 32% of the 2.57 million patents filed globally came from China. The corresponding figures for 2014 have not yet been published, but it is assumed that the figures will be even larger.

The background to this announced policy was stated on a post (January 4th) on the website of the Central People’s Republic as follows:
“Intellectual property is increasingly becoming a vital component of China’s strategic resources and competitive ability.”
Add to this the observation made by the report of this announcement, namely that China views this step as part of its move to become a bigger player in the so-called innovation sectors, this against slower economic growth and ever-increasing costs of manufacture in the country.

However, holes have been picked regarding these Chinese patent-related data. As The Economist argued in a piece on December 13, 2014: (i) Chinese patent filings derive primarily from bureaucratic fiat and bear no necessary connection with the state of innovation in the country; (ii) these patents tend to be of “a lower quality”; (iii) the source of the patents are local Chinese companies rather than the Chinese branch of multinational companies and (iv) only a very small number of corresponding applications (5% of the Chinese-filed applications) are then filed abroad. The Economist concludes with a dismissive observation:
“That suggests that the bureaucrats’ orders are responsible, rather than the emergence of a local ecosystem of innovation as seen in Silicon Valley. Intellectual-property rights do matter, but merely churning out patents does little to advance innovation.”
Indeed, one might observe that this quantitative approach to patents continues a long Chinese tradition of excelling in large-scale projects, such as the Great Wall and Grand Canal, this time in the context of intellectual capital. However, this Kat wonders whether such criticism misses the point, at least in part.

“Sauce for the goose, sauce for the gander”. The Chinese did not create the cottage industry of aggregating patent data at the national level. Those countries which traditionally came on top tended to engage in national chest-beating, while those who lagged felt a sense of national innovative inadequacy. Moreover, setting annual patent filing targets has been a part of many private companies for years, with corporate department and division budgets for the next fiscal year sometimes turning on how whether these targets were met . While there may be something blunderbuss about adopting targets for patent filings at the national level, it can hardly be said that the concept of setting such targets is unknown. Moreover, claims of poor patent quality have been part and parcel of the criticism of the US patent system for a number of years. Enter a new and ambitious kid on the patent block, which can be said to be besting the incumbents at their own numbers game, and all manner of reservations to this very approach of engaging in patent aggregates are raised. A more level playing field seems in order.

Bragging rights. National patent-filing and registration data are potentially a fertile opportunity to mobilize a sense of national pride. What country would not be able to tell its citizenry that it rests at the top of patent activity worldwide? More pointedly, such a message might also have the benefit of keeping the national narrative on technology front and centre, both by encouraging as many as possible to enter the world of technology and innovation and by making it more difficult for bureaucratic forces with other agendas to push back against this policy initiative.

What do we learn from the data on foreign filings? As this Kat has suggested, perhaps we are in the cusp of a more inward-focusing China with respect to technology. If so, the fact that, as of now, relatively few corresponding foreign filings have been made may be consistent with this apparent policy direction. If so, it seems only fair to let this policy play itself out before opining on its wisdom. Even if the suggestion about a more inward-focusing China is off the mark, perhaps the low percentage of foreign filings might signal that only more promising inventions are being pursued abroad. At the least, it seems that what is needed is robust research that compares the decision-making process for filing foreign applications and whether such filings can be linked to “stronger” or “weaker” underlying inventions.

This Kat has always felt a certain unease about aggregates of patent data, as if patents are a unitary phenomenon. But as long as such an approach to understanding the patent world continues, it seems to deserve a more nuanced discussion of the implications of these data.


frankdhtp said...

Perhaps one reason for filing a lot of patents might be defensive - to ensure that prior art which is known in China is properly documented, to prevent patent owners enforcing bad patents or at any rate patents which cannot easily be proved to be bad? I have no idea whether this is the case.

MaxDrei said...

Defensive publication? Of course! Just ask Japan about that. It's been policy there for at least 40 years.

And as for CN's foreign filing programme, bear in mind that hardly any of China's much-vaunted PCT WO publications are carried forward into the national phase. Why should CN bother, when the WO publication alone serves as 54(3) prior art right back to its CN priority date. Even better, under the AIA, it serves even for obviousness attacks in the USA, as if it had been published on its CN prio date.

Anonymous said...

Should not one be concerned with the presumption that such filings are enabled for the purposes of novelty and obviousness?

Clearly, massive filings with no intent to pursue actual patent rights can lead to such abuse and the material filed can just as well be pure science fiction, not fit for denying others actual patent rights.

Anonymous said...

In response to MaxDrei - the WO publication alone does not serve as 54(3) prior art - see Rule 165 EPC:

A Euro-PCT application shall be considered as comprised in the state of the art under Article 54, paragraph 3, if in addition to the conditions laid down in Article 153, paragraph 3 or 4, the filing fee under Rule 159, paragraph 1(c) has been paid.

On a completely different matter, clients in Japan have informed me that machine translations of their national patent applications have been filed in China on the day of the Japanese publication. These "count" in any general assessment of national Chinese filings and that shows that such numbers, without analysis of the actual cases underlying them, are pretty much meaningless.

MaxDrei said...

Presumption? When I look at an A (or WO) publication I don't know whether its applicant will take it through to issue or not. I don't "presume" it is enabling for what it discloses.

Those familiar with drafting for clients who have valuable "know-how" might run the opposite presumption: that defensive publications are of what works whereas those in rspect of more valuable stuff, which are therefore to be run through to issue, are more likely to be reticent about the crown jewels and, instead, effusive with content that appears to be enabling but, in fact, isn't as enabling as it ought to be.

Any comment that starts with "Clearly" has me sceptical of the proposition, straightaway. If you feel impelled to write "clearly" that might be because it isn't clear at all, even to you.

MaxDrei said...

Readers, at 13:27, I erred. Thank you that anon at 14:52.

The only way I can explain my silly mistake was that I was already thinking that, for China, the USA is the most important foreign jurisdiction to keep free for export and that I was already thinking ahead to what I wanted to write about the AIA "54(3)" provision, which (as I understand it) does not require USPTO entry.

But perhaps a US reader can correct me on that point too? I do hope so.

Anonymous said...

I'm not a US reader and not all too familiar with US patent law, but in MPEP § 2151 I find:

"As discussed previously, AIA 35 U.S.C. 102(a)(2) provides that a person is not entitled to a patent if the claimed invention was described in a U.S. patent, a U.S. patent application publication, or an application for patent deemed published under 35 U.S.C. 122(b) (collectively referred to as “U.S. patent documents”), that names another inventor and was effectively filed before the effective filing date of the claimed invention. Under 35 U.S.C. 374, a World Intellectual Property Organization (WIPO) publication of a Patent Cooperation Treaty (PCT) international application that designates the United States is an application for patent deemed published under 35 U.S.C. 122(b) for purposes of AIA 35 U.S.C. 102(a)(2). Thus, under the AIA, WIPO publications of PCT applications that designate the United States are treated as U.S. patent application publications for prior art purposes, regardless of the international filing date, whether they are published in English, or whether the PCT international application enters the national stage in the United States. Accordingly, a WIPO publication of a PCT application (WIPO published application) that designates the United States, a U.S. patent, or a U.S. patent application publication that names another inventor and was effectively filed before the effective filing date of the claimed invention, is prior art under AIA 35 U.S.C. 102(a)(2). Under pre-AIA 35 U.S.C. 102(e), a WIPO published application designating the United States is treated as a U.S. patent application publication only if the PCT application was filed on or after November 29, 2000, and published under PCT Article 21(2) in the English language."

So designating the US suffices. Not even a publication in the English language is required. Surprising!

Anonymous said...


I use the word "clearly" for its established meaning and do not (at all) write wondering how MaxDrei will deign to use the word.

More to the point, the use of the word is one of emphasis. IF you feel "skeptical" because someone else wants to emphasize a point, that is surely your right. But let's not go over the top and project your habits onto everyone else.

The world does fine enough without wanting to use your prescription glasses, thanks.

Ron said...

As a significant proportion of consumer goods sold in the UK has been made in China, filing only in China could well provide Chinese companies with sufficient protection.

When I was in industrial practice, the usual company policy was to only file in countries where manufacture of the patented product took place, as it is far easier to take action against a manufacture that an importer or distributor. Perhaps Chinese companies are adopting the same strategy

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